Singapore - Island sits in an ocean of economic turbulence

Recommended by an anonymous emailer who I would like to thank for drawing my attention to the article. It is from the Sydney Morning Herald on the April 30, 2007.

Eric Ellis looks for explanations for Singapore's booming property market.

SINGAPORE'S property market is roaring. And why I know that is because the lease on our apartment will soon expire and our landlady wants 70 per cent more rent than she did in 2004.

No matter that the place leaks like a Canberra cabinet and that its 1970s-wired electricity trips at least once a week: these are details too far for our poco-curante proprietrix. But she has noticed that a private banker from Tokyo has signed, sight unseen, for a same-sized unimproved flat downstairs at 150 per cent more than the vacating lessee paid, and she reckons we are getting a bargain for $6000 a month.

It's all very puzzling as there's no textbook rationale to the sudden real estate boom here. The economy's growing at an unremarkable-for-Asia 6 per cent, much the same as it has for years, save the difficult "Asian Contagion" period of the late 1990s. There's no more government pump-priming than usual, none of the official withholding of land to get prices artificially moving that's much loved in Singapore's rival for city-state hothouse, Hong Kong. And though wealthy enough, with just 4.5 million people Singapore is still 2.4 billion consumers short of being "Chindia", Asia's neologism du jour.

From Sotheby's to shares, Singapore has no shortage of places to park cash. But new luxury apartment blocks are sprouting among the frangipani, touting all manner of metropolitan arcadia - infinity pools, gyms, private clubs. They sport funky names such as Trillium and Botanika, fashioned on hoardings in designer fonts usually seen in Wallpaper magazine. My favourite promises that the elysian towers rising behind it will be "Home to 46 of the Most Luminous Families" - which will presumably take care of electricity bills, also on the rise.

The reasons why it's suddenly salad days for Singapore developers seem to reside in neighbouring Indonesia, a country rated by the graft watchdog Transparency International at 130th of the 163 nations it tracks in its annual corruption survey. TI's first place, ie, the world's least corrupt place, is occupied by Finland, Iceland and New Zealand. Australia ranks joint ninth with The Netherlands.

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Thailand to weigh new foreign business ownership rules

By Orathai Sriring (Reuters)

BANGKOK: Thailand's military-appointed legislature will debate this week proposed changes to foreign business ownership rules that are still making foreign firms nervous despite government efforts to soothe their fears.

Business chiefs fear foreign companies will be driven away by the new rules, which emanate from the furor generated by the takeover of Shin Corp., the telecommunications giant founded by the former prime minister, Thaksin Shinawatra, by Temasek, the Singapore government investment firm.

At the least, the changes could stifle foreign investment in the export-dependent economy, business executives said.

"While other Asian countries, with less political and economic worries and larger markets, are opening up the doors for foreign investment, Thailand is doing the opposite," said Paul Strunk, head of the German-Thai Chamber of Commerce.

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Singapore and Thailand Situation Deteriorates

The station was once owned by Thaksin Shinawatra

Thailand TV station taken over

The Thai government has announced that it will take over the country's only main independent TV station, iTV, after it failed to pay unpaid fees.
The station was once owned by ousted PM Thaksin Shinawatra, who sold it to Singapore-based firm Temasek in 2006.

The broadcaster had until Tuesday to pay nearly 100bn baht ($2.9bn) in fines and unpaid fees, after losing a legal battle.

But iTV had already admitted it had no hope of finding the money required.

The station - which has no links with the British broadcasting network of the same name - will be shut down temporarily from Wednesday.

The takeover was widely expected after the government announced last week that it would terminate iTV's licence if it failed to meet Tuesday's payment deadline.

"The iTV station will be shut down from 7 March until there is clarity on legal issues," said Dhipawadee Meksawan, a minister at the prime minister's office.

Shin Corp, which was founded by Mr Thaksin and held a 53% stake in iTV, was bought last year by the Singapore-based firm Temasek.

to comment

Singapore

Spats with neighbours 'not big problems', says Singapore FM

Causing a military coup in Thailand is not a big problem, then what in the name of all that is holy would constitute a 'big problem' in George Yeo's land of 'lah-lah'?

The Nation

SINGAPORE - Singapore's ongoing diplomatic spats with neighbours Thailand and Indonesia "are not big problems" and relations overall remain good, Foreign Minister George Yeo said.

"Our foreign relations are on the whole very good. We have excellent relations with all our major partners, with the US, China, Japan, India, Europe and Australia," Yeo said in a speech to his parliamentary constituency late Friday.

"We have some problems with Thailand and Indonesia but they are not big problems. Generally speaking, our overall relations with Thailand and Indonesia remain good."

Bilateral ties with Thailand were strained when the family of then prime minister Thaksin Shinawatra sold a 49 percent stake in Thai telecom giant Shin Corp to Singapore's state-linked investment firm Temasek Holdings in a tax-free deal in 2006.

The deal angered the Thai public and led to months of street protests which sparked the military coup that overthrew Thaksin in September.

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Agence France-Presse

Singapore

Thailand rally against Singapore increases tensions

I wish that a lot of these reports would refrain from refering to Singapore. The problem that led to the ousting of Thaksin was created by the People's Action Party and Temasek not the people of Singapore. The people of Singapore have no prospect of exercising any rights of protest either in agreement with the People's Alliance for Democracy or against them.


Last Updated 23/02/2007, 22:30:32
Radio Australia, Australia

Around 200 people have rallied against Singapore in northeastern Thailand in a protest outside Bangkok, as tensions continue between the two countries.

The protest was organised by the People's Alliance for Democracy, the pressure group behind last year's street demonstrations, which led to the ousting of premier Thaksin Shinawatra in a September coup.

The demonstrators marched to a military airfield in Udon Thani province, northeast of Bangkok, demanding that the air force review a Thaksin-era pact allowing Singapore's military to use the site.

It's the first anti-Singapore protest outside the capital Bangkok amid mounting tensions between the countries after Mr Thaksin, who has been living in exile since the coup, visited the city-state last month.

Bilateral ties had already been strained when Mr Thaksin's family sold a 49-percent stake in Thai telecom giant Shin Corp - founded by the ex-premier - tax-free to Singapore's state-linked investment firm Temasek in 2006.

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Singapore

THAILAND: Singapore asks for explanation over satellite row

From ABC

Thai's coup leader is involved in a row with Singapore over the sale of Thai satellites to a government-owned Singapore company. Singapore's foreign ministry has asked for a diplomatic explanation from the Thais.
Presenter - Karon Snowdon, Speaker - Robert Broadfoot, managing director, Political and Economic Risk Consultancy

listen via windows media

SNOWDON: The Head of the Thai army, coup leader and political king maker, General Sonthi wants to get Thailand's satellites back.

They're the assets of the Shin Corporation satellite subsidiary.

They were sold off last year to the Singapore government's investment company Temasek as part of a controversial multi-billion dollar sale by the Thaksin family.

General Sonthi says the satellites are national assets and should be returned to Thailand.

Managing Director of Hong Kong based Political and Economic Risk Consultancy, Robert Broadfoot.

BROADFOOT: So that's why it's even more important because the comments are by the military which has put the government in place.
Read the rest of the transcript

Singapore

A relationship built on sand

Below are extracts from an article by Bill Guerin who has managed to take a step back from Singapore's and in particluar Temasek's ongoing financial dealings with its neighbours. The Peoples Action Party has often stated that no opposition party would be capable of running the economy and financial investments as well as they have been doing for the last thirty plus years. The rise to economic dominance in South East Asia was a majestic climb but now that the Peoples Action Party has reached a plateux they seem to be incapable of investing in their neighbours without causing a political stink. So just how great a job have the PAP been doing over the last few years.

JAKARTA - Singapore's aggressive regional investment strategy has already taken bilateral relations with Thailand to an all-time low, but a rising tide of economic nationalism and unresolved extradition issues with neighboring Indonesia potentially represents a more crucial test for the island state's economic diplomacy. [...]

The Peoples Action Party will of course point the finger of blame not at their own party but that of the allegedly independent Temasek in order to defuse allegations that they are somehow mismanaging investments. This seems to be the current line of response in the Thaksin Shin Corp deal, but with the land-reclamation programme and its need for sand imported from Indonesia, such a defence is redundant. I am in no way buying the party line that Temasek is a separate 'business entity', but in this particular case the Peoples Action Party have less of a 'deniabililty' position to fall back on. The land reclamation project is an initiative undertaken and promoted by the Singaporean government. The Indonesian government has banned such sand exports to Singapore as leverage in negotiations over a planned extradition treaty.

Controversy over Singapore's land-reclamation projects, which entail huge imports of foreign sand and soil, represent the latest spat in a historically prickly bilateral relationship - one that is coming under increasing strain that threatens Singapore's Indonesia-based investments. [...]

The two sides have been negotiating the issue [extradition treaty]on and off for more than three decades, although the issue became particularly heated after the 1997-98 Asian financial crisis, when a number of ethnic-Chinese Indonesian businessmen absconded with huge amounts of cash they allegedly illegally deposited in Singaporean bank accounts.

Singapore's drive to be the Switzerland of South East Asia is built on the very premise that the accounts are easy to set up and the money placed in them is done so on a 'no-questions-asked' basis. Of course it attracts money gained through corruption or other questionable means. That's the whole point of running a 'Switzerland' style banking system. The problem for Singapore and the People's Action Party is that in doing it with money in South East Asia which has such a wide and visible lack of social equality it is 'theft'. According to Andy Xie "Actually, Singapore’s success came mainly from being the money laundering center for corrupt Indonesian businessmen and government officials." So until the extradition treaty is drawn up and it includes provisions to include economic crime the situation and antagonism between the two nations will remain.

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Singapore

Thailand's Sondhi Wants Assets Back From Singapore

By Anuchit Nguyen and Beth Jinks

Feb. 16 (Bloomberg) -- Thailand's military leader said he wants to take back control of 140 billion baht ($3.9 billion) of assets sold to Singapore's government, escalating a diplomatic spat between the Southeast Asian nations.

``Singapore is a very small country, but it is so rich that it can buy 140 billion baht of our national assets,'' said Sondhi Boonyarataklin, who led a September coup that toppled the government of Thaksin Shinawatra. ``I am thinking about whether we can take those assets back.''

Singapore's Temasek Holdings Pte last year bought control of Thaksin's mobile phone and satellite group, provoking an outcry against the sale of strategic companies to a foreign government. Sondhi last month accused Singapore of using those assets for spying, a charge the city-state has denied.

``I thought things had calmed down on the subject, but this does suggest that maybe things took a turn for the worse,'' said David Cohen, a Singapore-based economist at Action Economics. ``It is difficult to anticipate which direction the politics in Thailand would go right now.''

The sale of Shin Corp., the holding company founded by Thaksin, angered Thais because the billionaire businessman's family didn't pay tax on the proceeds. The deal exacerbated protests and a political stalemate in Thailand that led to Thaksin's ouster in the Sept. 19 coup.

Business Decision

Many Thais were also concerned at Singapore's involvement in the transaction, even though Temasek and its parent, the Ministry of Finance, said the 33-year old company made the investment as a pure business decision and not at the direction of the city- state's government.

Temasek's Chief Executive Officer, Ho Ching, is the wife of Singapore Prime Minister Lee Hsien Loong.

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Singapore

Thai protestors burn effigy of Singapore's deputy premier

Jan 29, 2007, 9:30 GMT

Bangkok - Hundreds of Thai protestors burned an effigy of Singapore's deputy prime minister outside the Singapore embassy on Monday, after failing to receive an apology from the city-state over a recent diplomatic tiff.

The 200 to 300 protestors, coming from various groups such as Ramkhamhaeng University and Alliance for Northeastern People, burned an effigy of Singapore's deputy premier S Jayakumar to protest his 'private meeting' with Thailand's ousted prime minister Thaksin Shinawatra earlier this month.

'We are here to announce how stupid the Singapore government was to meet with Thaksin,' said Sathorn Sinpru, deputy leader of the Alliance of Northeastern People, believed to be an offshoot of the People's Alliance for Democracy that led the anti-Thaksin protests last year.

The protestors last week had demanded an apology from the Singapore embassy for the Jayakumar meeting but none was forthcoming.

'If Singapore continues to deny us an apology we will take our protest to Udon Thani Airbase in North-east Thailand and chase their air force off the base,' said Sathorn.

Thailand and Singapore have enjoyed close diplomatic and military ties for decades, and bilateral relationship became even closer under former premier Thaksin, a billionaire telecommunications tycoon who was prime minister between 2001 to 2006.

But things have changed since Thaksin was ousted by a military coup on September 19.

His high-profile activities in exile, including his meeting with Jayakumar and his use of Singapore to conduct interviews with CNN and the Wall Street Journal, drew protests from the Thai government.

The Thai foreign ministry has argued that Singapore's stance towards Thaksin was inappropriate given the city-state's close business relations with his family.

A year ago Temasek Holdings, the Singapore government's investment arm, bought his family's 49-per-cent stake in Shin Corp, Thaksin's business empire, for 1.9 billion dollars in a tax-free deal.

Many Thais regarded the purchase as selling off sensitive national assets to a foreign company.

Shin Corp's holdings include Advanced Info Service, Thailand's largest mobile phone service, Shin-Sat, the national satellite network; and ITV television.

The sale sparked both anti-Thaksin and anti-Singapore protests in Bangkok last March and April.


© 2007 dpa - Deutsche Presse-Agentur

Singapore

Singapore Has No Regards For Diplomatic Procedures, Says Ex-Envoy

BANGKOK, Jan 17 (Bernama) -- Singapore has failed to understand a well- known diplomatic procedure where a person considered as "enemy" of another government should not be given official treatment, a former Thai diplomat to Singapore said today.

"Singapore should realise that in international law and diplomacy, such person should not be allowed to carry out activities that can harm a friendly government from its soil," said Asda Jayanama in an interview here.

Given the nature of Singapore's political system, Asda said he doubted that deposed Prime Minister Thaksin Shinawatra's recent visit and his meeting with Deputy Prime Minister S. Jayakumar was purely social and private as claimed by the Singapore Foreign Affairs Ministry.

"I suspect it had something to do with Temasek Holdings' purchase of Shin Corporation. There is a lot of problems in the deal," he added.

The company was sold by Thaksin's family for 73 billion baht in a controversial deal in 2005.

"Although there is no general guidelines on Thaksin's global travel, the Thai government would treat each travel on a case-by-case basis. This is odd as it's widely known that the Thai government was unhappy with his movements and travelling to some countries lately," he added.

The Thai Foreign Ministry announced Tuesday that it was withdrawing an invitation for Singapore Foreign Minister George Yeo to visit Bangkok at the end of the month, as well as suspending the Thailand-Singapore Civil Service Exchange Programme.

Asda said Singapore should learn from other Asean members regarding Thailand's sensitivity over Thaksin who was ousted in a coup on Sept 19, citing the reluctance of the Philippines and Malaysian leaders to fulfil Thaksin's request to meet them after the coup last year.

Besides that, it was also reported that a senior leader of the republic had proposed a provision in the Asean Charter that any government coming out of a coup should not be recognised, said Asda.

But Asda, who served from 1986 to 1990 in the republic as well as to the United Nations from 1996 to 2001, said the Thai Foreign Ministry had also fumbled badly in handling the whole issue as they had prior knowledge of Thaksin's visit to Singapore after being informed by its ambassador to Thailand, Peter Chan.

"The ministry lacks finesse and has not been totally transparent. Upon being informed by the ambassador, the ministry should have asked for his detailed programme, including where he was going, whom he was meeting...his CNN appearance. They should then quickly advice the prime minister but it appeared this did not happen."

In fact, Asda said, the ministry was ignorant of this until Prime Minister Surayud Chulanont expressed his concern.

"It appears that top officials at the ministry still have their hearts and mind with Thaksin and his people. The ministry is not in tune with the government or the Council for National Security (formed by the military after the coup)."

Asda, however, said he still believed the action taken by the ministry was a right move and hoped it could explain other deals in Singapore initiated by Thaksin during his reign.

He said there was a massive development project planned at a premier site belonging to the Thai embassy in Singapore and urged the ministry to inform the public about the project.

With major local newspapers playing up the issue, Asda said there was a possibility of anti-Singapore feeling increasing in the country, with facilities given to the Singapore military to conduct training in Udon Thani and Kanchanaburi probably being the next issue to be raised.

Singapore is one of the major investors in the kingdom and last year, bilateral trade between the two countries totalled nearly US$13 billion (466 billion baht).

-- BERNAMA

Related Article
Temasek to be held accountable for purchase of Shin

Singapore

Thailand revises business rules

By Kate McGeown
BBC News, Bangkok

The Thai government has announced plans to tighten rules regulating foreign businesses - a move analysts say could damage an already shaky economy.
Changes to the Foreign Business Act would see foreign firms being prevented from controlling more than 49% of the voting rights of a Thai business.

But the changes will take two years to implement and key sectors, such as retail and banking, will be exempt.

Foreign investors are already nervous after last month's stock market crash.

'Grave concern'

The downturn was sparked by the government's sudden decision to limit the amount of money that could be withdrawn by investors - a plan it then partially rescinded in an effort to bring market levels back up again.

September's coup and the New Year's Eve bombings have also raised questions about Thailand's stability for investment.

The Joint Foreign Chambers of Commerce in Thailand (JFCCT) said it was "gravely concerned" about the proposed changes to foreign ownership controls.

"Such a radical change of this law will lead to a further erosion of business confidence," said its president Peter van Haren.

Thai stocks fell nearly 3% after the proposals were published.

Different regulations currently apply to different industries but while many businesses already have a 49% ceiling on foreign ownership, in practice foreigners often have overriding control, because the local subsidiary owners are merely nominees with little or no voting rights.

By tightening up laws to consider voting rights as one of the key criteria for foreign ownership, many firms may be forced to alter shareholding structures and sell shares to Thai investors to stay within the law.

Exemptions

Officials said about 15 publicly listed companies would be affected by the proposals, which have still to be approved by Parliament.

But according to the draft proposals, industries such as retail, tourism, banking and insurance - in which foreign firms have substantial interests - would not be affected as they are governed by other laws.

This would exclude firms such as Tesco and Carrefour from any impact.

One analyst said that his initial impression was that the changes would not be as punitive for foreign investors as first thought.

"First indications are that the revision is somewhat less stringent than initially expected," said HSBC's Frederic Neumann.

"The amendment brings the Thai direct investment regime broadly into line with international practice."

Foreign control over Thai businesses has been highlighted by the continuing investigations into the financial dealings of former Prime Minister Thaksin Shinawatra, who was ousted in a coup in September.

Investigators are focusing on the Thaksin family's sale of its controlling stake in the telecommunications giant Shin Corp last year.

The shares were bought by the Singapore-owned investment firm Temasek - effectively selling the company abroad, albeit partly through Thai subsidiaries.

The sale fuelled allegations that Mr Thaksin had abused his power and betrayed national interests.

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/1/hi/business/6243663.stm

Published: 2007/01/09 14:14:01 GMT

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