Thursday, March 24, 2005

Singapore’s foreign relations and its economy 

This is a relatively long post as I have a number of things to share.

First, let me follow up on yesterday’s post on the budget airline dispute with this excerpt from a Channel NewsAsia report:

Indonesia to restrict budget airlines’ access to protect domestic carriers
Indonesia is to impose new restrictions on foreign budget airlines flying to key destinations such as Jakarta and Bali to protect its own operators in the face of fierce competition, reports said on Wednesday. Transport Minister Hatta Rajasa said the new regulations would remain in place until Indonesia had negotiated agreements with other national aviation authorities over the booming low-cost air industry in the region...
With Indonesia’s protectionist measure now officially in place, it may actually become easier for the Civil Aviation Authority of Singapore to defend its decision to withhold AWAIR’s right to fly to Singapore.

But Singapore also faces other disputes with Indonesia.

Singapore Embassy in Jakarta attacked over dumping allegations
The Singapore Embassy in Jakarta was attacked by a group of demonstrators on Tuesday morning. Accusing Singapore of dumping toxic waste in Batam, the demonstrators turned violent, damaging the main gate of the embassy and defacing it with graffiti...
Clement Mesenas, in his article entitled “S’pore-Indon ‘toxic’ issue must be neutralised in Today, points out that this incident may just be “a diversionary tactic to distract Indonesians distraught with rising fuel prices following the removal of subsidies”. This suggests that the friendly relations built up in “Singapore’s generous and forthright response to the plight of tsunami-ravaged Aceh” should help provide a resolution to the dispute.

But Singapore’s relations with Indonesia aren’t the only ones giving it problems at the moment. While Singapore’s alleged military exercise with Taiwan hasn’t quite blown up to serious proportions, there is already another potential irritant:

China blamed for Singapore’s refusal to let in Taiwan seamen
Taiwan yesterday accused Singapore of blocking a port call by two warships to the city-state because of pressure from China... Frank Hsieh, the Taiwanese prime minister, alleged Singapore did not allow the crew of two Taiwanese frigates to go ashore when they docked in the city-state this month because of pressure from China...
If push comes to shove, Prime Minister Lee Hsien Loong has already made clear which side he will back. China is too important to Singapore economically for him to antagonise.

And the economy is something that PM Lee definitely has in mind, as he made clear at the NUS Society Lecture in talking about the casino:

Singapore must reinvent itself to stay attractive and competitive: PM Lee
Prime Minister Lee Hsien Loong said Singapore must reinvent itself to remain attractive and competitive and building a casino is one of the possible ways to do it. But if one is built, the government will ensure there are systematic ways to cope with its social costs...
And in an interview with Bloomberg:

Sure economic gain from casino resort
WITH less than four weeks to go for its decision on whether Singapore is to have a casino, the signs are that the Government is leaning towards a “yes”. In an interview aired yesterday on Bloomberg Television, Prime Minister Lee Hsien Loong said that if Singapore were to have a casino, “there’s not much doubt about the economic benefits to us”...

Mr Lee said: “...It will make Singapore different and it’s one of the things we must do as we continue to make development grow. You have to be prepared to look at a different world, see a landscape which is changing and ask, ‘What do we need to do to keep up with that?’ Staying put is not an option.”

... In the long-term, the “very fierce” competition in the region means that Singapore has to move “very fast and very resolutely” if it wants to avoid being left behind...
That more or less echoes the point I made in “Employment and globalisation”. And to illustrate the problem that Singapore faces, the following story in The Arizona Republic on long-term unemployment is perhaps instructive:

Unemployment plateau: Many jobless for longer
... For the past 29 months, one-fifth of the nation’s jobless people captured in federal statistics have been out of work for more than 27 weeks, which qualifies them as “long-term unemployed.” And unlike previous periods, many of those job seekers have college degrees and solid professional experience...

While there have been periods when the share of long-term unemployed has been higher, it has never remained above 20 percent for so long, economists note. And when the jobless rate shrank, as it has lately, the share of long-term unemployed traditionally shrank along with it. That hasn’t been the case this time around...
There are new dynamics in the world economy; just blaming the unemployed isn’t going to be very helpful.

If it’s any consolation to the unemployed, inflation seems reasonably subdued:

Singapore’s living cost falls, Japanese cities remain the world’s most expensive: EIU survey
Costs of living in Singapore have dropped while the Japanese cities of Tokyo, Osaka and Kobe have preserved their status as the world’s most expensive cities to live in, a survey shows. A bi-annual Economist Intelligence Unit survey of more than 130 cities says Singapore is now at the 19th position, down from 17th in cost of living over the past year...
The following report says the same thing once you read beyond the headline:

Singapore’s CPI up 0.7% in February
Singapore’s consumer price index rose 0.7 percent in February from a month ago, due largely to higher housing cost, the Department of Statistics said on Wednesday. The consumer price index was flat from the same period a year ago...
Of course, counter-intuitive though it may be to some, those who are familiar with economics know that low inflation isn’t necessarily a good sign, as I point out in “High expectations and cost of living”.

As they say: Be careful what you wish for.


S'pore has done its best to be nice and straightforward with these countries.

So why the ble*dy he*l do they keep using us as a scapegoat for their own ble*dy domestic problems!

Ble*dy morons!

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