Singapore lives happily ever after

SINGAPORE:Singapore, like Ireland, suffered the effects of the economic downturn. But unlike Ireland, it has managed to bounce back. So how did it manage to turn its economy around, asks CLIFFORD COONAN

SINGAPORE’S ECONOMIC expansion shows signs of slowing in the second half of this year, but it is still expected to be the fastest growing economy in the world in 2010, with an astonishing 15 per cent GDP growth. These are the kind of figures European countries, including Ireland, can only dream of.

The economy of Singapore expanded by nearly 18 per cent in the first half of the year and the trade ministry has maintained its forecast for gross domestic product (GDP) to grow between 13 and 15 per cent for the full year of 2010. Only Qatar is forecasted to grow faster.

“The global economy is expected to remain on a modest recovery path, albeit one that will continue to ease for the rest of the year… although growth rates will remain healthy,” the ministry of trade and industry (MTI) said in a statement.

But perhaps we should say understatement. After all, Singapore’s small and open economy shrank 1.3 per cent in 2009 due to the global economic downturn, but it has bounced back in a way that is impossible to imagine in Ireland.

There are many similarites between the two countries. Singapore has a population of nearly five million, just slightly ahead of Ireland’s 4.5 million. Both countries have youthful populations and are equally focused on foreign investment and trade. Both also share an interest in high value-added industries like pharmaceutical or IT. So where does Singapore get it right and Ireland fall short?

Well, for starters, Singapore is not burdened with excessive government debt, or banks teetering on the brink of ruin and it is surrounded by poor countries rather than the rich, established economies with which Ireland has to compete with.

But what Singapore has always done is think long-term and follow through with its plans. At the moment the island wants to increase its population by around one million – mostly from India and China – and it is going about this is in a concerted and sustainable way.

“One thing we can learn from Singapore is to look at things that we previously looked at as costs, and turn them into opportunities,” said Michael Collins, director of the Collins Kumarasinghe Associates consultancy and president of the European Chamber of Commerce in Singapore.

He cites the way that issues which are seen as almost negatives in Ireland – such as the health sector and the education sector – have become major selling points for Singapore.

“Look at the ports. Are they cost centres? The Singaporeans manage ports worldwide. Singapore takes cost centres, runs them well, then does the same thing overseas. It’s boring, but they make stacks of money. And the money is not boring,” said Collins, who comes from Kildorrery in county Cork.

The Singaporeans are brave when it comes to funding big-picture schemes to transform the economy. Earlier this year saw the opening to the public of Resorts World Sentosa, Singapore’s freshly minted casino/leisure complex.

The €3.25 billion Resorts World Sentosa is part of a gamble by the Singapore government to transform itself into a hot tourist destination and reduce the economy’s reliance on manufacturing. These is also has a Universal Studios theme park.

Other innovative ways of luring tourists include hosting the Formula One night race, which will take place in September for the third year in Singapore.

Last year, Singapore’s Media Development Authority (MDA) launched the International Film Fund (IFF) at the Cannes film festival, which illustrates the city-state’s ambitions to boost filmmaking.

The Singapore government is also pushing co-productions in live action and animation and has worked to build a major production and post-production hub, serving one of the most heavily populated and rapidly expanding regions in the world.

Christopher Chia, MDA’s chief executive, said that he was in contact with Irish content providers and emphasised the way closer collaboration was emerging as a theme when discussing the relationship between Singapore and Ireland.

“We can genuinely learn from each other,” he said.

Singapore has also set itself some ambitious targets. The country is attempting to at least double its productivity growth to between two and three per cent annually over the next 10 years. It has raised levies on foreign workers to reduce firms becoming reliant on cheap imported labour.

The Irish working in Singapore – there is a community of over 2,000 Irish – tend to be bullish on the island’s prospects. “The exceptional growth in the first half is a combination of factors,” said MacDonald, who is chief executive of the Finegrain property fund.

“From an Irish Chamber point of view, we are seeing continued growth in services. Singapore has seen heavy investment in pharmaceuticals in the last few years and investment in tourism, and the revenues have been beyond expectation,” he said.

Singapore is Ireland’s fifth largest non-EU trading partner and the volume of trade is around €1.5 billion per annum. Links between the countries are getting even closer now that Eircom is owned by Singapore Technologies Telemedia, a subsidiary of Singapore’s sovereign wealth fund Temasek.

The closer links between the two countries was underlined by the foundation of the Irish Chamber of Commerce earlier this year. The organisation’s president, Colin MacDonald, expects to see more collaboration between the two countries in the coming months.