A 30-member Kuala Lumpur Business Club delegation had a packed 2½-day programme in Singapore last week where they met up with top Singapore political and business leaders from Nov 9 to 11.
Led by KLBC president Datuk Rohana Mahmood and deputy Tengku Zafrul Aziz, the purpose of the visit was for club members to update themselves on what was happening in Singapore.
“We want to update ourselves with what Singapore is doing and also exchange views on current international economics and business matters,” said Rohana. “We timed the visit to coincide with Apec as a show of support for Singapore as host of Apec, and all of our members are also here for the Apec CEO forum.”
The group kicked off its series of meetings by getting a briefing from Goh Yew Lin, the managing director of GK Goh Holdings.
Goh said that Singapore is continuously reinventing itself to stay plugged in to the world as providing “connectivity” for international trade, finance and travel was the essence of the economy.
He added that over the last 10 years or so, business links between Malaysia and Singapore seem to have cooled off. Citing stockbroking as an example, the Malaysian stock market used to be the No 1 market for Singaporeans but today, it ranks fourth after the US, China and Hong Kong.
Even in direct investments, although it was more convenient for Singaporean companies to set up factories in Malaysia, many now prefer going to China. Goh said Iskandar Malaysia in Johor can work for the mutual benefit of Malaysia and Singapore but added this needed time and a better approach for it to happen.
KLBC members next met Finance Minister Tharman Shanmugaratnam who told the group that he believes the global economic recovery will continue for a couple more quarters before tapering off into a period of sluggishness.
This was because the financial system has yet to return to complete normalcy with bank lending still weak and a number of banks in the US and Europe still requiring government support.
Speaking about how Singapore handled the crisis, he said the jobs credit programme whereby the government gives cash to companies to prevent layoffs was one of the best measures taken.
But he cautioned that the huge amounts of liquidity pumped into the economy by governments has started to create “asset inflation” problems and measured steps need to be taken to prevent it from becoming a threat.
The following day, hotelier Ong Beng Seng hosted breakfast at the Hilton where the special adviser for economic development in the Prime Minister’s Office Philip Yeo gave a presentation on Singapore’s plan to become a science and technology powerhouse.
KLBC members were impressed by how Yeo, who describes himself as a “kidnapper of talents”, goes about hunting down young people with strong inclination towards the sciences from around the world. They are given scholarships to study in the best universities and then return to work in Singapore either for the government or for multi-national corporations.
Around 100 to 200 young talents are enrolled into this programme each year.
The KLBC members were hosted to a lunch by Temasak Holdings.
The Dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore Kishore Mahbubani shared his insights on the shift of economic power back to Asia and its consequences on international geo-politics.
He cautioned, however, that while the era of Western domination was coming to an end, it was not the end of Western civilisation or power.
Nonetheless, the shift that is taking place is happening at an unprecedented pace. “During the industrial revolution, standards of living improved 50 times in one lifetime but today, in Asia, standards of living are improving 10,000 times in one lifetime.”
He cited education and the embracing of free market as the drivers of Asia’s amazing economic transformation, citing China’s giant leap from 1978, when Deng Xiao Ping first created free market economic zones, to now as the best example.
Kishore, who had served as a diplomat in Kuala Lumpur, said there was “neurosis” in Malaysia-Singapore relations that needs to go away before economic and political ties can reach their full potential.
“We need to throw our history into the garbage bin and move on,” he said. He also described Malaysia as an economy that has yet to fulfil its immense potential.
DBS Bank Ltd chairman Koh Boon Hwee and CEO Piyush Gupta also met the KLBC members to share their thoughts on the economy and banking system.
Koh said the speed of the recovery had been a major surprise and shows that coordinated and concerted efforts by governments do work.
But he also cautioned that when so much money is made available to all and sundry, it leads to misallocation of capital and there was a risk that governments around the world would be too slow to act to reverse the easy money policy.
On banking, Koh said Chinese banks with their strong capital have global aspirations but added that the likes of Citibank, JP Morgan and the large Japanese banks will remain significant players for a long time.
Top property developer Phillip Ng of the Far East Organisation hosted tea at its new Orchard Scotts development and took everyone through a quick history of Singapore’s property market. He said as the government targets to eventually have a population of 6.5 million to eight million from five million currently, there will be continuous demand for housing.
He said with over 100,000 new immigrants from everywhere each year, Singapore has become a truly international city.
The KLBC members ended their programme on Nov 11 with a courtesy call on Deputy Prime Minister Teo Chee Hean at the Defence Ministry.
Teo said the government has started work on restructuring the economy to take cognizant of global trends, for example, the rising importance of climate change as a business and economic issue.
In restructuring the economy, which will entail the intake of more foreign talents, the government will take steps to ensure Singaporean workers are retrained to skill themselves for employment.
On Malaysia-Singapore ties, Teo said more can be done to enhance cross-border investments and both sides should work at strengthening the broader relationship and not just focus on cooperating on a project-to-project basis.
This article appeared in Corporate page of The Edge Malaysia, Issue 781, Nov 16-22, 2009.