Singapore and neigbhours just can’t get along

Wayne Arnold and Thomas Fuller
International Herald Tribune
15 Mar 07

Some countries have strategic oil reserves; others stockpile rice or wheat. The island nation of Singapore has emergency reserves of imported sand.

The sand is there to secure Singapore’s insatiable demand for concrete, a reminder of Singapore’s vulnerability as a nation without a hinterland to supply it with vital resources.

Singapore’s government is now being forced to tap its sand hoard after its usual supplier, Indonesia, abruptly banned exports in February, citing the impact of a recent Singapore construction boom on its beaches and island environments.

The ban touched off the latest in a string of disputes between Singapore and its neighbors over water, land reclamation, satellite concessions, corporate takeovers and the flight patterns of the Singaporean Air Force — just to name a few.

A Malaysian politician has blamed Singapore for worsening floods in his constituency. A top Indonesian politician has appealed for the recall of Singapore’s ambassador.

The general in Thailand who led the coup there last September has accused Singapore of tapping his phones.

Tiffs between Singapore and its neighbors are nothing new, and analysts say the latest dust-ups are unlikely to seriously harm relations.

But the analysts say that the recent quarrels highlight the fissures that continue to thwart the region’s ability to compete collectively against the economies of India and China.

If Singapore and its neighbors cannot agree to share such basic resources as sand and water, they say, the dream of a single market by 2015 — the stated goal of the 10-member countries of the Association of Southeast Asian Nations — may be illusory.

“They’re more competitive with each other than natural allies,” said Robert Broadfoot, managing director of the Political & Economic Risk Consultancy in Hong Kong.

The disputes also raise questions about Singapore’s drive to expand its investments in the region. Singapore’s advances appear to be aggravating what might be described as a personality conflict between what is one of the world’s richest countries and its much larger, but much poorer, neighbors.

“We see Singapore in two ways,” said Drajad Wibowo, a legislator from Indonesia’s National Mandate Party. “On one hand as a role model for development; on the other hand, many see Singapore as an arrogant economic giant, which is prepared to use its financial muscle to undermine neighboring countries.”

Singapore’s problems with its neighbors are as old as the country itself.  Independence in 1965 came about after it was ejected by Malaysia.

Singapore’s leaders took advantage of their city’s historic role as a trading post to lure investment and manufacturing, vaulting Singapore within 20 years to the ranks of the world’s most affluent nations — and breezing past Malaysia, Indonesia and Thailand along the way.

While its shrewdness has prompted frequent comparisons to Switzerland, some say its assertiveness places it closer to Israel. In his memoirs, Singapore’s founding prime minister, Lee Kuan Yew, said his goal “was to leapfrog the region, as the Israelis had done.”

Like Israel, Singapore is an ethnic anomaly, a predominantly Chinese population in a predominantly Malay region. Indeed, Singapore even sought advice from Israel on how to build its defenses after independence. As such, Singapore has become a magnet for ethnic Chinese talent and wealth from around Southeast Asia.

But while Singapore is part of the region, it often seems to be apart from it. In a region where politics are ruled by nuance and consensus, they say, Singapore can be self-servingly rational, legalistic and seemingly tone-deaf to local sensitivities.

“Singapore doesn’t really care about the opinion of its neighbors,” the former Malaysian prime minister Mahathir bin Mohamad said to a Thai television station in January. “Singapore believes the most important thing is what profits Singapore.”

“Their values and their efficiency don’t export well,” said Broadfoot.

Singapore’s officials, for the most part, are not apologetic.

“For Singapore, the rule of law and the protection of property are absolutely important from the days we were established as a trading post for the British East India Company,” said Foreign Minister George Yeo in a written response to questions. “Why else would this piece of rock, amidst thousands scattered in the archipelago, flourish?”

In Singapore’s Parliament, legislators recently complained that Singapore was being picked on unfairly. One member of Parliament blasted efforts by neighbors to make Singapore a “scapegoat for their own domestic troubles.”

But as the disputes accumulate there are also voices in Singapore calling for a change of approach.

A March 12 editorial in Business Times, which like all Singapore newspapers is state controlled, proposed that the government’s investment arm, Temasek, create a charitable foundation.

While that might not eliminate “nationalistic responses” to Temasek’s activities in the region, the editorial read, “giving back rather than merely extracting profits (legitimate though that may be), yields a huge payoff for companies in terms of building good will, respect, networks, and in the end, profitability.”

The rising animosity in Thailand toward Singapore is especially troubling for the city-state because the two countries were Cold War allies with little history of rancor. The mood began to change when Singaporean banks took over Thai banks after the 1997 financial crisis, adding to a general resentment among the Thai elite about selling off distressed assets.

In 2004, when Singapore struck a 15- year deal with the Thai military for use of one of its military bases, activist groups in Thailand said the deal violated the country’s sovereignty.

More recently, Singapore became a national punching bag in Thailand after Temasek led a group of investors in buying the telecommunications empire of Thaksin Shinawatra, the prime minister ousted in the coup last September. The Thai government says the transaction was illegal, an accusation Singapore denies.

As for Indonesia, it remains unclear what brought the new ban on sand exports. However, Indonesia’s maritime affairs minister, Freddy Numberi, later said the ban was aimed at pressuring Singapore into signing a long-stalled extradition treaty.

Many Indonesians suspect that Singapore is harboring white-collar criminals, though there have been no publicized cases of fugitives living here.

Indonesia’s foreign minister denied Freddy’s claim, but Singapore bristled, calling Indonesia’s mixed signals “puzzling and disappointing.”

Singapore says the two countries had already agreed that the extradition treaty would be negotiated, together with a defense cooperation pact. Foreign Minister Yeo told Singapore’s Parliament last week that an agreement was near.

The confusion over Indonesia’s policy is only growing, though. In late February, the Indonesian Navy detained 13 tugs pulling barges full of granite, another widely used construction material, saying they were searching for smuggled sand.

It was into this fracas that the speaker of Indonesia’s Parliament, Agung Laksono, waded when he called for the recall of Singapore’s ambassador.

“I think the government must immediately send the Singaporean ambassador home in protest against that country’s unfriendly attitude,” he was quoted as saying by Indonesia’s state news agency, Antara.

Now, with the price of sand nearly triple what it was before the ban, Singapore is drawing down its sand stockpiles while looking for new suppliers. How long the reserves will last and where sand will be bought, authorities won’t say.

In the meantime, Singapore is standing firm.

“From time to time, we must expect other countries will pressure Singapore in the hope that we will then give way to their demands,” Yeo told Parliament. “Singaporeans know that, if we give in to such pressures, we would only invite more such pressures.”

Wayne Arnold reported from Singapore and Thomas Fuller from Bangkok.

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