The economy: What next?

September 28, 2002
Singapore Democrats

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This website will carry a 7-part series of articles comprising of excerpts from Dr Chee Soon Juans latest book Your Future, My faith, Our Future. Heres Part I.

According to Goh, restructuring would take Singapore out of direct competition with its neighbours by attracting high-skilled industries instead of supplying cheap intensive. According to Lee, however, the competition for investments was still on. If the economy was undergoing restructuring to attract high-skilled industries, presumably because it has to move out of direct competition with its neighbours for cheap labour, why is it still competing with them for investments?

As the economy began to recover from the hammering it took during the Asian economic crisis, it was the manufacturing sectors that led the rebound. Financial services and business services, which traditionally require high-skilled and high-value-added components, hardly made an impact on the economy.

With every economic downturn and subsequent recovery, Singapores dependence upon the external markets to sustain its economic growth has intensified, and with it, the countrys reliance on foreign investment. The truth of the matter is that Singapore cannot, or doesnt know how to, break free of its dependence on foreign investment. Analysts Walden Bello and Stephanie Rosenfeld summed up:

Despite its seeming prosperity, Singapore in 1990 is trapped in the treadmill of the export-oriented economics that it once so enthusiastically embraced. Having so completely opened itself up to the world market and the multinationals with the illusion that it could influence the former and manipulate the later, the PAP technocrats now see that their policies have reduced Singapores economy to a mere service economy, the fate of which is totally dependent on the calculations and whims of the multinationals.

Singapores reliance on MNCs has remained deep. The attempts made by the government to restructure the economy served only to attract a different category of industries to the country and did little to lessen the economys dependence on external investments. Even in 2001, economic analysts still point out that Singapores problems are caused by its heavy dependence on foreign capital, because strong competition for FDI [foreign direct investment] has mounted, with cheaper centres in the region already drawing away investments from Singapore. The convenience of constructing an instant economy fed largely on foreign capital may have served the PAPs interests well. It comes with a price, howevera price that is not insignificant and one that the country is only beginning to pay.

Your Future, My Faith, Our Freedom is sold at Select Books (Tanglin Shopping Center), Kinokuniya Bookstore (Takashimaya Shopping Centre, Orchard Road) and the SDP office (1357A Serangoon Road, Singapore 328240).