That Singapore's economic future lies with South-east Asia, is not in doubt, says Dr Linda Lim, a professor and economist at the University of Michigan, in a piece published in the May edition of Maybank Kim Eng's Asean Inside Out bulletin.
How then, might Singapore prepare itself for such a future? ASEANBUSINESS summarises some of the points and recommendations Dr Lim makes:
1. Recognising South-east Asia's potential
- Economic growth: "South-east Asia will be the second-fastest growing region, after South Asia, with Indonesia becoming the world's fourth-largest economy, and Asean the size of the European Union."
- Consumption growth: "Future Asian and world growth will be driven by strong consumption demand from emerging Asian middle-classes, whom businesses from other world areas will be eager to serve. This means they must engage directly with South-east Asia's diverse populations."
2. Recognising Singapore's limits
Singapore is "geographically centered in the region, globally well-connected with an excellent regulatory environment and infrastructure and has the linguistic and cultural competencies to engage both China and the English-speaking West", but does that equip it to serve as an intermediary for international businesses venturing to South-east Asia? Not necessarily, Dr Lim argues, because:
- Familiarity with business in the highly-developed, well-organised West, and Singapore itself, may not be good preparation for doing business in "messy", less-developed economies
- Businesses from other Asian economies such as China and India may be better equipped to operate in South-east Asia's: they are used to inadequate infrastructure, inefficient bureacracy, unskilled employees, corruption and a lack of transparency
- Being a member of the Asean economic community is Singapore's advantage but a limited one, since progress in regional integration has been slow and benefits are open to all companies in Asean, regardless of nationality.
3. Recognising the business challenge of South-east Asia's extreme ethnic, cultural and linguistic diversity
- "Historically, regional traders, including those of different races based in Singapore, managed to operate across linguistic and cultural barriers, through a combination of quick learning, local partnerships, and alliances."
- Singaporeans once possessed multilingual, multicultural capabilities, and the ability to code switch too, Dr Lim says, but these have faded with the post-colonial advance of English and Mandarin (edging out other languages and dialects).
- Makes sense to develop in Singaporeans the linguistic and cultural competencies of Singapore's neighbourhood, which are also much rarer globally.
4. Promote learning of the Malay language
She quotes Trade and Industry Minister Chan Chun Sing on this: "Businesses from other parts of the world see Singapore as a staging place to the rest of the region. However, we will be of very little value if we do not understand the language and culture in our own backyard. Only by learning the Malay language will we continue to remain relevant to the region and the world at large."
Teaching Malay again in schools would be useful for:
- integrating immigrant communities, particularly from China
- facilitating inter-ethnic communication and relations
- grow the pool of multilingual citizens who can venture out to the region as entrepreneurs or employees of global multinational companies with an Asean business strategy
5. Higher education institutions can ramp up South-east Asian offerings
- More travel-study, exchange and internship programmes within Asean. Such programmes are currently mostly to Western countries - American and British universities and places like Silicon Valley, New York and London, says Dr Lim. "Yet, some of the most exciting tech hotspots for global investors and companies are in our own neighbourhood, like Indonesia and Vietnam."
- More South-east Asia course offerings - from languages to history, politics and culture - which can be done in partnership with local institutions in various countries, as well as Singapore and South-east Asian businesses.
6. Business community can go beyond trade-and-investment missions
"Singapore entrepreneurs in the region - who may not even be registered businesses in Singapore - can form associations with compatriots in different towns in the region, including secondary and provincial towns beyond the major cities." What purpose might these serve? To share information, contacts, advice, and pool scarce resources such as capital and management.
7. Government's role, apart from education
- The government already takes the lead in negotiations for regulatory and infrastructure developments that can facilitate greater connectivity between Singapore and the other regional economies.
- Government-linked companies should also continue to invest in Singapore's neighbours, without crowding out the private sector.
Dr Lim sums up: "Preparing Singapore for our South-east Asian future will require a long-term, whole-of-society effort. This needs to be rooted not only in economic self-interest, but also a genuine interest in and respect for our neighbours' cultures, which will deliver its own benefits in heightened appreciation, understanding and enjoyment of our diverse but common humanity."