Singapore’s Turn to Middle East
Having read RSIS Commentary on Singapore’s economic relations with Mideast countries, there is something fundamental missed in the article. To read Singapore’s foreign policy in terms of politics or economics is relatively not complicated. The underlying ideology of any Singapore policy is basically pragmatism as long propagated by its sole founding father Lee Kuan Yew.
Singapore’s pragmatism in international relations would be very closely identified as realism and neoliberalism: what matters most is Singapore’s relative gain in terms of security and power and her absolute gain of prosperity for her own constituencies. Strategically speaking, Singapore would be threatened by Malaysia and to some extent Indonesia given the stark differences of its social base which might turn any time into conflict – low or high intensity.
Furthermore, in neoliberal terms, Singapore would be hard-pressed by the rapid rising of China and India. In fact, its effect is felt down here in Singapore now. Her bulk of middle-class citizens with skilled labors have been experiencing stagnant wages because having to compete with the latter counterparts in terms of the same skilled labors. Worse, the lower-income citizens have been more depressed by the globalization of China and India that they are becoming poorer now.
It is too low to say that Singapore’s turn to Middle East is just because the latter is now socially, economically led by Western-educated people who know how to make better policy and decisions as implicitly assumed by the commentary writer, Yang Razali Kassim. It seems that he or she discounts the fundamental principle of Singapore’s foreign policy making: Pragmatism.
Changing foreign policy focus starting from 2004 means having evaluated critical impacts of international strategic events. The main cause would be the unexpected 911 tragedy and its consequences by the US – Singapore’s first and foremost trading partner – having launched uncertain retaliation in Iraq, Afghanistan, and perhaps Iran. Being dependent on the US for Singapore’s achieving of absolute gain of economic prosperity would be a failure.
Given that Singapore now has also accumulated almost the world’s biggest sovereign wealth fund (SWF) (a scheme like Indonesia’s reforestation fund under Suharto) on the basis of her citizen’s pension monies called CPF, Singapore has become less dependent on the US. Singapore is now even empowering itself to be one of Asia’s leading investor countries together with China and oil-funded petrodollar Mideast countries.
Take a look at this: Singapore has used her SWF to save Merryl Linch, Citigroup, Swiss UBS, and some other big corporations. If Singapore did not do this, then these huge market would be dominated only by the petrodollar countries which are now rising to seize the US’ declining economy. Singapore will engage more Mideast countries for investment cooperation to substitute the US as well as play as, not any longer a dependent country but a driving country to direct globalization.
One more important thing is that Singapore has been relatively “smart” in selecting the partner countries. Once grown with volatility because of the racial tension which led to political instability four decades ago, Singapore has been now stable due to her single-party “democracy”. Lee Kuan Yew’s reluctance for democracy, something a little bit different with his son PM Lee Hsien Loong who is more open in his approach, seems to have also underlined the way Singapore selecting similar partner countries with more or less same “democracies”. From Singapore’s perspective, it is safer because it will then minimize the risk of public questioning of foreign investment in the same “democracies”.
People in Arab petrodollar countries would never question foreign investments. Same thing investing in Myanmar, and China. Singapore has been facing tough challenges when investing in some democracies as what recently happened in Thailand (Shin Corps) and Indonesia (Temasek-Indosat) and I think also some case in the Philippines.
But anyway, China and India might rise and rise stronger. Singapore is making sure that it is riding on the wave of the rise, not being left behind like its neighboring country – Indonesia. Sad indeed for Indonesia.