Singapore: Monaco of the East!

Cities reinvent and regenerate themselves constantly. At least, cities which thrive and beat the ravages of time to stay relevant are no strangers to change.

Singapore is no exception. During the last ten years, the city explicitly decided to shirk its 'Fine City' image, moving from being a sterile, gum free environment to a hip, happening urban setting. As is often the case, Singapore's policymakers succeeded ... perhaps too well for the city's own good.

The casino, nightlife and incremental lifting of social restrictions worked its magic. From being the fortress 'Gibraltar of the East,' Singapore reinvented itself in the image of Monaco, i.e. the 'Monaco of the East.'

Monaco, of course, is a playground for the world's wealthy. Singapore too has become a playground for the worlds wealthy, particularly China's nouveau riche looking for a 'safer' place to park themselves and their cash. And, the annual haze notwithstanding, breathe fresh air.

Education is a key component of Singapore's drive to retain economic competitiveness in the coming years

To some extent, the 'New Singapore' means accepting larger income gaps between the wealthy and the not so wealthy. According to one widely accepted measure of income inequality, the Gini coefficient, Singapore's income inequality has risen during the last year – even taking into account all government subsidies and other redistribution measures.

However, all is not well in the PAP's (Singapore's ruling People's Action Party) domain.

Singaporeans are pushing back in an unprecedented manner. Locals are unhappy with Chinese immigrants driving Ferraris while subway trains get more crowded; or having to fight with foreigners for places in the local school system.

Nonetheless, there is no turning back for Singapore. The city's 5.3 million people will become 6 or even 6.9 million, maybe not at the PAP's proposed timetable but perhaps sometime within the next decade. (Seats on subway trains will remain a scarcity for commuters, forevermore!)

In the midst of all the changes in Singapore, one change becomes ever more obvious with time: Singapore's price competitiveness is eroding.

According to the latest Mercer cost of living survey, Singapore is the world's fifth most expensive city for expatriates. Hong Kong, Geneva, Zurich and Shanghai are all cheaper cities. The change may not be explicitly policy driven but it is a consequence of multiple factors, including growing Singapore's population by 66 percent in two decades.

To be sure, Singapore has moved beyond the stage of relying simply upon cost to retain economic competitiveness. Nonetheless, can Singapore afford to be the fifth most expensive city in the world and still preserve its 'regional hub' status – or will the Little Red Dot be relegated to being a hub exclusively for knowledge intensive 'Research and Development' areas such as biotechnology?'

Relying on knowledge intensive industries is no bad thing really ... if Singaporeans don't mind the income gap between rich and poor widening further in the coming years.

__________________

Imran is a business and management consultant. Through his work at Deodar Advisors and the Deodar Diagnostic, Imran improves profits of businesses operating in Singapore and the region. He can be reached at imran@deodaradvisors.com. 

Reflections from Pakistan XII: Malala’s Swat Valley

Until a few years ago, Pakistan's Swat Valley was a serene, beautiful region known only to a handful of foreign and Pakistani domestic tourists. All that changed with the gradual infiltration of the valley by Taliban extremists during the 2000s. In fact, by 2006 the Pakistani state had lost control of most of the valley. The Pakistani state was left protecting Buddhist relics in the Swat Museum and a few other isolated pockets of authority, mostly in the form of minor paramilitary bases.

However, with the gradual Taliban takeover of the valley, alarm bells rang in Islamabad. Islamabad, Pakistan's capital, is approximately 250 kilometres and a four hours drive from the Swat's largest town, Mingora. (As the crow flies, the distance between the two cities is approximately 135 kilometers.)

Additionally, Swat is part of Pakistan 'proper,' civil courts, Constitution and all. The Swat Valley is not part of Pakistan's Federally Administered Tribal Areas (FATA). There is no comparison between Swat and South Waziristan.

Pakistani soldiers raise the Pakistan flag at the Baine Baba Ziarat, the highest point in the Swat Valley located at a height of approximately 2,130 meters 

Initially uncertain about how to respond to the Taliban's encroachment on Pakistani territory, the state marshalled its forces and acted in 2009. Taking advantage of an unprecedented act of 'Islamic' justice – the whipping of a teenage girl by extremists in a public square – the government lined up public opinion behind a massive military offensive intended to eject Islamic militants from the Swat Valley.

Following bloody street battles and hand to hand combat, the military emerged victorious and declared victory a few months after Operation Rah-e-Rast began in May 2009. The operation came with a heavy price tag: millions of Swatis became temporarily homeless and street fighting had destroyed much physical infrastructure in the valley.

As Malala's optimism testifies, the war was worth the cost. The Swat Valley is open for tourism again. As a visitor to the Swat Valley myself late last year, I bear witness to the Valley's beauty and also its return to normalcy.

Surely, isolated (and unacceptable) acts of violence still occur across the Valley. However, the Taliban has been driven out. Girl schools are open. Women walk the streets alone – subject to 'pre-Taliban' social constraints imposed by the traditionally conservative Pashtun culture. Swat's residents radiate hope and happiness; more so than most other parts of Pakistan. Electricity shortages mean nothing to Swat's residents, they are happy simply to breathe freely again.

Most importantly, an unambiguous and defiant message has been delivered to the Pakistani Taliban by the Pakistani state and people: there is a line in the sand beyond which Islamist encroachment onto the country's 'mainland' will not be tolerated.

One may find many reasons to criticize the Pakistan army, beginning with General Zia's disastrous 'Islamization' process in the 1980s. However, any visitor (or resident) to the Swat Valley can do nothing but praise the Pakistani military. The army has brought order back to the valley – restoring hope and sanity in the process. If Pakistan has only one success story from its war against the Taliban, the Swat Valley has to be it.

View a small selection of my photos from the Swat Valley here.

__________________

Imran is a business and management consultant. Through his work at Deodar Advisors and the Deodar Diagnostic, Imran improves profits of businesses operating in Singapore and the region. He can be reached at imran@deodaradvisors.com.