NEW YORK: Singapore, whose impressive growth rates have caught the attention of the global industry, is vying with other Asean member countries to garner a larger slice of the global pie.
Singaporean officials and diplomats based in the US are seeing a surge in the number of enquiries received from the US industry. The striking feature is many of the investment enquiries are not confined to the services sector.
The island city has not only emerged as one of the world’s attractive investment destination for financial services but also for manufacturing and what is described as manufacturing-related services. Investment experts at the US Department of Commerce, tracking the flow of foreign direct investments, pointed out that Singapore achieved record high investment commitments last year.
“We believe that this trend will also continue in 2011,” says James Galloway, a Wall Street analyst who monitors inbound and outbound US investments. Indeed, Singapore could pose a challenge to Malaysia as far as the flow of US investments is concerned.
Singapore is also penetrating the so-called ethnic investment sourcing, particularly from the heavily Indian-dominated business community in the US with its ever-growing strong political and economic clout. Indeed, the Silicon Valley is almost entirely dominated by Indian entrepreneurs who have achieved major breakthroughs that have catapulted Indians to the forefront of America’s corporate world.
These Indian-owned companies, flushed with cash, are also looking for investment opportunities in other regions, with Singapore becoming a key destination in the Asean region.
Members of the US-Asean Business Council in Washington, which promotes business and trade between the US and Asean member countries, have been bullish in their comments about the economic projections of Singapore which, according to tentative figures show, has recorded 14.7 per cent growth last year.
Notably, the double-digit growth seems very impressive but one ought not to forget that the economy contracted in recession-plagued 2009.
Nonetheless, the perception within the US industry is that Singapore’s economy is firmly entrenched in the growth trajectory.
This bullish perception is also reflected in the assessment of Singapore’s Economic Development Board (EDB) which maintains that international companies invested some S$12.9 billion (S$1=RM2.38) in fixed assets in the form of facilities and equipment in 2010.
Indeed, this flow even surpassed EDB’s fixed asset investment forecast of between S$10 billion and S$12 billion last year.
The projects covered by this investment volume are expected to generate some 21,300 new skilled jobs.
Many investment experts say Singapore does not shy from what is called ‘piggy back riding’ on China and India, positioning its strategic location between the two giants as a ‘gate opener’ to these two markets that are on every American industrialist’s lips.
Recent comments by EDB’s chairman Yeo Yip that Singapore considered itself as “offering value to global companies that are expanding in Asia” confirms the perception that Singapore is selling itself as a facilitator for business with China and India. Singapore is also providing, going by Yip’s words, value to Asian companies that are entering the world markets and, as he put it, “going global”.
Kishore Mahbubani, a former Singaporean two-term permanent representative to the United Nations (UN), told journalists, on the eve of the ongoing World Economic Forum (WEF) in Davos, Switzerland, that “many Asians don’t believe in the rise of Asia. Many don’t believe this (Asia’s rise) is real”. However, he says that Singapore, his native country, is “massively investing in R&D (research and development) and so many of the world’s leading companies are now investing in Singapore”.
This could serve as an eye opener for Malaysia which, if interested in beefing up its foreign direct nvestment (FDI) profile, could do well to increase its R&D allocations. Projects like the Kulim Industrial Park and Penang – the ‘hi-tech island’ as it is called – provide the architecture for attracting FDIs, but the question is how much official funds are being pumped into R&D which, for many Malaysian officials assume, should be left entirely to the private sector. This is not a helpful notion because individual players in the private sector, who have their own narrow agenda, would be encouraged to follow suit with an official nudge in that direction. – BERNAMA