Economist.com Cities Guide: Singapore Briefing - June 2005

News this month

Getting tough

Singaporean authorities have charged five executives from China Aviation Oil (CAO), China’s leading supplier of jet fuel, with insider trading and other crimes. This follows the financial scandal of 2004—the biggest in the city-state since the collapse of Barings Bank in the mid-1990s—when the locally listed Chinese company admitted to losing millions of dollars in ill-placed derivatives bets.

Chen Jiulin, CAO’s suspended chief executive, was charged on June 9th with 15 counts of forgery, insider trading and failure to disclose losses. Four other executives were also charged, including Peter Lim, the firm’s finance director. The charges followed the release on June 3rd of a scathing report by PricewaterhouseCoopers on CAO’s implosion, which found failure at every level, but concluded that Mr Chen should bear the responsibility. The day before Mr Chen and the others were charged, CAO’s creditors voted to accept an offer to recover 54% of the company’s $550m debts. The deal, which must now be approved by CAO shareholders, could allow for new investment in the group.

Slowing down

Further evidence emerged this month of a slowdown in the growth of Singapore’s trade-driven economy. On June 3rd the central bank, the Monetary Authority of Singapore (MAS), said its latest survey revealed that private-sector analysts had reduced their forecasts for GDP growth by half a percentage point to 3.8%. The revised consensus—which tallied responses from 20 analysts, mostly at global investment banks—contrasts with a survey last December, when forecasters were predicting an expansion of 4.3%. The MAS said the main reasons for the subdued outlook were high oil prices, waning demand for information technology, and an expected drop in American growth rates.

Down, but not out

In recent years, Singapore has been at the forefront of official efforts in South-East Asia to counter extremist Islamic groups, especially Jemaah Islamiah (JI), a movement linked to al-Qaeda, which has been blamed for the Bali bombings of 2002 and other Indonesian attacks. However, this month the prime minister, Lee Hsien Loong, warned that although these efforts had weakened JI, the group remained dangerous.

Addressing the fourth annual Asia Security Conference (also known as the Shangri-La Dialogue), an annual gathering of defence ministers, security experts and military officials, on June 3rd, he said, “The JI is morphing into a loose web of dispersed individuals and small groups, highly resistant to penetration and detection.” He compared the group to a hydra, whose many heads make it difficult to kill, and warned that it was especially active in Indonesia, the world’s most populous Muslim state. Mr Lee concentrated on the threat terrorism poses to the Malacca Straits, which ships use to carry 30% of the world’s trade and 50% of the world’s oil every year. A disruption would have far-reaching economic consequences.

I spy...

A correspondent for the Straits Times, Singapore’s main English-language newspaper, has been accused by Chinese authorities of espionage on the mainland. Ching Cheong, the paper’s chief China correspondent (based in Hong Kong), has been under arrest since April 22nd. On May 31st Beijing said Mr Ching, who is a permanent resident of Singapore with a British National (Overseas) passport, was a spy—but did not say for whom he allegedly was working. Singapore authorities denied that the journalist was on their payroll, stating that his arrest was “not related” to the city-state's government.

The controversy may be over Mr Ching's access to confidential speeches by China’s leaders, secured through contacts at the Chinese Academy of Social Sciences in Beijing. It may also be because of his efforts to acquire the manuscript of a book about Zhao Ziyang, the late, former Communist Party chief, who opposed the 1989 crackdown in Tiananmen Square. Straits Times lawyers are seeking access to the journalist.

Not so gay

Though Singapore's ministers clamour for more tourists, it seems that this may not extend to gay visitors. Police have banned one of the region’s largest gay gatherings, the annual August beach party called “The Nation”, due in Singapore for a fifth year. A police statement explained that the event was expected to be a big gay party, which is “contrary to public interest”.

The decision to end this annual tradition comes three months after Balaji Sadasivan, the junior health minister, argued that such events could generate a rise in local HIV-infection rates. Stuart Koe, the organiser of The Nation, accused the government of discriminating against gays. The festival will now take place in Phuket, the Thai resort island.

Catch if you can

July 2005

Singapore Food Festival

July 1st-31st 2005

Singaporeans love their food, which draws its inspiration from the country’s Chinese, Malay and Indian communities. The annual Singapore Food Festival that takes place in July is a gut-busting series of events, now in its 12th year. Among the highlights is a weekend offering for vegetarians at Parco Bugis, a downtown mall (July 22nd-24th). Sanjeev Kapoor, a local television celebrity chef, will offer Indian dishes, while Häagen-Dazs, an international ice-cream chain, will pitch in with a few specially prepared desserts.

For more details, visit the festival's website or phone +65 6780 4681.

More from the Singapore cultural calendar