Economist.com Cities Guide: Singapore Briefing - May 2006

News this month

A PAP victory

A national election on May 6th brought no surprises. The long-ruling People’s Action Party (PAP) won 82 of parliament’s 84 elected seats—the same outcome as in Singapore’s last poll, in 2001. Still, the election was an important one for the PAP. Not only was it the first national poll since Lee Hsien Loong became prime minister 20 months ago, but it was also the first time since 1988 that the opposition had contested more than half of the seats. Mr Lee could have waited another year or so to call an election, but seemed eager for the PAP to take advantage of the country’s strong economy, which the trade ministry expects to grow by up to 6% this year.

Though a PAP triumph was never in doubt, the party worked hard to ensure that its victory was resounding. In the run-up to the election PAP ministers issued a manifesto with plans for cheaper health care—an answer to one of the opposition’s main complaints—and introduced no fewer than two dozen new candidates. Mr Lee also asked his predecessor, Goh Chok Tong, to help the PAP candidates in Potong Pasir and Hougnang, two rebel strongholds. After the election, opposition leaders argued that while their chance of victory was always slim, the polls showed progress—opposition candidates were treated more seriously than in past elections, and the PAP’s share of the popular vote declined 9% since 2001.

Election hangover

No Singapore election is complete without some residual legal squabbling. Even after the PAP's decisive victory, opposition parties continued to find themselves in trouble. The day after the election, police prevented James Gomez, a defeated Workers’ Party candidate, from leaving the country and took him in for questioning. Officers were determining whether Mr Gomez could be charged with “criminal intimidation” and “providing false information” following a complaint from the Elections Department. At issue was whether Mr Gomez had filed his paperwork before the polls correctly, or even handed it in. During the campaign the PAP had made much of the paperwork mix-up, and Mr Gomez was forced to apologise. On May 12th he was let off with a “stern warning” from authorities.

Meanwhile a lawsuit filed before the election continues to wreak havoc on the tiny Singapore Democratic Party (SDP). PAP grandees sued the executive committee of the SDP for defamation over one of its campaign leaflets, which had allegedly impugned the ruling party's honesty. Most SDP members apologised for the article, with the exception of the party’s leader, Chee Soon Juan (who has already been bankrupted by a PAP lawsuit), and his sister, Chee Siok Chin. The Chees filed their defence in mid-May, taking responsibility for the content of the leaflets.

Taking off

Singapore already has about a quarter of Asia’s market for aircraft repair and maintenance, and it seems to want a good deal more. In May Ko Kheng Hwa, the head of the city state’s Economic Development Board (EDB), announced plans to overhaul the neglected Seletar Airport, which would help make Singapore an aviation hub for years to come. The main airport, Changi, had a record number of passengers in 2005, but Seletar remains a backwater, with precious little activity and few buildings.

The plans are to transform the site into a new 140-hectare “Aerospace Park”, complete with manufacturing facilities, support for private jets and a longer runway for large aircraft, according to a statement from the EDB and JTC Corporation, Singapore’s industrial land developer. Officials estimate that the project could be completed by 2015, create 10,000 jobs and generate as much as S$3.3 billion (about $2.1 billion).

Over a barrel

Despite Singapore’s booming airports, its flagship airline, Singapore Airlines (SIA), is struggling. On May 9th SIA, the world’s second-largest airline by market value, released poor annual results: for the financial year to March, the company’s net profit fell 8.3% to S$1.24 billion. High fuel costs explain most of the loss. Spending on fuel comprised 35% of total outlays in the year to March, compared with 25.2% in the previous year. “Runaway fuel prices may affect aggregate demand for air transport, and indeed economic activity,” said Chew Choon Seng, SIA’s chief executive.

Record fuel prices dragged down what was otherwise a successful year. Full-year revenue was S$13.3 billion, a record level, while passenger numbers edged up 6.6% to almost 17m, also a record. To break even SIA needs to fill 70.8% of its available seats, a target it surpassed at 75.6%, up from 74.1% a year ago. But still, the outlook remains bleak, with the price of jet fuel expected to average above $90 a barrel for the rest of this year. SIA is raising the fuel surcharge tax by about $10 to help cover some of these costs.

To their credit

Singapore got a boost on May 11th when Credit Suisse, an investment bank, announced it would create 900 jobs in the city-state by 2007. The new positions, most of which will be filled by locals, will largely be in information technology and product control. The bank already has 2,200 employees here, so the additional hires will represent a 41% increase in its local payroll.

The announcement was gratifying for Singapore politicians, who have fretted that multinational companies and banks will increasingly put back-office operations in India and other countries less expensive than Singapore. Executives at Credit Suisse said that they chose the city-state in part because of its first-rate infrastructure, an area in which Singapore still enjoys a commanding lead over its competitors.

To China we go

When he was prime minister from 1959 to 1990, Lee Kuan Yew championed close ties with China. Now with the title of minister mentor, Mr Lee continues to promote the relationship: in May he made his 26th visit in three decades. The eight-day trip was hardly an intense diplomatic mission—Mr Lee spent much of it promoting his new book and blandly touting the importance of China—but his visit underscored the strength of the two countries’ relationship.

China was Singapore’s fourth-largest trading partner in 2005, and Singapore’s leaders support Beijing’s stance on Taiwan. Singapore, which also enjoys close ties with the West, is also keen to improve Beijing's standing abroad. “If we can give you a little opening, a window to the West and South-East Asia, we will gladly do so,” Mr Lee said during his trip.

Catch if you can

May 2006

Hua Song Museum

From March 2006

Singapore’s modern history is largely the story of the Chinese who came here to seek their fortune. Three out of four locals are of Chinese ethnicity.

So it is appropriate that Singapore should be the site of a new museum that traces Chinese migration to countries around the world. Named Hua Song, which translates as “in praise of the Chinese”, the museum opened the doors to its eight exhibition halls on March 11th. “It is a museum for people from all over the world to understand the influence of the Chinese diaspora on modern society”, explained Pamelia Lee, the museum’s project director. Hua Song is expected to draw some 100,000 visitors a year.

Hua Song, Haw Par Villa, 262 Pasir Panjang Rd, Singapore 118628. Open: Tues-Sun noon-7pm. Entrance: S$8.40. Visit the museum’s website for more information.

More from the Singapore cultural calendar