Quite frankly I haven't been keeping an eye on Singapore's strategic move to create two super-duper casinos, one in Sentosa Island to be operated by Malaysia's Genting group and, the other one by Sheldon Adelson's Las Vegas Sands.
The casinos were another bold move designed to pull Singapore further away from its dependence on electronics exports and trans-shipping. And, to pull away from countries like Malaysia who are earnestly nipping at Singapore's heel in chasing up the value chain.
But, in the wake of the Wall Street turmoil and the following global credit crunch, Sheldon Adelson's empire which includes the Macau Venetian, is teetering on the financial brink. This is may force Singapore's Tourism Board to keep the ambitious project on track by cash infusion or guarantee the debts of the Marina Sands project.
Singapore will obviously take the long term view. And, the long view is that both casino resort projects will pay off in a massive way for Singapore to widen and diversify its economic base to include that of becoming a truly world-class leisure capital.
In the mean time it has to navigate the choppy waters of economic and financial turmoil with very steady hands and plenty of courage. Read Time for the report.
Even when the strategy is threatened by the externality of the global recession and credit crunch, Singapore is likely to stay the course because the casino resort strategy still makes plenty of sense.
7 comments:
Either ways, Singapore Gov will find ways to deal with the financial crisis. They will surely make it. After all, we can trace back on their history. They have nothing, but they managed to be one of the developed asia country.
True. It's their economic planning team that I'm always fascinated by.
It will be instructive to see what Singapore, and HongKong, will be doing in the next six months.
Both are hubs networked to the global financial octopus, tentacles now shrunk.
In Singapore's case, its ranking has fallen so it must find ways to rebrand itself. The casinos were a first attempt at doing that - to try and liven things up and make it a fun city.
However it faces a dilemma. There's too much overhang from the days of draconian governance for people not to experience the cctv-syndrome around every corner.
Yet at the same time its government has today more than a critical role to play. That's based on the premise if in crisis, government primes, and if in good times, government sits back and private sector primes.
On the other hand, too many have said that Singapore is just government, whether public or private sector.
If that translates to Temasek, it's a big sovereign fund which looks long-term, especially if succeeding in growing its own tentacle in the global financial octopus. If it translates to Singtel and SIA, those are also fundamentals - customers can be of any mien anywhere and they will still need to make calls and travel if they want to improve their own situations. If it's DBS and the other banks, it will be back to the drawing board, perhaps with more investments in new risk management tools, even going back to basics. If it's the biotech industry, that'll be tough because returns are not as promising as what has been seeded, and in these days of tight budgets, people may just buy generic if not do parallel imports. And if it's casinos which means tourism, then that ties in with the other thing -private wealth management- and looking at the success of the F1 as an indication of getting it right the first time, they will probably work, maybe without the initial bang, but with increasing momentum for the reason first advantage goes to those who have first access to the ultrarich club database. In a service economy, brokering is everything, and the only thing a broker needs is information because that's the only thing his seller and buyer don't themselves have.
And it is precisely because one doesn't think the Macau casinos will be govt-funded that one of these two Singapore casinos will be govt-bailed, thereby attaining a first advantage in the prevailing climate of uncertainty. If the rich become fazed by banks, stocks and financially engineered products, they may just park their greed on their roulette tables.
But what about oil and manufacturing? Singapore is a processing place, and oil remains inelastic demand, so it will still make the dough. Manufacturing is the one which bears careful attention. They lost the HDD sector, probably to Malaysia, now to China. Next will be other things, like laptops and printers. It's a hollowing-out caused by MNCs with travelogues in knapsacks. That may even be accelerated by obamania which could fuel insourcing within the US which will partly depend on how the US see economic suasion in the interest of their foreign policies. However the other emerging economies won't be sitting still on that. Meanwhile education and health will remain relevant because when times are bad, people will study more in preparation for the next recovery, and they will also fall sick doing so.
Endpoint? They need to find new things to make, else differentiate using core competencies in place. And these have to be done soon because good people will leave when they have nothing to do. After all the reality of globalization for emerging markets is as much people inside going away as it is goods outside coming in. Some countries don't see this even today, isn't that sad?
Their EDB team would have seen all these years ago. When they made a move for the HK financial experts even before the return of that spadmin region, they were already having in view Singapore as financial hub of SEAsia at the cross-junction of the east-west trade routes. They would have done their own SWOT, and the first question would have been - 'what if the tentacle falls off?' To answer that, they would have asked - 'what have we got that others don't have?' And some of their answers would include these: funds in our banks parked by disgruntled indonesians, brains in our enterprises parked by disgruntled malaysians, methodologies in our databases parked by best-buy MNCs, and so on. Such as one of the most efficient brokering competencies in the world, a competency gilted by cash, cash whose function even wall street had recognized as critical by pointing to Buffett as having in abundance before the fall. In money-tight days, cash will be even bigger than kings. And the singaporeans know that.
So threats have been transformed to opportunities.
Do we do the same over here? Will MOF1 and MOF2 put aside assumptions that Malaysia must be the place where it is alright for some of its citizens to demand that since they cannot adapt to the world, the world must adapt to them, and therefore policies to ensure that is upheld must be applied rigorously?
Do we need an MOF3 to come up and say, "screw it - let's go HK/SG for Penang; free port status completely tomorrow, reduced income tax for businesses, worldclass support for SMEs, one-day business formation benchmarks, education system that's crafted by the best in the world, not the best in the gladiator pits of parochial bigoted political arenas, and every piece of grant we can cobble to put up the right infrastructure to turn that island into the next most fun-filled and modern pearl of the continent across its shores."
You know men are weak when facing a crisis, the first thing they do is close their minds. It's because Singapore keeps its mind open that it can remain agile for so long, pulling one rabbit after another out of its hatch.
Here, it's only polemics. As if people can eat that.
This has been a jsterman@mail.com production
their government have always been far sighted and pragmatic.
surely they have a contingency plan on hand.. and even maybe delay the opening a bit.
but hey.. they are afterall cash rich.. a couple billion of injection to spur the project onwards may not be a problem to them..
ahem.. wonder if they are looking for IT person... :-)
walla
Right on the money again. It really is the difference between setting and revising strategic goals in Singapore versus endless polemicising in Malaysia.
agnos my bro
Go forth and seek that IT job in Singapore and you shall find it. Don't forget to enclose your cv with the job application, though ;)
Hi
I read somewhere that in some perverse twist entertainment industries like these are sometimes boosted in down times as ppl drink or gamble their sorrows away.
Though I still recall from my teen days when I was waitressing in bars in Bangsar of the big spenders, spedning thousands on alcohol during the great boom days just before the crash.
Nowadays though RM1000 aint much for the typical urban clubber as a bottle of champagne costs about RM500.
jed
That's the myth, that sin consumption is recession-proof. Maybe for 4Digit, which is broadbased. But for casinos, they'll be hit. Look at what's happening to Adelson.
As for urban clubbing, I think they can on hope for scions of UMNO, MCA, MIC and BN-types to burn some Ringgit. The rest of us will prefer to have our drinks and cigars over a backyard BBQ.
Post a Comment