Thursday, October 21, 2021

Cheaply Employed Cheating A***oles

 

I’ve avoided talking about doing business with India and Indians in my blog because it’s a highly emotive topic that can spin out of control. My experiences when dealing with Singapore’s complex communal relations are not the ordinary. If you look at certain segment of Singapore’s cyberspace, you’re bound to get the impression that the Indians from India are a group of devious crooks with fake qualifications, looking to displace Singaporeans and to screw them in the process. This has not been my personal experience with the Indian expat community. This was the community that gave an unknown freelancer with no “big agency” experience chances that would otherwise be unimaginable. It will, forever be stuck in my memory that on the one occasion I, as an individual, was allowed to pitch for a government related job was because of an Indian born member of the board of that particular agency fought for me, while the born, bread and prospered Singaporeans dismissed me as “THAT BLOGGER.”

Never the less, I do work to see it from the side of the guys who have had different experiences with our new migrants from the less developed world. Yes, it cannot be easy to slog for a degree and then get rejected from jobs that you believe to be yours and everyone you meet in the HR department happens to be from a particular community.

So, I avoided getting involved in the discussion on the Comprehensive Economic Cooperation Agreement or “CECA” for those reasons. However, a few days back, I got involved with a discussion with a couple of friends about India and in that discussion, someone mentioned words of the effect of how people enjoying a good life in India was due to the fact that Singapore was providing it. That got me thinking – are we really that unaware of our geopolitical reality?

If you look at the basics, there’s a lot to commend about Singapore. We’re rich, clean and green. Singapore is safe. Unless you’re exceedingly unlucky and end up on the receiving end of a random psychopath, nothing bad is likely to happen to you. Our relatively rapid rise up the prosperity ladder gave Lee Kuan Yew a second career as the world’s consultant on nation building.

While Singapore and to be fair, the late Mr. Lee got many things right, we need to remember that we are still a very small dot on the scale of things and when it comes to the negotiating table, we actually have very few cards to play with. We’ve gotten this far by playing the few cards we’ve had quite well but fact remains – things are not necessarily in our favour.

This becomes clear when you talk about CECA and our relationship with India. Could we have negotiated a better deal? Sure, we could have, as they always are in hindsight. However, we need to look at how we negotiated given our position.

I know many will argue that India and Indians across the social spectrum (from Bank CEO to construction worker) earn “good” money in Singapore, which they probably would not have earnt back in India. It is also true that Singapore is India’s largest foreign direct investor, having invested some US$15 billion from April to December 2020 and accounting for nearly a third of foreign direct inflows into India as is outlined by the following report:

https://www.india-briefing.com/news/india-reports-us81-72-billion-in-fdi-in-fy21-top-trends-22366.html/

While this may be true, one should not get the impression that India would collapse if Singapore were to remove its investments in India and to stop all Indians in Singapore from remitting money back to India. Sure, many people in India would be less comfortable or may even starve to death. However, if you were to look the larger picture, Foreign Investment actually plays a negligible in India’s overall economy (in 2019 FDI inflows made up 1.8 percent of GDP). By comparison, foreign investment is an integral part of Singapore’s overall economy making up 32 percent of total GDP.

While India has been “waking up” to the value of attracting foreign investment, the Indian economy has been driven primarily on its large domestic market. Singapore by contrast has no viable domestic market to speak of and needs inflows of foreign investment to keep going.

As the following diagram shows, our largest source of inward investment remains Western, specifically Europe and the USA.

https://www.singstat.gov.sg/find-data/search-by-theme/trade-and-investment/foreign-direct-investment/visualising-data/foreign-direct-investment-in-singapore-dashboard

 


However, as Donald Trump made very clear, one cannot expect the Western World to guarantee our economic or military security. A small nation like Singapore needs all the friends that it can get.

Then, add to the fact that the newest “geopolitical” bully is China, which has become more “assertive” under President Xi. Given that China is a billion-person market and an increasingly prosperous one, its negotiating position at the geopolitical one is strong (though one can argue that they will make mistakes and overreach).

So, given that our “traditional” friends are unlikely to want to cross swords with China over us in any given hypothetical scenario, we do need to cultivate more friends.

Incidentally, the only nation that has the “mass” to match China is India. Former Australian Prime Minister, Tony Abbot has said as much:

https://www.theaustralian.com.au/commentary/india-the-sensible-substitute-for-belligerent-beijing/news-story/2d7940c990e38bb4c4574c38c2c45e79

 

The rough patch in China-Western relations has been a boon for India. If we were to ever pull out of India, the major players on the global stage would step in. While Narendra Modi may have attended Lee Kuan Yew’s funeral, he was also becoming best friends with then Japanese Prime Minister, Shinzo Abe.

In crudest terms, we actually need India more than India actually needs us. There are undoubtedly massive problems with and within India, which have only been amplified by Covid. The majority of Indians live in dreadful poverty, there are security issues, environmental issues and so on. However, India remains the most viable option to China and, especially in the last two years increasingly a place that businesses have to be in.

So, what exactly can we offer? Like the Virgin Group, our most promising asset is actually our “brand.” I know of an Indian born entrepreneur, who stated that being known as a “Singapore Company” allowed him to charge more than if he was an “Indian” Company.

Singapore may no longer be “cost-competitive” but we do have a reputation for being reliable and for doing good enough work for the international market. This makes us attractive to the world’s brains. If you think about it, it is a good thing that people want to come here.

Ironically, this is probably our only “real” card in negotiations with admittedly less developed but bigger countries like India. We need to show the world that things like rule of law matter. We need to show that we treat entrepreneurs fairly. Singapore may not have many cards to play but we need to continue playing the few that we have well.

1 comment

Renga Subbiah said...

Like Sun Tzu insinuates in his epic work of military strategy- The Art of War, the action of confrontation is not the solution. A unitary act of striking fear deep within the core of the enemy's soul is the foundation to securing victory. The fission created should encircle the target, creating a pressure center that implodes and decimates itself; which is they enemy.

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