Singapore, Again
In a September posting titled Asian Function, this writer noted that the city- island-state of Singapore is the 5th richest country in the world, as measured by GDP per capita. What wasn't mentioned is Singapore's pronounced gap between rich and poor; its Gini co-efficient is just under 0.5, and rising, reflecting the low incomes of the heavy concentration of unskilled foreign workers who underpin the city's growth.
On the flip side of the inequality picture are Singapore's wealthy; Boston Consulting Group reports that the city has the highest percentage of millionaire households in the world. Such affluence, as observed by my daughter, Annie (who has just returned from a three-week business trip) is as palpable as the region's heat and humidity. Luxury-goods shops seem more luxurious than any where else, and busier. Even mid-scale stores, like Abercrombie & Fitch, are exceptional. In the face of harsh consequences, social order and business discipline prevail. At one of the many construction sites in the city, a prominently-displayed sign announced the project's completion date in 2013, not as a season, but to the exact day. And such projections are not frivolous; financial penalties are levied if they are missed.
Annie's attempts to adhere to a vegan diet were useless; pigs' ears, and other "edible" animal parts, however, were always available, and readily purchased by Singapore's well-to-do families who were ever-present in the numerous "food courts". And another observation "from the street" - rice and bread were white, never brown.
Annie also noted a certain "sense of London" - the juxtaposition of still grand British colonial hotels, on the one hand, and banks, from everywhere, on every corner. Singapore is one of the world's principal financial centers for, among other things, offshore wealth, with a reputation, like London a century ago, and Zurich a decade ago, as a tax haven. But, increasingly confronting unmanageable budget deficits and debt, European and American governments have become unwilling to tolerate tax evasion by their citizens. Singapore officials have blinked. Declaring to the world that they are as serious about financial crime as elsewhere, they announced just this month a tightening of directives to their resident banks. This is part of a new international agreement, with Germany, stating that "banking secrecy will not constitute an obstacle to exchanging information". In short, Singapore's bankers are not to resist if German officials request data about German citizens' bank accounts. By implication, other offshore depositors are also affected.
There is, of course, a quid-pro-quo here - Singapore's co-operation is expected to smooth passage of a Free Trade Agreement with the EU. As always, what matters most to Singapore is its international reputation. and enhancing its ease of trade with the world.