The Lectern


Steve Kelman

Lectern

By Steve Kelman

View all blogs

Singapore observations

Some impressions I formed during my visit to Singapore:

1) Like many big cities in Asian countries that are getting richer, Singapore hosts an enormous shopping mall scene. On a warm Thursday evening, the number of people, mostly young people, ambling along Orchard Road, the city’s main upscale shopping street, rivaled the number one might see on Fifth Avenue in Manhattan on a typical weekend afternoon. And on weekend afternoons, the crowds inside the malls resembe those in suburban American mall on the day after Christmas. 

Does this translate into a retail sales explosion in Singapore? A business journalist here told me it does not. Many Singaporeans come to the malls for the free air conditioning, to window shop and to meet friends at the ever-crowded upscale food courts in these malls, which compared with their US counterparts have a larger number of quasi-destination locations. (Several malls have outlets of Taiwan’s dumpling emporium Din Tin Fung, which boasts a Michelin star!). These malls also feature gigantic branches of the world’s major luxury brands, such as Louis Vuitton (Asia’s favorite – on Orchard Road there are two Louis Vuitton shops within a quarter-mile of each other, and there is another stupendously sized one in the mall next to the Sands casino downtown). Other popular brands include Cartier, Chanel, and Prada. These shops, often two stories high, front with big picture windows onto the street from major Orchard Road malls such as Ion.  The luxury trade is still European-dominated;  US-based Tiffany’s has not been very successful in Asia outside of Japan, and at the Ion Mall their outlet is, as these things go, modest in size and has no street frontage.

2) Efficiency and predictability are Singaporean bywords. I have never needed to walk as a short distance from my gate to the passport control counter as in the airport here. Airport management carefully tracks the time between a plane’s arrival and the arrival of baggage in baggage claim. The mere breakdown of an escalator somewhere in the city’s subway system prompted a long news story in The Straits Times. The flip side of high efficiency, however, can be low adaptability. Two foreigners, one a very long-time resident and the other a relative newcomer to the island, independently mentioned to me that Singapore restaurants are very poor at adapting menu items to special requests (“hold the onions”), and wait staff often almost seem to freeze up when such requests are made.

3) Cabinet ministers and senior civil servants in Singapore are also paid far more than in any country in the world –- at the highest level, it can be as much as a million dollars a year, including performance bonuses. This was originally introduced as part of the government’s successful effort starting when the country became independent in the 1960’s to uproot a deeply ingrained culture of corruption, and partly on the philosophy that if the government didn’t pay top officials competitively with the private sector, it wouldn’t get the best people into government. There have been periodic public backlashes against these high salaries. There was a stir when a senior civil servant wrote a newspaper article about attending a Cordon Bleu cooking course in Paris, at a cost of tens of thousands of dollars, in the middle of the 2008 economic crisis, and more recently this question appeared again in the context of last May’s election, where the government’s share of the vote went down to 60% (Singapore’s political system will remain a topic for another day).It looks like top salaries will be lowered, though perhaps only for ministers and not the senior-most civil servants.

Posted on Mar 23, 2012 at 7:27 PM3 comments


Asian Grammy coming soon?

Singapore’s major newspaper, The Straits Times, ran a long story a few days ago called “Quincy Jones Looks East,” about plans to create an Asian pop music Grammy Award. (By the way, the worldwide newspaper crisis somehow doesn’t seem to have hit Singapore. The Straits Times is chock full of ads, mostly for retail outlets, travel, real estate, and some consumer branded products, bringing back memories of a thick US paper from 30 years ago.)

In a combination that is incredibly Singapore-like in its mixture of a strong government with lots of commercial participation, the government’s Media Development Authority and Economic Development Board, along with funding from a large Singapore-based event management company, have supported creation of a Singapore-based Asia Academy of Music Arts and Sciences. The Academy has named Quincy Jones, now 79 years old and himself the winner of 27 Grammies, as board chairman. One of the first activities of the Academy, scheduled for next year, is an annual music awards ceremony intended as a pan-Asian Grammy, to be called the Come Together Awards Show.

Jones has never visited Singapore, but he is quoted in the article as standing in awe of the country’s efficiency: “If there is anybody in the world that understands organization, it’s Singapore, man. I’m so impressed with the organization skills there.” The article also reports that Jones – who apparently also was an “artistic advisor” to the 2008 Beijing Olympics – is learning Chinese.

The idea of an Asian Grammy award says a lot about the rise of Asia. On the one hand, it shows a confidence about Asia’s prominence and status. On the other hand, it stands in the shadows of the US. They’ve chosen a prominent American as board chair, seemingly to give the exercise legitimacy. Beyond that, the dominant Asian pop sounds from Korea, mainland China, and Taiwan sound pretty much exactly like really soft and sugary US pop, only in a foreign language.

Don’t get me wrong – I actually really like the sound of a lot of Mandopop, pop songs in Chinese. Here are YouTube links to two of my favorites: Taiwanese Teresa Teng’s Yueliang daibiao wo de xin (The Moon Represents My Heart) – which a certain generation of mainland Chinese got to hear in the 80’s as China was opening up to the outside world -- and Singaporean Stephanie Sun’s Yu jian (Meet). The songs are very soft and emotional. I like them a lot, but then again a lot of my family and friends think I have atrocious taste in music. Asian pop artists, including those in the K-pop (Korean pop) genre, which is very popular throughout the continent, tend to be androgynous and cute, with a sort of Hello Kitty feel. (I should add there is also Asian rap and hip-hop.) Whatever else Asian pop is, it is not original or innovative music.

From the West’s perspective, the content of Asian pop and talk of an Asian Grammy award, the good news is that imitation is the sincerest form of flattery.

Posted on Mar 20, 2012 at 7:27 PM3 comments


Understanding wealth management in Singapore

I am spending a few weeks in Singapore as a visiting professor at the Lee Kuan Yew School of Public Policy at the National University of Singapore. Singapore, a city-state with a population of 5 million (about one million of whom are temporary guest workers in construction, domestic help, and other unskilled occupations), now has one of the highest standards of living in the world.

Like China, it is filled with new high rises. But compared to China, the architecture is generally more graceful, the city planning much less chaotic, and – last but not least -- the air much cleaner. With its humid and often rainy year-round tropical climate -- the country is close to the equator -- the city is filled with greenery and blessed with a newly developed waterfront and harborside walking area, dominated by a brand-new Sands casino and adjacent art museum, both architecturally spectacular. (A former student from Singapore complained to me about living in a city whose signature building was a casino.)

The old areas of the city -- Chinatown, Arab Street (where Malays traditionally lived), and India Town -- each represent one of the traditional ethnic groups making up Singapore's population, and in fact were set up as ethnic conclaves by Singapore's founder, Sir Thomas Stamford Raffles. They have been spruced up and painted bright colors so they currently look considerably better than they probably did when first built, somewhat touristy and Disneyesque but nonetheless fun to walk around.

Shortly after arriving, I had a Sunday lunch with another former student who had lived in Hong Kong for several years after graduating, and who recently came to Singapore to work in “wealth management,” first for one and now for another bank. The clients are wealthy people in mainland China and Taiwan. (OK, this is not exactly public service – maybe he’ll return to public service later.) I learned a lot about this world when I asked him the simple question: “Why would a client choose to send his money to Singapore to be managed?”

Part of his answer to my question was relatively straightforward and didn’t surprise me: Singapore has strong rule of law and contract protections, so a wealthy person could be quite sure that his money wouldn’t suddenly be confiscated by an arbitrary government or a corrupt official, as can occur in many places. (I blogged about this regarding Russia last summer.)

But then he added that people brought their wealth to park in Singapore because Singapore had no capital gains tax, no inheritance tax, and low income taxes. My initial reaction was to wonder how that would help, because they would need to pay taxes on the earnings from their wealth in their home country, unless of course they cheated. Then he told me something I should have known but actually didn't -- the U.S., it turns out, is one of the very few countries in the world that taxes its citizens based on their worldwide earnings.

If an American earns a million dollars abroad, that income must be declared for taxes in the U.S. If the local tax where the income was earned is lower than the U.S. tax rate for the income, an American must pay the difference to the IRS. (If it is higher, an American gets credit for the higher foreign tax, lowering their tax liability.) So there is no tax advantage for an American to put their money in Singapore, with its low taxes, because you still need to pay the U.S. tax rate back home. However, if Chinese investors put wealth in Singapore, they do not need to pay taxes in China on the income earned in Singapore, only Singapore taxes. So tax differences pay a huge role in attracting funds from wealthy people to a country.

There's more. Singapore has strict bank secrecy about local bank accounts, stricter than Switzerland. But U.S. law no longer recognizes bank secrecy -- Americans may not set up a bank account in Singapore without signing a form stating that they waive Singapore bank secrecy laws. Furthermore, U.S. law requires foreign banks to report significant transactions to the U.S. government.

Tiny Singapore thus is becoming one of the world's -- and certainly Asia's -- centers for wealth management. All the big private banks have a large presence here. But wealthy Americans have no reason to join the party.

Posted on Mar 15, 2012 at 7:27 PM3 comments


What is your e-mail address?

My e-mail address is:

Do you have a password?

Forgot your password? Click here
close
SEARCH
contracts DB

Trending

  • Dive into our Contract Award database

    In an exclusive for WT Insider members, we are collecting all of the contract awards we cover into a database that you can sort by contractor, agency, value and other parameters. You can also download it into a spreadsheet. Read More

  • Is SBA MIA on contractor fraud? Nick Wakeman

    Editor Nick Wakeman explores the puzzle of why SBA has been so silent on the latest contractor fraud scandal when it has been so quick to act in other cases. Read More

Webcasts

  • How Do You Support the Project Lifecycle?

    How do best-in-class project-based companies create and actively mature successful organizations? They find the right mix of people, processes and tools that enable them to effectively manage the project lifecycle. REGISTER for this webinar to hear how properly managing the cycle of capture, bid, accounting, execution, IPM and analysis will allow you to better manage your programs to stay on scope, schedule and budget. Learn More!

  • Sequestration, LPTA and the Top 100

    Join Washington Technology’s Editor-in-Chief Nick Wakeman as he analyzes the annual Top 100 list and reveals critical insights into how market trends have impacted its composition. You'll learn what movements of individual companies means and how the market overall is being impacted by the current budget environment, how the Top 100 rankings reflect the major trends in the market today and how the biggest companies in the market are adapting to today’s competitive environment. Learn More!