State-Driven Markets, Hierarchies and Networks: Singapore's Regionalization Strategy

Abstract

This paper examines how one government attempted to enhance its economic viability by constructing its own markets, hierarchies and networks in the Asia Pacific region during the decade of the 1990s. As a strategy to minimize the negative economic effects of rapid globalization and industrial restructuring, the Singapore government's 'regionalization' programme sought to take advantage of opportunities offered by the 'global production system' that extended into the region. The 'global production system' is an intricately woven set of markets, hierarchies and networks established and maintained by industrial transnational corporations. They strategically disperse headquarters, high value-added and low value-added operations within the organization, as well as establishing alliance and collaborative linkages with other corporations, often across various locations. The Singapore government decided to create institutions and structures that would complement the 'global production system,' in order to maintain or further enhance Singapore's economic competitiveness. This paper examines the Singapore government's regional headquarters project and the regional industrial parks project between 1990 and 2001. It shows how these programmes were designed to be mutually beneficial to both industrial transnational corporations as well as to Singapore's economy. This paper finds that the two systems-the Singapore government's regionalization programme and the global production system-operate not just by economic and political dynamics, but also by social dynamics, especially credibility and trust.