THE POLITICAL ECONOMY OF SINGAPORE REGIONALISATION POLICY

Abstract

Regionalisation has become a topical issue discussed widely by the Singapore government recently. The ultimate goal of investing Singapore's capital, expertise and capabilities in other countries is to strengthen the domestic economy and to enhance Singapore's position as an international business hub and global city.

This study evaluates Singapore regionalisation policy in light of government efforts and the factors underlying such policy. It is found that the Singapore government not only initiated the regionalisation thrust through its fiscal policy to encourage local private enterprises to venture overseas, but it also took the lead to invest abroad through its various agencies, such as the Government-Linked Companies (GLCs) and statutory boards. Due to the fact that regionalisation is largely initiated by the government, the factors underlying such policy include not only the economic aspect but also the political and social aspects. Besides the possible economic gains, the government invest in the region in order to help its neighbour to grow and to develop strong and cordial relations with them. In addition to that, the Singapore government also ventures into the Asia region because of their common languages, culture and tradition where Singapore investors are more familiar with the business environment and presumably would do better in the region. The extensive role of Singapore government and its various political and economic implications arising from the regionalisation initiatives are evidenced in tl1e several joint-ventures in Malaysia, Indonesia, China, India and Vietnam.