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Thread: Wooing the super-rich

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    Default Wooing the super-rich

    Published May 7, 2007

    THIS WEEK'S TOPIC

    Wooing the super-rich

    What are the positive and negative implications of creating an attractive environment in Singapore for the super-rich? Is there a need for specific steps to ensure that this benefits all Singaporeans?


    FOR the technology sector, there would be two important benefits of this trend: Firstly, the pool of investors savvy enough to invest in technology developed in Singapore would rise and - as evidenced by the angel investor networks and venture capitalists in Silicon Valley - this could be a strong driver of innovation and entrepreneurship in the future.

    Secondly, it is vital for the technology sector to be based in a city that is exciting, never sleeps and offers a diverse palette of entertainment options. This is essential in the field of technology innovation as creativity lies at the core of the intellectual property business. Just as how San Francisco, with its smorgasbord of lifestyle options, helps to make Silicon Valley tick.

    The technology sector would benefit tremendously from the lifestyle options that Singapore is able to offer. Technology is no longer just about packaged software, but is shifting rapidly towards a more social model of usage and virtual communities. Hence, a vibrant Singapore would be crucial in attracting talented technology professionals not only to live and work here, but also to give it a strong user-base of early adopters savvy enough to use and evangelise such social software.

    Innovation and entrepreneurship can be greatly boosted by having a Singapore that attracts the super-rich to not only play here, but also consider personal angel investment in innovative new companies or products.

    - J Anton Ravindran
    Group CEO & Co-Founder
    Genovate Solutions



    ONE positive outcome of creating an attractive environment in Singapore for the super-rich, and a compelling consideration for doing so, is the consequential capital inflow into our country. It is a win-win situation for all when it increases investments that eventually create more employment and generate a boost for our local businesses.

    Unless the super-rich come in droves, I would expect the effects to be isolated, but if they do come about, the government must seriously consider levying a premium on this group for the consumption of essential services that have an impact on our local population.

    Higher property tax, road tax, COEs, medical fees, utility charges as well as educational fees, which without doubt are affordable for the super-rich and are controllable by the government, can go towards subsidising those paid by Singaporeans, meeting the needs of our Budget; or perhaps we can even channel all the receipts to Comcare and Workfare.

    It is, in my opinion, a pragmatic option to prevent Singaporeans from being inadvertently marginalised.

    - Wilfried Kofmehl
    Regional Head of SEA and CEO Singapore
    Bank Julius Baer



    THE lifestyle of the super-rich is one of self-indulgence and consumerism. Promoting an environment that caters to this group of people will be beneficial for the luxury goods market and high-end service providers such as spas, restaurants and clubs. It would create more jobs and it will bring Singapore's high society to another level of sophistication and glamour.

    The downside is that people will become more materialistic and the social fabric might be further weakened. There is already a trend towards higher divorce rates, teenage pregnancies, rebellious children and broken homes. We need to be aware of the social fallout and I believe a lot of the responsibility lies with the media as they have the ability to mould the views of the public. I hope the media will feature stories that teach ideals and morals and not sensationalise the lifestyles of the rich and famous just to sell media space. Excessive emphasis on the lifestyle of the super-rich will breed envy and discontent.

    - Fong Loo Fern
    Managing Director
    CYC The Custom Shop



    WE SHOULD welcome the arrival of high-net-worth individuals as they bring multiple benefits to the economy, especially in the F&B, entertainment and other lifestyle sectors.

    Inevitably, their arrival might further highlight the gap between the lower and higher-income groups, and ostentatious consumption might create social tension. The wealthy may even be blamed for increasing the cost of living in Singapore. However, this line of thinking ignores the fact that wealth and consumption within the country will naturally result in economic opportunities for other Singaporeans as well.

    One characteristic of Singaporeans is a strong desire to be successful. Success is not something to be jealous of but rather something to aspire to. What is important is to widen the opportunities to all people.

    I believe that the widening disparity in income levels is an issue that has been developing for a while, and is not necessarily caused by the recent influx of the super-rich. Further engagement is necessary to address this widening disparity, and the needs of the lower-income groups. However, consumption patterns between the super-rich and the poor are completely different, so it is difficult to see how the super-rich impact on the poor.

    What the government needs to recognise is that, just as Singapore is no longer a Third World country, some of their original thinking about social support services may have become outdated. Attitudes towards the under-privileged need to change, just as attitudes towards other issues such as public service and compensation have changed. The not-so-privileged should not be ignored as Singapore opens its doors to more affluent individuals, and as opportunities for affluence become available to a wider segment of the population.

    - Charles Reed
    CEO
    interTouch



    HAVING been in Las Vegas for a few years, I note that many US residents move there because the state of Nevada does not have state tax. Many wealthy Americans also use Las Vegas as their residence by buying expensive bungalows and more recently, expensive condos too. Wealthy Americans are also high-rollers in Las Vegas.

    Singapore will be an Asian Las Vegas as the security here is probably the best in Asia. Singapore, with the establishment of integrated resorts (IRs), with high security and a clean and green environment, will certainly attract the super-rich, especially Asians. As a matter of fact, in the 21st century, Asians will get rich faster than Europeans and Americans. Singaporeans will benefit from the creation of an environment for the super-rich, more so as the government is determined to take care of its citizens.

    I believe the government will have a new policy to create high-quality homes at reasonable prices for its middle-class citizens. The lower middle class are already enjoying homes provided by HDB. The government will do so to make sure that its citizens will not migrate.

    The super-rich can only buy expensive homes from private developers. The profit made by the developers will also enlarge the income of the government. With more and more super-rich in Singapore, the country will be attractive, secure and comfortable to live in. With more super-rich living here, Singapore will some day become the world's best financial centre. With the government aware of the possible negative impact of creating an environment for the super-rich, many new policies will be implemented to take care of Singaporeans.

    - Ng Kong Yeam
    Group Executive Chairman
    Sino-America Tours Corporation



    THE positive effects are obvious. Singapore will become a much more vibrant and cosmopolitan city. There are likely to be more attractions and activities which in the past might not have been viable to host. Industries which cater to the super-rich like luxury goods retailing and wealth management are likely to thrive. The corollary negative effects are likely to be rising property prices and a higher cost of living.

    To me, the most worrying implication will be the effect of envy on the average Singaporean. A heartlander will look at the sky-high prices of apartments in Orchard Road and wonder how they can ever afford them. Similarly, they will feel that they can only admire from afar the luxury yachts and Ferraris. The risk is that the average Singaporean may feel alienated in their own country. Politically, the government will have to take steps to ensure this does not happen.

    - Wee Piew
    CEO
    HG Metal Manufacturing Ltd



    WHAT makes Singapore attractive to the super-rich would generally make it attractive to all who live here: a vibrant city, good government, great infrastructure, excellent education and medical facilities, low taxes and safety.

    The things to watch out for are cost inflation and the politics of envy. The government needs to ensure that public housing, education, basic medical services and land transportation remain affordable. There must be economic spin-offs for all in the form of job creation and tax revenue.

    While we welcome the super-rich, we must not allow them to create a 'gated community' mentality that would put a barrier between them and ordinary residents. Our law must treat all equally. And our society must remain economically mobile so the not-so-rich can aspire to be super-rich.

    - Lee Kwok Cheong
    CEO
    SIM



    THE creation of a super-rich city has the positive effects of boosting capital inflows and domestic consumption. This will raise the standard of living in Singapore. As a global city with a class of super-rich, Singapore can proudly be called the Zurich of Asia. Higher tax revenue from the super-rich class will contribute to the country's social services.

    The downside is the inflationary pressure caused by the greater demand for goods and services, thus pushing up the consumer price index. Singaporeans may end up paying more for the goods and services in demand by the super-rich.

    GST is a good tool to even out the higher consumption by the super-rich against the average Singaporeans. Higher GST collections, especially on luxury goods, will help to subsidise social services for the majority of Singaporeans.

    - Derek Goh
    Executive Chairman
    Serial System Ltd



    IN ANY robust economy, there are bound to be the super-rich. However, these individuals didn't become who they were overnight. Super-rich businessmen, for instance, arrive after taking many falls, averting many risks and eventually - through their own efforts - converting probabilities into profits.

    There's also a distinction between super-rich businessmen and, say, super-rich sportsmen. The latter are, of course, a select group of individuals who prosper from their talents and athleticism, but in business it's a different ball game.

    Businessmen often risk all (in money and reputation) and gain all. Through business acumen, they put everything on the line, so there is nothing wrong in their being accorded huge rewards and the respect of society. There must be some open-mindedness in accepting the super-rich, for they may be the object of envy.

    However, we should regard them as motivators. Debates and comparisons on income disparity are inevitable, but Singapore must create an inviting environment for the super-rich, whom all Singaporeans can admire and aspire to be. In fact, it should ideally be every Singaporean's dream to become super-rich.

    - T Chandroo
    Chairman
    MMI Group



    GREAT wealth in an open economy not only enhances economic growth, it can be constructively channelled to increase private philanthropy and support for cultural institutions. Global creative talent will be attracted as they will find a willing market here, and we can expect overall standards of service to improve as the super-rich are discerning and will pay for good service.

    Singapore is transforming itself into a world-class city, and we should not be too concerned about apparent wealth disparities, provided opportunities to succeed and acquire wealth are open to those who aspire, and there is a public safety net for those who need help.

    - Donna Meyer
    Executive Director & Founder
    SoluNet Global



    GLOBALISATION and technology are behind today's mega fortunes. The personal taste and lifestyle of the super-rich could become an enduring legacy and very attractive business. In business, their ventures, acquisitions, mergers or expansion could catalyse the market. Their super fortunes could also help the sick and the poor and spur GDP growth.

    Business success, however, does not necessarily qualify a person to change or run the country. It may be beneficial to educate the young not to have excessive admiration of success measured purelyin monetary terms.

    - Tan Kok Leong
    Principal
    TKL Consulting



    SINGAPORE maintains a consistently attractive standard of living focusing on factors like safety, cost of living, and ease of relocation for foreign talent. With excellent infrastructure, education systems, business-friendly environments and a fairly large English-speaking population, expatriates are increasingly opting for Singapore as a top choice for work and relocating with their families.

    Foreign talent coming in would lead to a greater exchange of ideas, a healthy competitive environment and more entrepreneurial ventures. A possible downside of high-net-worth individuals coming in could be that they would typically prefer to work and live near the city centre, which would mean even higher commercial and residential rentals and consequently more traffic in the CBD.

    - Eric Hoh
    Vice-President
    Symantec, Asia South



    MODELLING Singapore into a playground for the super-rich is definitely beneficial for the national economy in terms of the spending that these high-rollers generate.

    However, a possible downside is that we could drift into focusing so much on attracting the super-rich that we neglect our poorer but nonetheless very important Singaporeans.

    To ensure that our efforts in attracting the super-rich benefit everyone, we could perhaps channel some energy to improving common infrastructure (eg, public roads and drainage) and services (eg, at restaurants and shopping malls, as well as childcare), rather than merely focusing on those that cater to the specific niche 'high-net-worth individuals' market (eg, private banking).

    A holistic approach towards improving the overall infrastructure and services in Singapore will go a long way towards attracting the super-rich as well as benefiting fellow Singaporeans.

    - Sam Yap SG
    Executive Chairman
    Cherie Hearts Group

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