August 27, 2008 Wednesday

A 'compelling story' will reel in foreign investment

Make Singapore a better place and attract talent: Management guru

By Chua Hian Hou

SINGAPORE has done well attracting foreign investment but it desperately needs a compelling new story to grab some of the US$60 trillion (S$85.4 trillion) available in foreign investment.

Renowned management guru Kenichi Ohmae, a former adviser to the Singapore Government, said yesterday: 'Singapore is not attractive at all' compared with alternative investment sites like China and Romania.

'Where's the new Singapore story? I haven't heard any,' said Dr Ohmae, who was speaking on the sidelines of a forum on global investment opportunities at the Amara Sanctuary Resort.

While Singapore's strategy - business-friendly government policies, attractive tax rates, solid infrastructure - had worked well in the past, it will not be enough in future, said Dr Ohmae.

The prize on offer is enormous - US$60 trillion in 'homeless money' from sources that include pension funds in developed countries and sovereign wealth funds of oil-producing states.

But global investors now favour high-growth countries such as China or companies like Taiwanese electronics contract manufacturer Hon Hai, to park their money, not safe but slow-growth places. Hon Hai makes products like Apple's iPods and PlayStations for Sony in Chinese plants.

Dr Ohmae said good investment sites include China and India, as well as the European Union, which he believes has become in effect a single 'nation state' with a shared common border and currency. He expects Russia to enter the EU by 2020, making it an even more compelling region.

Another competitor that is looming on Singapore's horizon is a possible region-state comprising Shenzhen-Hong Kong-Macau, which will offer low-cost manufacturing, a financial centre and entertainment.

Dr Ohmae also noted that strong companies like Google can pull in investment, whether from individuals or even funds, on their own merits.

With globalisation and the Internet, companies no longer need to depend on land or manufacturing facilities or physical distribution to grow, unlike before.

He cited companies like Microsoft or Google as examples of such global powerhouses. These 'cyber economy' companies are heavily talent-driven, and much of their talent comes from overseas.

While Singapore has a good education system and has in recent years embarked on a drive to recruit foreign talent to work here, its challenge on the talent front is that 'it (Singapore) is not a very attractive place to live', he said.

The low personal taxes are attractive but it needs to do more to improve the quality of life to become the region's Switzerland - low taxes combined with a good standard of living.

Get that right and the country will attract talent to live and work here, build global companies - and reel in investment, he said.

Other speakers at the forum include the opinion editor of India's Economic Times newspaper, Mr M.K. Venu, and Singapore Business Federation vice-chairman Umar Abdul Hamid.

The 20 or so participants includes Mr Kishore Mahbubani, dean of the Lee Kuan Yew School of Public Policy, and MP Penny Low.

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