Singapore’s economic development foresight has been tremendous for decades. Economic development is something where you need to think of the long term. Then you see what routes are available to get there you to the goal. Each country and area has different strengths and weaknesses and those need to be worked with and improved to develop most effectively. What will benefit Singapore 20 years from now is not the same thing that benefits them today. And what worked to boost the economy in 1970 and 1990 are not the same strategies that will work today. This is especially true when your economy is rapidly evolving (as Singapore’s is).
To maximize today, you cater to those currently in power. But to prosper over the long term you need to think ahead. The economic landscape changes rapidly (compared to lifetimes). Look at the Singapore of today versus that of 1970 and 1990. Look at China today versus 1990.
Clayton Christensen has one of the few essentially new management ideas in the last few decades (usually management authors just rewrite old ideas and sell them as new. He has several books on the Innovators Dilemma. It is essentially about how new products and services destroy old profitable businesses. You can chose to hope and fight against it, but it won’t work (see people like the entertainment and publishing industry today – fighting against technology just like they fought against videotape then DVDs… they are just incapable of understanding business). Smart businesses will seek to disrupt their own, current profit centers. Because if they don’t someone else will. But this is hard. Christensen has an excellent book on this: The Innovator’s Solution.
Singapore’s situation is very much like this, I believe. And the government seems smart enough to realize this (which is very rare for governments). Singapore knows the world continues to evolve. And hoping that the economy they have today will just be fine 20 years from now is not going to work. They need to be willing to lose some things today to prepare for tomorrow. It will be messy and certainly political pressure will interfere. It is harder to do at the government level than at a corporate level (and most corporations can’t do it). But I believe, Singapore understands they build the most economic prosperity and stability by partnering with Iskandar and Indonesia incredibly closely. And also partnering with China… Iskandar is the economic development zone in Malaysia, just over the straits from Singapore (connected by 2 bridges).
So I am betting Singapore will make the smart short term moves that means some losses today but great gains over the years. Malaysia is in the nice position today that they will really both gain today and gain tomorrow. It isn’t often you get to enjoy that. There will be some special interests who might lose in the short term or, more likely, might think they are not getting enough of the current benefits and want more. But essentially Malaysia’s trade offs are easy. Singapore’s will mean disrupting current profit centers. But they don’t really have a choice. If they just try to ignore the realities then Malaysia and Indonesia and Vietnam and India and China will disrupt those conditions Singapore currently benefits from and Singapore will not only lose what they have today, but not be in place to benefit from what can be created from the disruption.