[Article] Singapore set to be centre of new world order in 2050
Singapore set to be centre of new world order in 2050
DEMOGRAPHER: Bernard Salt | October 09, 2008
FAST forward to 2050 and review the last 100 years.
The century began simply enough. The Americans and their allies won WWII and immediately set about dominating the global economy with a free market that produced consumer goods such as motor vehicles for a rising middle class. The only credible competitor to the West was the USSR, but this system collapsed in 1989, allowing former Soviet states to embrace free market economies.
The undisputed headquarters of global capitalism during the late 20th century was Wall Street; it accommodated institutions that had the capacity to raise vast amounts of capital. But the primacy of New York at the world's financial centre was challenged by London around the turn of the 21st century following two distinct developments.
The new free states of Eastern Europe as well as rising sovereign states in the Middle East orientated to London for capital raising purposes. Russian billionaires and Arab sheiks embraced London's Belgravia more readily than Manhattan's Upper East Side. Then, of course, there was 9/11, which made London seem safer than New York.
Almost two decades after the collapse of the Soviet's socialist republic came the collapse the financial system that underpinned the free market. The resultant state bailout of financial institutions propelled free market economies towards a more restrained version of capitalism. And there you had the beginnings of the Great Convergence: the Soviets (and the Chinese) turned to capitalism in the 1990s; the Americans effectively nationalised their financial system a decade later.
Whereas in the 20th century capitalism's HQ was Wall Street, this role was shared with London after 2001. A decade later it was almost as if the finance-raising capability of New York and London City had been atomised. New centres of world finance emerged simultaneously to buttress the old in cities far removed from the Atlantic nexus, such as Hong Kong, Singapore, Shanghai and Dubai.
Even Sydney benefited from what eventually would be known as the regionalisation of the global economy -- it was regarded as a pleasant enough place from which to manage Asian affairs. Indeed, there was a preference by some global institutions to base their regional offices in lifestyle cities within reasonable proximity, or at least within the same time zone, of the moneymaking coalface. This is much the same principle that permitted Russian billionaires to live in London but to derive their income from Russia.
The global moneymaking coalface in the early decades of the 21st century remained what would be known as the "middle-class-isation" of China, India and much of Eastern European.
But this coalface also included the reorientation of the oil-based economies of Middle Eastern states as well as the reconstruction of Iraq following the withdrawal of combat troops in 2015. By 2025, Iraqi and Afghan migrants had formed enclaves in Sydney's southwest and Melbourne's north, which was not unlike the Vietnamese embrace of Cabramatta and Abbotsford a decade after the end of the Vietnam War.
It took some time for Australian -- and global -- business to appreciate the new economic alignment. The US and Western Europe were still important -- perhaps the most important -- markets. But for the first time in 500 years, a critical mass of other centres of commercial influence emerged in Asia, India, the Middle East and across Russia. The transition manifested itself in both blunt and subtle ways. The largest buildings, companies and capital reserves shifted from New York to Hong Kong and Dubai. By the middle of the 2020s, popular culture television programs were set in a chic English-speaking enclave of Shanghai.
At about the same time, most Westerners learnt how to say "hello" in Chinese: ni hao. Australians could even cite the most glamorous residential precinct in Singapore. And in Dubai one "Australian suburb" was known as the Earls Court of the Middle East.
But I think the piece de resistance of the new economic order came in 2020 when Qantas began a direct air service between Sydney and Moscow.
But there were more subtle effects of what would become known as the advent of the post-Atlantic world. Australians infiltrated the global community to a greater degree than ever before. Gone, too, by the middle of the century, was Australia's notorious cultural cringe. No longer were Australians chronically aware of their isolation from the centre of global economic and cultural power. And the reason is not that some whiz-bang new technology enabled Australians to travel to Europe and North America in four hours. The reason is that after the 2008 financial meltdown, the centre of world economic activity migrated closer to Australia.
Astute players in the Australian property industry read the changing landscape and positioned their businesses in Asia's ascendant cities. Some -- in fact many -- had developed links with Dubai. This was especially the case with property consultants from the late 1990s onwards. But the real prize came with the recovery in 2010, when new financial services businesses burgeoned and demanded office and hotel accommodation. Part of this momentum applied to Hong Kong and Shanghai, but for many Western companies these cities carried sovereign risk. The city that boomed most as a consequence of the meltdown was Singapore. It offered cultural links with Britain and the US. It offered connections and proximity to China, India and Japan. The business community spoke English. And, best of all, Singapore had strong cultural and business links with Australia.
In view of this "future history", it might be a good idea to stay a night in Singapore on your way to London.
Bernard Salt is a Partner with KPMG; bsalt@kpmg.com.au
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As a Singaporean, I somehow am a bit skeptical about this "prediction" in The Australian. And amongst it all, I would like to ask, what happened to Singapore's lower and lower-middle class population? Between now and 2050, it might take a lot of uncertainties and friction before this state is reached.
I also think the Singapore of 2050 will be quite unlike the Singapore of 2008 that I know of, and perhaps the excitement lies in seeing how we change over time. That is, if I still call Singapore home by then.