This city has positioned itself as a global hub, and created a world-class airline and airport to match. It recognised the potential of a service and tourism industry and underscored this with generous tax breaks to lure investment.
It’s a description that could easily apply to Dubai. Instead, it refers the economic development of the Republic of Singapore.
However, the synergies are not lost on Singapore’s Ambassador-at-Large, Gopinath Pillai, who has been working hard on developing business ties between the two cities.
“What I see are two global cities, each with its own level of competence,” Pillai says from the guest lounge of the Ritz-Carlton in the Dubai International Financial Centre. “These are two places that create their own opportunities.”
Pillai, himself a successful businessman, is in town for the third installment of the Majlis Singapura Distinguished Speakers Series, with his keynote address looking squarely at opportunities that could shape what he describes as a Dubai-Singapore wealth corridor for the South Asian Diaspora.
“At the moment what is happening is businessmen who come to Dubai would also want a centre in Southeast Asia, a centre that is linked to China, into east Asia, and that is what we provide,” he explains.
“Those in Singapore who want to come to Dubai look at it as occupying an identical space for relationships in the Middle East and maybe a little bit towards North Africa and some even look at it as a base for Central Asia.
“So, that is the synergy between the two. One has got geographical expertise in southeast and East Asia and one has got expertise for Central Asia, for North Africa, for the Middle East.”
Pillai says to date there has been a lack of communication amongst the South Asian diaspora. Changing that could also give the Middle East a chance to be part of the dialogue and “play a major part in this diaspora” through joint business development.
A Singaporean of Indian descent, he takes the political hot potato of Indo-Pakistani relations as an example. “Indian capital, diaspora capital…from India, to go to Pakistan is impossible,” he says. “But the Indian living in the Gulf, can, through Singapore, go into Pakistan. That’s our expectation, that Singapore is used as a base for the diaspora to meet and from there to direct their investment into various countries.
“We feel that Singapore would be a neutral avenue, provide some platform where they can meet, exchange views, interact and hopefully greater regional integration will take place and as a result the economies of the region will prosper.”
Pillai says in all relationships, including between Singapore and Dubai, there was always “an element of competition and an element of rivalry and an element of cooperation”.
One of those rivalries is notably aviation. Singapore has long been seen as an aviation hub, via both Singapore Airlines and Changi International Airport, which with 51.2 million passengers annually makes it the 15th busiest airport in the world. Dubai, with its 57.7 million passengers ranks tenth. Just five years ago, Singapore was 19th and Dubai was 27th.
“We respect what Dubai has done,” Pillai says. “But it will not stop us from progressing to be… the most sophisticated part of the aviation [sector].”
By that, Pillai explains, Singapore has taken a deliberate path in developing its high-end manufacturing sector.
“Singapore has got a policy of doing its own training,” he says. “We train our own people in high-level technology.”
However, it’s also a matter of labour constraints. “We have a problem in terms of our population, which Dubai also has,” he says. “But I think Dubai takes a more generalist view as far as immigrants are concerned. You need people for jobs… and enough from South Asia will come and do the job. Singapore, because of its political set up and so on, it doesn’t have the same flexibility in attracting foreign labour; there’s a limitation.
“So, we have to go into a really very sophisticated, high-end type of manufacturing where people are not the main drivers, it is the technology.”
An academic himself — Pillai is chairman of the University of Singapore’s Institute of South Asian Studies — he says it is Singapore’s vocational-driven education system that is a stand out.
“We start with vocational training and this is usually for people who have finished primary school. Then after they have completed secondary school they are in the job market,” he explains.
“Then, if they are good and they are ambitious, they go to the next level and that is the polytechnic and there they get better skills, go into higher levels of technology and then they work in that space for some time. And if they are still ambitious and hard working, they can join a tertiary institution and get a degree.”
He adds: “So we have a through-path from vocational training right up to graduate and the people who have gone through this whole chain are much more in demand in the employment market than a person who has gone straight to university, got an engineering degree.”
It’s a model that has potential in the Middle East. “I would like to see more investment in training in the Middle East,” Pillai says. “It is still not as advanced as in Singapore. The other place where this is happening on a limited scale is China.”
Pillai says the rapid growth of China over the past decade — its GDP growth rate has averaged 9.2 percent a year since 1989 — was pivotal to many countries in Southeast Asia, including Singapore.
“In the Middle East you don’t have a China. There are no real economies that are growing at that sort of pace, that carry with it its neighbours,” he says. “China, they have political problems internally and externally. But looking at it purely from an economic point of view, China is a great source of benefit for the Southeast Asian and other East Asian countries.”
Pillai says it was those reasons that countries surrounding China would have an advantage for some time. “There are countries in South Asia already getting some benefit out of China — India, Sri Lanka, Bangladesh, Pakistan — even though, politically, their internal political problems prevent them to get full advantage. But it’s Sri Lanka that is benefitting, Bangladesh is benefitting. So China is investing in ports in these countries.. and eventually, if China grows the same way, it will eventually benefit the Middle East.”
For the moment, he believes the advantage for this region was “the bulk of Indian money is in the Middle East and that is a very large amount”.
“But, Indians don’t bring the manufacturing, because their own manufacturing is not as strong as China’s. But, on the service side they are equal or sometimes even better,” he says.
At the age of 75 Pillai was no stranger to the Middle East, having been appointed Singapore’s first non-resident ambassador to Iran in 1990 — a position he held until 2008.
A business journalist originally with (unfulfilled) ambitions of becoming a war correspondent, he had gone on to forge a successful business career in manufacturing, services, retail, education and logistics in Thailand, Malaysia, Singapore and India before the appointment.
“When I became ambassador, and at the time they were starting the scheme for non-resident ambassadors,” he recalls. “One of my very good friends, who was a minister, told me, ‘you’re going to have a very tough time, because one: you are from the private sector’, so all the professional diplomats will reject me. Second, he said, ‘you are a business person who wants things to be done very quickly and that won’t happen’. But, now it’s 24 years, I’m still there.”
He says he wanted to go to Iran because he had “a certain understanding of Iran, I was very fond of its poetry, I knew something about its history and culture and I felt that they, being the single-largest country in this part of the world, they had a role to play”.
These days his view on Iran (this interview was given before the recent US-Iran nuclear disarmament deal) is that “things are looking better”. He believes that in President Hassan Rouhani the country has an opportunity to re-engage with the West after what he describes as a missed opportunity with reformist president Mohammad Khatami and the backlash to president Mahmoud Ahmadinejad, which set back the relationship with the West.
“Rouhani has been given this opportunity by the supreme ruler, because they feel that Iran needs to establish the dialogue with the West,” Pillai says. “There can be a positive. They are a very ancient civilisation and I think there can be a positive just like there can be a negative if it is not properly handled.”
He also has strong views on the Arab Spring. “I’m treading on dangerous grounds,” he starts, before contemplating his response. “I think it will take a little time, I’m not optimistic it is going to change the world, I’m not even sure that it is going to yield the sort of results that Obama expects out of it.”
He continues: “I hope it doesn’t spin out of control, that things get worse than what it was. You see, when you replace something you must have something to put into the vacuum. If you don’t have [that], then chaos prevails and that’s my fear. Chaos is not a good thing for any part of the world, so you’ve got to wait and see how things happen.”
For Dubai, the reason for his visit, Pillai says like all growing cities, it faced some challenges ahead. “I see the region going through certain trauma and whether in that rather volatile situation Dubai can stay peaceful and stable,” he says.
“Even in a storm, someone would look for some place where they can take shelter and Dubai can claim that, to be the shelter for those who are somewhat disillusioned or somewhat displaced.
“Whether it’s Libya, Egypt or Syria, money will go to somewhere that is stable and has got policies which are predictable and transparent. It doesn’t change with the day, it doesn’t change with the rule — it is just there. If I come in with $100m, I will know exactly how it is being looked after. That assurance must be there [and] I think Dubai has got that situation, so it will be easy for it to emulate what Singapore is doing.”
It spells reasonably prosperous times ahead.
“When there’s trouble it doesn’t mean even the small countries like Dubai and Singapore will be adversely affected for the next 10 years. But, to an extent it can also benefit.”For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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