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Singapore firing on all cylinders to attract MNCs

Is that a good strategy for a developed country with healthy reserves?

In poor, developing countries, it makes sense to attract foreign MNCs. They mobilize resources like labour and land which would otherwise be idle, as well as provide capital.

But in a fully developed economy like Singapore, resources are not only fully employed, but stretched. In fact, the demand for land is so great, the resulting high rent is making many businesses uncompetitive, except locally where customers have no choice but to pay the high prices demanded, even if the products or services are subpar.

There is also not enough workers. To attract MNCs, the government has to allow them to employ foreigners, leading to overcrowding, social friction, high cost of living and the displacement of Singaporeans.

MNCs are not here to transfer know how and trade secrets to Singaporeans. They are here to maximize profits. If the government offers them very attractive incentives like low tax, assistance to relocate and train workers, guarantee them rights similar to local companies, help them enforce copyright and therefore profits, etc, they would come.

In exchange, they promise to create a certain number of jobs for locals. However, there are many ways to circumvent the promise. For example, they can bring in their own managers and specialists and encourage them to apply for PRs without having to give up their citizenship. Once approved, they become locals and count towards creating local employment.

If another country offer better incentives, these footloose MNCs will move on. Employees who have gotten PR-ship can drop the PR and move on with the company. What will Singapore gain in the long run?
We have had so many pharmaceutical MNCs here. Have we produced one world class pharmaceutical company? No, we have only produced a few small companies servicing the MNCs which will die a natural death when the MNCs move out.

IPhones are assembled in China by a Taiwanese contractor called Foxconn. The Chinese workers make a meager salary working in dehumanizing plants. Foxconn makes a decent profit but the bulk of it goes back to the shareholders of Apple. Even the raw materials are sourced from other countries. How does it benefit the host country in the long run?

To produce any world class company, even if it is a small, niche company, the entrepreneur has to be running the business himself, years on end, fine tuning and improving all the time, with a supportive home environment. He will never produce a world class company working for others. If Mr Chan thinks “capabilities will be acquired over time”, he is sorely mistaken. It will only be created if we are chasing our own dreams, day in, day out.

But it is an uphill task when rent and cost of living is so high and top talents prefer working for MNCs, GLCs and the government.

Since independence, our government has sought to attract MNCs because that’s the main thrust of its strategy. MNCs have helped us in our development when we were a developing economy. But we are now fully developed, and stretched. We would do better to nurture local companies than to attract even more MNCs to compete for finite and limited resources.

MNCs have their own interest, which is to maximize profits regardless of externalities to the host country, including jacking up cost of living, pollution, congestion and disrupting the locals’ way of life. When we are no longer attractive, they will move on, leaving us to pick up the pieces. At some point in time, we have to start chasing our own dreams, not that of others.

 

Foong Swee Fong

 

 

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16 Responses to “Singapore firing on all cylinders to attract MNCs”

  • Harder Truths:

    The era of MNC’s in $G is over. $G is too expensive for the region. You will see these MNC’s looking for cheaper and better slaves like India or Vietnam. Regionally $G has no further use as a hub. Nowadays virtual offices make such concepts obsolete.

    $G is going to see a lot of companies downsize and quite a few leave altogether for much greener pastures. Building & Construction, Information Technology, Banking, Oil Industry trades -all these have better places to now go.

    Of course even with this there will be more and more FT coming in to chase less and less jobs – if these are not made redundant or vir

    This year was not tough. Next year will be real tough. We shall see if $G younger people can be as tough as the FT. I think the FT are too tough, too cunning and too well organised to be beaten.

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  • PAP CLOSE DOWN:

    My thoughts exactly. Since I’m not going to benefit, MNCs might as well don’t come and add to the crowd.

    Why don’t they go China direct? Since they love the cheap labor there? What’s stopping them?

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  • SG no better solution:

    I believe SG only can operate on a Low Productivity model it has since day one.

    It has to operate based on opening the gates widely and using cheap labor at expense of quality and productivity.

    I wont say there is a strong presence of crony capitalism.
    That is not politically correct to say.

    And money from switzerland will continue to be welcome.

    So , sg has ran out of solution despite covid.

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  • What Does Chan Know ?:

    He has not done any business before except do military work. Yes, what does he really know ?

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  • xoxo:

    Just another expen$ive clown with cheap antics.
    I am not amused.
    On the contrary, i think it nsuseating!

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  • Just an observant:

    @ Why don’t they go China direct? Since they love the cheap labor there? What’s stopping them?

    By the way hows our investment returns on all this projects e.g. SuZhou , TianJin eco city, Chong qing , ……

    Anyone ?

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  • MNC=MakeNoComplaint:

    •Focus on Agri-MNCs (AMNC)

    •Make SG a successful Organic FarmCity (OFC)

    •GardenCity concept is wasteful (maintenance costs).

    ▪Convert 90% of SG gardens into AI Vertical Farmlands
    (AIVF).

    •Erect multilevel AI Farmroofs over rivers, reservoirs,
    highways and cemetaries.

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  • MNC=MakeNoComplaint:

    •Focus on Agro-MNCs (AMNC)

    •Make SG a successful Organic FarmCity (OFC)

    •GardenCity concept is wasteful (maintenance costs).

    ▪Convert 90% of SG gardens into AI Vertical Farmlands
    (AIVF).

    •Erect multilevel AI Farmroofs over rivers, reservoirs,
    highways and cemetaries.

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  • Taleban:

    Look at Seagate, big MNC.
    They were once the largest employer after the Singapore Government.
    Seagate supplied more than half the world demand of disc drive and they were shipped mainly from its Singapore plant.
    Seagate have so many vendors and some of them are listed on the SGX.
    So what happened to Seagate now?
    They moved to Thailand, China…
    What about Singapore, their largest factory?
    Singapore got [email protected]#$%^&**
    Minister Chan still trust these MNC? Fair weather friend.
    After 40 – 50 years of economic development, do we have our own MNC? NO.
    Look at China. After 40 years of economic development, they have so many world class MNC.
    Where did Singapore gone wrong?

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  • Jman:

    If our SMEs can step into the shoes of these MNCs, and be regional and global champions, then the conventional wisdom would be that these MNCs are not going to do us that much good.

    But that is certainly not the case right now, nor does it appear likely to be the case in the medium term. Most of our SMEs just cannot seem to find the necessary mojo to make it regionally and globally.

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  • A nation of workers!:

    This bunch of leeders are devoid of ideas and they only know how to operate the way they have been operating for the past 50 years! They only know how to attract MNCs to operate here; pay corporate taxes and hopefully employ some Singaporeans.

    In other words, this gahmen operates like traders. Singapore – a trading post for entrepreneurs. They just don’t know how to be entrepreneurs themselves and so we will continue to be a nation of workers, working for MNCs.

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  • Tremendous:

    The village chief announced that a Corea car maker Hyundaie is bringing $400m if business into the village. Oh dear, after losing billions of Highflux water plant, a highly strategic village asset to another village. To gain millions, and lose billions is strange maths.

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  • uselesstankl:

    Just an observant:
    October 21, 2020 at 1:25 pm (Quote)
    @ Why don’t they go China direct? Since they love the cheap labor there? What’s stopping them?

    By the way hows our investment returns on all this projects e.g. SuZhou , TianJin eco city, Chong qing , ……

    Anyone

    zzzzzz

    All investments ” GONE ” DOWN THE DRAIN !!!

    ask Kouk brothers, they also built another IP at Suzhou, after TH, and Suzhou town council built theirs next door. What do you think happen, you undercut each other ma.. .

    So who gives cheaper rent gets the business.
    Maybe selling properties there maybe earn some small dollar…..

    Maybe our ministers go sell backside, can get some business.

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  • uselesstankl:

    In India, they rope in the monopoly, so that Suzhou won’t happen again. But more % goes to partners, and TH puts in more $$$.

    So now, all investments in India, also loose money, year after year, SINGTEL, DBS, pumpin zillions of good $$$$ from your CPF, tax, etcetc

    You THINK pap ministers are top GRADE ???

    MEDIOCRE IS THE WORD OR LESS KINDLY,

    ” IDIOTS ”

    in the likes of LKY, gct, kawh, two, tan, Ng….etc etc

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  • TUMASIK Patriot:

    Attracting MNC is the SUCCESS story of the Bastard who sold our Freedom and Life in the late 60s & 70s especially after meeting a fellow bast**d name Kissinger who was Promoting Depopulation of the Third World…

    Workers Lost their freedom to STRIKE and worked longer hours with fewer holidays to ACCOMMODATE the MNCs…

    AND…LEEgalizing The Abortion Act in compliance with Kissinger’s Depopulation Programme for 3rd world…Losing 1,000,000 unborn from 1974 to 2016

    Success at what PRICE??? or NOW with ah seng’s repeat performance???

    Somethings Sometimes NEVER CHANGE…

    Is it NOT the time for a CHANGE…you stoopid Sheeple!!!

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  • Pappy is corporate mentality:

    To err is human, to blame it on someone else shows management potential. The man can do more than he thinks he can, but usually he does less than he thinks he does.

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