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natural, and that a process of ‘conflict resolu- CASE STUDY: SINGAPORE
tion’ will almost immediately follow (Park
and Burgess, 1969 [1921]: 241–2). Perhaps Weak competition
drawing from Marx, who claimed that his-
tory was due to economic conflict as a result The government of Singapore adopted a
of the struggle between classes, Park and national development strategy that was
Burgess drew parallels with the struggle dependent on FDI soon after political inde-
between religious sects as well as ‘races’. pendence in 1965 (see Mirza, 1986; Pereira,
When analyzing conflict emanating from 2000). Before independence, Singapore was
economic competition, the authors adopted a mainly a trading emporium supported by the
typically functionalist evolutionary perspec- British colonial administration. In 1963, after
tive, suggesting that economic conflict will the British had announced that they were
always be a struggle between competitors, going to eventually withdraw completely
whereby the strong will survive and the weak from the region, Singapore joined Malaya to
will fall away, and that this is ‘good’ for the form Malaysia. From Singapore’s perspec-
market. Still, they warn of ‘predatory’ com- tive, this move was designed to give the
petition, where sometimes the strong are not resource-scarce island an economic hinter-
necessarily those who are the ‘best’. As many land, which would help it survive. However,
sociologists and economists have developed due to political and economic differences
the idea further, it is important to note that with the government in Kuala Lumpur,
competition need not always be free and fair. Singapore was eventually expelled from
There are likely to be ‘costs’ to competition, Malaysia in 1965 (Huff, 1994). Without
as competitors might engage in ‘wasteful’ Malaysia, Singapore faced problems of a
activities such as rent-seeking as a shortcut. stagnant economy and a rapidly growing
The ideas of Park and Burgess on compe- population. Thus, the government – led by
tition, cooperation and conflict are directly Lee Kuan Yew’s People’s Action Party (PAP)
relevant to explaining and understanding the – chose the most ‘pragmatic’ solution, which
nature of inter-governmental competition for was to turn to FDI in order to create jobs
FDI. The following sections will use some of quickly (Schein, 1996). The Singapore
these ideas and concepts in examining government designated the whole island as
this competition in a case study of Singapore, an ‘export processing zone’, introduced
which has relied on an FDI-oriented develop- favourable tax incentives to transnational
ment strategy for nearly 40 years. Indeed, corporations involved in industrial produc-
although it is a country with less than tion, and offered prepared industrial infra-
4.5 million residents, it has ranked among structure, providing ready-built factories,
the top national recipients of FDI since the telecommunications, transportation links and
1970s; for example, between 1999 and 2001, utilities. It also heavily disciplined local
Singapore was the sixth highest recipient of labour through nationalizing labour groups
FDI world-wide (UNCTAD, 2004: 10). in Singapore, intervening in the wage negoti-
Although the analysis will oversimplify ation process to ensure that wages remained
several issues – by treating the Singapore highly attractive to foreign investors (rather
government as a single homogeneous than local labour) and reforming labour laws
entity, assuming that all social agents (such as to make work stoppages illegal (Leggett,
national governments) have acted in an ethi- 1993). All these policies combined to create
cal, rational and fair manner, and reducing the a cheap, disciplined and ‘pro-business’ loca-
details presented to the barest minimum – the tion that would be attractive to transnational
overall thrust of the argument should still corporations. The Singapore government –
be clear. frequently described as an archetypical