Page 420 - The ISA Handbook in Contemporary Sociology

9781412934633-Chap-26 1/10/09 8:57 AM Page 391

SINGAPORE’S DEVELOPMENT POLICIES 391

market, something Singapore could never it generally had ‘excellent’ diplomatic rela-
offer. Thus, the Singapore government came tions with most countries in East and
up with an even more innovative strategy Southeast Asia (Dent, 2003; Leifer, 2000). It
involving cooperation with other national also had a good reputation as an effective
governments to attract FDI jointly and thus industrial developer and administrator; as
to pre-empt further head-to-head competi- such, cooperating governments felt that they
tion. This was made possible because FDI could learn from Singapore’s earlier experi-
could be ‘disaggregated’ (Dicken, 1998). In ence. Therefore, they were willing to cooper-
the 1990s, transnational corporations became ate to jointly attract FDI. This new
more involved in ‘flexible production’, cooperative strategy was the focus of the
where they divided production of a single Singapore government’s so-called ‘regional-
product over several countries to optimize ization’ policy, introduced in 1990 (see Ho,
cost efficiencies. In other words, one televi- 2000; Perry and Yeoh, 2000).
sion set could be made up of components The Singapore government further intensi-
assembled in different countries; for exam- fied the regionalization policy by introducing
ple, the screen was made in China, the exte- an innovative scheme known as the ‘regional
rior casing in Malaysia, the circuits in Japan, industrial parks’ programme. Here, the
the wires in Indonesia and the final product Singapore government was directly involved
was assembled in Singapore. The final prod- in the development and administration of
uct could be sold anywhere in the world. industrial parks in selected cities across the
Furthermore, there might be a possibility that Asia Pacific region. The logic was again
individual components would not even be cooperative. Transnational corporations
made by subsidiaries of the parent company would be able to enjoy low rent and labour
in another country. The parent corporation costs, as the parks were located in emerging
might subcontract components to third party industrial zones. However, this estate would
companies (these are known as OEM or orig- be managed by the Singapore government.
inal equipment manufacturer companies), This was attractive to transnational corpora-
and the process is sometimes known as out- tions, as they regarded the Singapore govern-
sourcing. National boundaries no longer ment as being efficient and trustworthy in
matter to transnational corporations in terms industrial administration (see Schein, 1996).
of the product’s nationality; borders only These parks also promised to have ‘Singapore-
matter in that they represent different costs or standard’ industrial infrastructure and admin-
capabilities (Dunning, 1998). istration, which was held in high regard by
The Singapore government observed the transnational corporations. The cooperating
process of increasing differentiation of FDI, host government would benefit from all the
and adopted new strategies to take advantage developmental effects of FDI (such as
of it. Rather than compete with other govern- employment creation and income generation
ments for FDI, it entered into negotiations through wages). For its part, the Singapore
with several national governments in the Asia government hoped to benefit in part from
Pacific region to jointly cooperate on attract- the sales of the industrial properties and the
ing FDI. The plan was to split the FDI in a management fees, and in part from the
manner that would benefit both governments. higher value added investments that went to
For example, transnational corporations Singapore. By 1995, the Singapore govern-
could situate certain strategic tasks such as ment had launched eight industrial parks;
Headquarters functions or other higher value they were in Batam, Bintang and Karimun
added production in Singapore, while locat- (Indonesia), Suzhou and Wuxi (China),
ing their lower value added operations in a Bangalore (India), Song Be (Vietnam)
cooperating country. Towards this end, the and Rayong (Thailand). Each of these
Singapore government was fortunate in that regional industrial parks involved the direct