The Scary Truth of the Casino

So the "result" of whether a casino (or maybe even two) would be set up would be out tomorrow. No prize for guesing what it would be. A friend of mine has once remarked cynically that the real debate was never about whether to set up a casino but where (Marina Bayfront or Sentosa). Anyway, all these futile debates about the merits and demerits of setting have obscured us from a even more important and scary issue and that is: Why is the government adovcating the setting up of a casino now when 10 years ago it would not even have been conceivable? At first the question looked really trivial. Did the the government not already say that the world has changed and we now cannot afford to change with it? But this is only part of the story, the scary and deeper truth is that the government has really run out of options of how to climb the next peak of economic growth for our country.

There was once a time when our world was dichotomous. There were the First World countries like USA, Japan, UK, etc and the there were the Third World countries like India, Brazil, China. The differences and the unbridgeable gaps between the countries from the two groupings meant that these two groups of countries could literally well be two Worlds. Among the many differences, First World countries were hosts to the high value add and capital intensive manufacturing activities like production of manufacturing equipment, aircraft engines, R&D while Third World countries kept to labour intensive activities like textiles, assembly of consumer electronics, etc. Then enter the Dragon (pun intended) in the late 90s (although China began to open up during the era of Deng Xiaoping in the early 1980s, we only begin to really feel the impact in the 90s) and the rules of the game changed. The textbooks would have declared China as a Third World country and therefore following the rules of the game, China would be a great magnet for all your labour intensive manufacturing activities. First World countries like USA and also Singapore should have nothing to fear for China should not be competing in the same league. There should be no overlaps in the industries that Singapore and China are competing right? Wrong. The truth which defied what the textbooks would have you believe is that China is now fighting for the same pie as the Third and the First World countries. In other words, China is taking the full spectrum of economic activities from labour intensive manufacturing to capital intensive manufacturing to R&D and even services as well. And Singapore which has been patting its own back on how well it has managed to sidestep and be a few steps ahead of other developing economies back then suddenly finds itself blocked in all quarters by China. And the rest of the pack like Malaysia and Thailand after the setbacks from the Asian Financial Crisis are catching up. One could almost hear the braying of the hounds.

In recent years, the government has been frantically trying to steer Singapore to venture into new niche areas to avoid direct competition with our neighbours and China. Hence the foray into the biomedical industry. One could not help noticing that Singapore has looser regulations on R&D for the biommedical and pharmaceutical industries. The reason is obvious. The message is "whatever you can't do elsewhere, do it in Singapore". The decision to build a casino could be framed within a similar context.

Not too long ago, I had a meeting with a board member of one of the statutory boards. He said that we are in a more scary position than in 1965. Back then, we have nothing but we know where to head for. The government knows that we have to make up for our lack of natural resources by attracting foreign investments. And on retrospect, despite all the dangers in the world (the threat of communism, hostilities of neighbouring countries), the economic competition was less serious simply because not many countries seemed to be focusing on economic growth. The situation now is the reverse. We have climbed the ladder and reached the pedestal of the First World but the air is much thinner than we think and suddenly we realise we do not not where to go next. We do not know 10 or 20 years down the road how we can sustain that kind of economic growth to continue to generate jobs for our people and to sustain our standard of living. Everywhere we look, every path we want to take we see other people already there and on the way there. And a colossus like China basically sits across all pathes.

The point I want to make is not whether building a casino or even two would generate more economic and social benefits than costs or to assess whether it is the right way forward. My point is that if you can read deeper into the government's message, it revealed something even more scary and that is the government that the people has always thought to be infallible has now run out of options. It is not the PAP's style to reverse its policies wantonly. The party has always prided itself on how far-sighted they are and that their judgment is never wrong. To reverse its many years of "no" to casino and to push for something that goes against the party's conservative philosophy and image reveals a kind of desperation. The worse thing is unlike the venture into the biomedical industry, building a casino is really not a new move, at least among neighbouring countries. It is a reactive move because the government argues that other countries have built or would be building anyway. This is another startling revelation of the government's lack of options. Did Singapore not always pride itself as a forerunner? Remember the attempts to emulate Singapore's economic development model by some countries and Deng Xiaoping's unparallel compliment when he told his bureacrats to "learn from Singapore"? And suddenly, the next big economic move was a defensive one. For a government that more than anything relies on "delivering the goods" to the people to keep its mandate to rule, its present lack of alternatives is dire news for itself indeed.