Can Singapore hang on to its track record as Asia’s ‘safe haven’?

On a hot day in August, Singaporean authorities got to among the city’s swankiest addresses, made their method past a mini golf course in the yard, and charged within. At houses throughout the city — constantly in the most affluent areas — comparable scenes were duplicating as authorities assembled individuals believed of coming from a billion-dollar money-laundering ring.

Once upstairs, the officers banged on the bed room door. When they went into, Su Haijin, a 40-year-old guy of Chinese, Cambodian and Cypriot citizenship, was gone. But not extremely far. On hearing the authorities, Su had actually tossed himself off the second-floor terrace, fracturing his hands and legs. Police discovered him concealing in a neighboring drain.

The case, in which Su and 9 others have actually been charged up until now, has actually mesmerized a public completely unused to seeing the insalubrious side of their nation laid bare. It is not simply the features of the S$1.8bn ($1.3bn) bust — gold bars, designer purses, high-end automobiles, extravagant residential or commercial property and digital fortunes — that have actually amazed. Global banks, rare-earth element dealerships, residential or commercial property representatives and among the nation’s most popular golf clubs have actually likewise been drawn into the scandal.

Singapore has for years flourished in no little step due to its track record as the “Switzerland of the east” — a safe and neutral sanctuary for organization in an at-times intractable part of the world.

The examination has actually caught worldwide attention, “not just due to its size and links to Chinese money”, states Chong Ja Ian, associate teacher of government at the National University of Singapore, “but also because it underscores the risks as Singapore tries to reshape itself in a more competitive and fragmented world”.

You are seeing a photo of an interactive graphic. This is more than likely due to being offline or JavaScript being handicapped in your internet browser.

Singapore, he includes, wishes to be “a premium place for premium business, not just a Cayman Islands or a Mauritius, a place where global capital can come in and be reinvested elsewhere. But a raid of this scale shows the model has serious drawbacks.”

While Singapore’s open, trade-reliant economy has actually shown resistant to external shocks such as increasing worldwide protectionism and supply chain fragmentation, the raid comes at a delicate and destabilising time.

The city-state is battling with increasing inequality — connected to unrestrained capital inflows from the United States, Europe and particularly China — as it gets ready for its very first modification of leader in practically twenty years. Some are questioning whether a financial design so dependent on foreign capital is benefiting people in the method it as soon as did.

There is likewise the fragile matter of weakening Sino-United States relations. As more mainland Chinese money and impact leaks out of China and into Singapore, the nation’s high-wire balancing act in between Beijing and Washington ends up being a lot more precarious. All 10 implicated in the money-laundering sting share something in typical: belongings of a Chinese passport.

A court illustration of 10 of the people alleged to have involvement with a money laundering in Singapore
A court illustration of 10 of individuals declared to have participation with the money-laundering operation that has actually drawn in worldwide attention to the city-state © The Straits Times Illustrations/Cel Gulapa/Reuters

The test for Singapore’s judgment People’s Action celebration, experts state, will be its capability to keep people persuaded of the benefits of staying pro-globalisation and inviting of foreign capital. Navigating the United States-China split will depend on it.

“All foreign policy is domestic policy,” states Donald Low, a teacher at the Hong Kong University of Science and Technology and a previous civil servant in Singapore. “What will shape how Singapore manages its international agenda is how they can manage these domestic tensions.”

‘The money is pouring in’

Under the iron management of Lee Kuan Yew, the creator of modern-day Singapore who passed away in 2015, the city-state was moved after self-reliance from Malaysia in 1965 from a south-east Asian backwater into among the world’s most effective economies.

Lee comprehended that motivating foreign financial investment, the migration of competent employees and quick adoption of brand-new innovation belonged to nation-building. At a time numerous nations were suspicious of worldwide international corporations, Lee invited them with low taxes and aids, weding commercialism with a well-being state that safeguarded people and supplied real estate, treatment and education.

Singapore gained from a duration of quick industrialisation and globalisation worldwide, its tactical area making it a perfect center for trade and commerce. In 1965, per capita gdp was a simple $516 compared to $91,000 today — greater than the United States, Australia, France, the UK and not far behind Switzerland.

You are seeing a photo of an interactive graphic. This is more than likely due to being offline or JavaScript being handicapped in your internet browser.


The financial boom continued under Lee’s followers, initially Goh Chok Tong and after that his kid, Lee Hsien Loong, who concerned power in 2004.

Even the United States-China decoupling and other worldwide shocks, such as Russia’s intrusion of Ukraine, have actually not thwarted its development. Stable Singapore has actually even gained from the external condition.

“There is a paradox that smaller open economies benefit from worsening bilateral relations,” states David Bach, a teacher at the International Institute for Management Development in Switzerland. “As a result of recent dynamics Singapore has become a lot safer for investors and multinationals to conduct business.”

Singapore’s “safe hub” track record — paired with its low taxes — has actually assisted the city-state to take on the huge market aids available throughout big established economies in the United States and Europe, such as the United States’s Inflation Reduction Act or the EU’s Green Deal. 

Singapore gets a larger portion of United States foreign direct financial investment into Asia-Pacific than China and Hong Kong integrated. Overall foreign direct financial investment inflows rose to S$195bn in 2015, its greatest level ever and a 10 percent boost from S$176bn in 2021. Singapore brought in a record S$22.5bn in set property financial investments in 2022 regardless of the worldwide headwinds. 

Many believe the money-laundering scandal will have little lasting effect on Singapore’s track record overseas.

“The money is pouring in,” states Parag Khanna, creator and handling partner of FutureMap, a worldwide tactical advisory company. Investors desire someplace “genuinely open, home to everyone and that isn’t dominated by one power. Hong Kong has long since ceased to be that pan-Asian hub.”

Lawrence Wong, Singapore’s finance minister
Singapore’s financing minister, Lawrence Wong, is viewed as most likely to end up being prime minister, however he would be taking control of at a time when his ruling celebration’s vote share is at historical lows © Edgar Su/Reuters

Among the migrants that call Singapore house is German corporation Siemens. Roland Busch, president, stated in June that the business selected Singapore over locations with less expensive labour and residential or commercial property expenses such as India and Indonesia to construct a brand-new state-of-the-art factory. Globally linked Singapore, Busch stated, was a “lighthouse of stability”. 

Even with slowing worldwide development and weak regional need, Singapore has actually prevented an economic crisis. Core inflation slowed for a 3rd straight month in July to a year-on-year rate of 3.8 percent. Unemployment was 1.9 percent in the 2nd quarter of this year. By contrast, in the very same quarter Hong Kong tape-recorded a rate of 2.9 percent, London was at 5.1 percent and, in June, New York’s rate was 5.4 percent. 


Yet while it flourishes as a worldwide power, Singapore has domestic issues. The long-ruling People’s Action celebration is facing just its 3rd modification in management because self-reliance, with financing minister and deputy prime minister Lawrence Wong — the so-called 4G or 4th generation leader — most likely to take the reins.

Wong will take control of at a time when the PAP’s share of the popular vote is at historical lows. The timing of the handover stays unidentified and whether Lee or Wong will lead the PAP through the next basic election — due to be held by Nov. 23, 2025 — is uncertain. While the PAP’s grasp on power in the quasi-authoritarian democracy stays firm, the opposition Workers’ celebration won a record 10 out of 93 objected to seats in the 2020 basic election for Singapore’s parliament.

You are seeing a photo of an interactive graphic. This is more than likely due to being offline or JavaScript being handicapped in your internet browser.


For Singaporeans getting ready for this next period, the opacity of the succession strategy contributes to a hidden sense of worry about the city-state’s identity. “Philosophically and emotionally, it’s the sense that the ‘Switzerland of the east’ is actually designed more for global plutocrats than ordinary Singaporeans,” states Sudhir Vadaketh, editor of Jom, a Singaporean weekly publication.

Some see Singapore as a method station, others a country house, others a little both, Vadaketh includes. “There’s an inherent existential tension between the two that expresses itself in different ways, and requires perpetual management from politicians and bureaucrats. [August’s] money-laundering case, for many people, reminds us that we may be leaning too much towards ‘global city’.”

Singapore, whose own population is aging, has actually ended up being a favoured house for Asia’s millionaires, triggering regional pushback to foreign employees and migration. House costs and leas have actually escalated, with the mean rate of a personal house striking $1.2mn in 2022, the greatest amongst cities in the Asia-Pacific, according to information from the Urban Land Institute Asia Pacific Centre for Housing. Rents for personal houses surpassed even New York City at the end of in 2015.

Many Singaporeans are rather protected thanks to a federal government real estate plan. Close to 80 percent reside in state flats and the bulk own their house through long-lasting leases from the federal government. But even here greater expenses are dripping through.

“I am moving back in with my parents because the landlord at the Housing Development Board flat I was renting with a friend lifted the rent from $3,000 per month to $5,000. That is crazy for a two-bedroom apartment,” states Nicole, a Singaporean living in Tiong Bahru who did not wish to provide her complete name.

Fuelling a big part of this spike in real estate expenses, particularly because the Covid-19 pandemic, has actually been the motion of abundant Chinese, not simply magnates however likewise talented people with particular abilities. Many are leaving a “common prosperity” project — focused on rearranging more of China’s wealth — and a crackdown on several markets consisting of residential or commercial property, health care, innovation and education.

You are seeing a photo of an interactive graphic. This is more than likely due to being offline or JavaScript being handicapped in your internet browser.


“Singapore-washing”, where mainland Chinese business redomicile and rebrand as Singapore-based global organizations as a hedge versus geopolitical danger, has actually increased. Of 63,801 brand-new business entities formed in Singapore in 2015, 29 percent had bulk foreign ownership, according to analytics group Handshakes. Of those 7,312 were from China, up from 4,951 in 2021. Even HongShan, previously called Sequoia China, a mainland financial investment juggernaut which has actually long focused its monetary firepower on Chinese innovation start-ups, opened a Singapore workplace this year.

“It used to be they all fled to Hong Kong but now Singapore has unintentionally become a favoured destination for rich Chinese but also Chinese professionals,” states Low, the previous civil servant. “Of course there is a reaction to that [in Singapore]. They raise prices all around and fuel the politics of envy.”

The city-state attracted more cash than ever prior to in 2021, with S$448bn in brand-new funds, according to the most current information readily available from its reserve bank, a number anticipated to be even greater for 2022.

But the S$1.8bn money-laundering scandal will strengthen some critics’ view that Singapore functions as a bolt-hole for less-than-respectable cash or flight capital. Since the pandemic, Singapore has actually seen a surge of activity in its decentralised monetary market: household workplaces, personal banking and brand-new discreet, gently taxed funds. These are more difficult to manage and to validate as benefiting the mainstream Singaporean economy, for example there has actually not been a parallel dive in stock exchange listings.

“I think the money-laundering probe barely scratches the surface of the illicit activity that has gone on here for years,” states the Singaporean head of a big global financial investment bank in the city, describing rich Indonesians and other abundant south-east Asian people who have actually utilized the city-state to keep their wealth. “It is something the government must manage better or risk the rise of populism and xenophobia that has swept through so many other countries.” 

Balancing act

The circulation of cash into Singapore is not just from China, nor is it the only nation impacted by the method elite Chinese individuals are moving cash overseas. But it does offer a vibrant, prompt example of how Singapore’s neutrality might become impacted.

Kenneth Jeyaretnam, the secretary-general of the opposition Reform celebration, on his Facebook page kept in mind the money-laundering raids occurred days after a see by China’s foreign minister, Wang Yi, and recommended there was “foreign pressure”. 

A Louis Vuitton shop on Orchard Road, Singapore
Luxury stores on Orchard Road in Singapore. Some of the rich people relocating to the city-state are leaving a ‘common prosperity’ project in China, focused on redistribution © Edwin Koo/Bloomberg

The PAP has actually declined this assertion and released Jeyaretnam with a correction order under its online frauds or so-called phony news law. The monetary regulator stated that suspicious fund streams and other disparities with paperwork triggered banks in the city state to submit reports to the authorities.

One Washington-based policymaker informs the Financial Times that the Biden administration is “watching more closely than ever before” the Chinese business and individuals relocating to Singapore. “The more the volumes of money and people that come in, the more Beijing might start to feel it can intervene in Singaporean affairs,” they state.

The Chinese Communist celebration is frequently implicated of utilizing its soft power device to affect Singaporeans — most of whom are ethnic Chinese — and the mainland Chinese who have actually emigrated there.

A current Washington Post report recommended Beijing was utilizing the Singaporean Chinese Lianhe Zaobao paper to sway viewpoints in the city-state. When inquired about the report, Singapore’s ambassador-at-large Chan Heng Chee in August stated the federal government was “well aware of these activities” and was “vigilant against agents of influence of all countries”.

The Singapore paper stated in a declaration that the Washington Post’s post “made biased comments and unfair statements about Lianhe Zaobao”. The media organisation included it “takes its mission of delivering information seriously and remains committed to neutrality”.

The PAP officially updated its relationship with Beijing this year in locations consisting of innovation along with supply chains. The 2 introduced a brand-new bilateral defence hotline in June and rebooted military drills after a pandemic-related time out. Singapore has at the very same time preserved its close relations with the United States armed force.

But the celebration confesses Singapore’s position is challenging. Wong, the prime minister-in-waiting, this year stated the rift in between Beijing and Washington “appears insurmountable”.

Singapore has “one foot firmly in each canoe, gaining benefits from both [the US and China],” states Drew Thomson, a checking out senior research study fellow at National University of Singapore’s Lee Kuan Yew School of Public Policy. “But those canoes are drifting apart, can you really play both sides forever?”

Data visualisation by Andy Lin and Keith Fray


News and digital media editor, writer, and communications specialist. Passionate about social justice, equity, and wellness. Covering the news, viewing it differently.

Related Articles

Back to top button