Business in Asia –
Singapore:   The Next Hong Kong?

by Sue Dockstader
This is part two of our ongoing series on business in Asia.
Arriving on the island nation of Singapore, one of the first things you notice is how green it is. The wide tree-lined boulevards leading from the airport to the city center give off a wonderful sense of calm, absent in many other Asian cities. However, as you relax back into your taxi seat your reverie will be broken by the constant ringing of a bell. This is not Singapore’s answer to radio, but a frequently ignored reminder from a government-installed device that the driver is exceeding the speed limit.

Apart from an obvious effort on the part of the urban planners to provide a spacious and relaxing atmosphere for the country’s 2.6 million inhabitants, there is another simpler explanation for the lush foliage - namely 78" of rain per year. (San Diego averages 9.5" per year). Being only 2 degrees north of the equator, the frequent but brief rainstorms are to be expected and flight arrivals coinciding with the usual 4 p.m. downpour are to be avoided by all save the hardiest of travellers. Generally the weather in Singapore is very constant, varying only between 64° F - 86° F all year round. However this balmy climate does not affect the industrious nature of the Singaporean workforce. As Lee Kuan Yew (the Prime Minister from 1959 to 1990) once observed, "It is the only place so near the equator where people do not go to sleep after half-past two if they have had a good lunch."

Singapore covers 240 square miles, consisting of the main island and 57 surrounding islets, and is home to a remarkable mosaic of peoples causing it to be dubbed "Instant Asia." Singaporeans are Chinese, Indian, Indonesian, Malay, and Thai. They are Buddhist, Christian, Confucian, Hindu, Moslem, and Taoist. They have four official languages - Malay, Mandarin, Tamil and English - but Singaporeans also speak Cantonese, Amoy, Hokkien, Teochew, Hainanais, Hakka, Foochow, Teluga, Punjabi, Hindi, Javanese and more. This certainly provides a challenge to the business visitor anxious to respect a Singaporean counterpart’s culture.

The first requirement of any business encounter is to establish the nationality of the people you are dealing with. Although Singaporeans consider themselves above all to be citizens of Singapore and are understandably proud of the achievements of this former fishing village, the varied customs of the diverse population are still observed. Public holidays, for instance, celebrate a mixture of festivals from each group of society and careful checking is advised before planning a business trip.

As in other parts of Asia, name order can cause confusion to the newcomer. In the Chinese community, which makes up 77% of the island nation, the surname will usually come first with the given name last. Many high-powered business meetings have faltered on this fundamental issue. One American business executive determined to show off that he had done his homework during his meeting with a Mr. Leong Weng Chee, peppered his comments with lots of well-placed Mr. Chee’s. He received a severe reprimand from his Singaporean counterpart after the meeting for being inappropriately familiar having spent the whole meeting addressing this VIP as, in effect, Mr. Charlie!

Politeness and mutual respect are paramount in all business transactions and developing a close and trusting relationship is essential to success despite the apparent westernization of all Singaporeans. A European company was reminded of this to its cost after the recent retirement of its CEO. The major client of this company was lead by an elderly Chinese gentleman with whom the former CEO had developed a close friendship with over their years of business together. After his retirement and return to England the business of the company slumped because the young executive replacements had overlooked the necessity of reinforcing the CEO’s relationship with their major client’s president.

The business lunch can prove interesting if you are not well prepared. A Chinese meal will undoubtedly mean chopsticks, whereas if your host is Malay or Hindu, you may get no silverware at all, with your right hand as your only utensil. Remember that although pork is a staple of Chinese cooking, Malays will not touch it. In contrast, Hindus and Buddhists will not eat beef. Some local dishes, like the famous Indian fish head curry, do not sound too appetizing and can look pretty unusual served on a banana leaf instead of a plate. However, it is imperative to try everything offered by your host. This is not only to show respect of his choice, but also as an indication of your attitude to your business relationship. Just think of all the contracts you might win as you try to swallow the fish eye, which will be ceremoniously presented to you as some kind of tradition, but really amounts to a test of your commitment to the alignment of your companies. At the end of the meal be prepared to "yam sing" or down your drink in one gulp. When one person stands and announces "yam sing" as he drains his brandy glass, he is issuing a challenge for you to do likewise and failure to follow would cause great offense.

One of the great delights of Singapore is the tremendous variety of cuisines available and with government health regulations strictly enforced you need have no concerns as to the hygiene of even the tiniest backstreet cafes or street vendors. The reasoning behind some of the other government policies is sometimes a little more esoteric. Some examples: Chewing gum has been banned because of the mess it made of the sidewalks; Durians are not permitted on the subway system, presumably because the flesh of the majestic fruit is too smelly; Signs are posted in restrooms as a reminder of the fines imposed should you forget to flush. At one time the government even had a campaign indicating acceptable hair length, advising that those with longer hair "would be served last."

The censorship of the press is a surprise to many visitors to this tropical island which superficially appears to be such a tranquil democracy. The British publication The Economist had its circulation capped and was forced to post a bond of about $124,000 in a recent dispute with the government. The dispute centered around the government’s insistence that it had the right to an unedited reply to articles about Singapore that appear in foreign publications. The government’s skittish attitude as to how the world’s press portrays Singapore seems strangely at odds with its aim to take over from Hong Kong as the business and communications hub of Southeast Asia should the Chinese government limit existing press freedoms. Many other publications such as Time and the Asian Wall Street Journal have had their circulation capped or restricted in other ways by the government. Magazines such as Cosmopolitan have been banned altogether because of their racy content.

In an effort to increase the population to sustain economic growth and ensure that the workforce expands to help care for the growing elderly population, the government recently replaced its one child policy with one that encourages couples to have three or more children. This new policy rewards obliging couples with tax rebates and other financial incentives. Another social program aimed at family life is the government-sponsored "love boat" cruises where male and female university students are invited to participate in the cruise in the hope that they will meet a future spouse with a similar educational level.

Despite some of the more unusual directives of the government, Singapore is very receptive to foreign business and investment. It has numerous incentive programs designed to attract foreign investment including tax concessions, research and development incentives, export incentives and loan/grant programs. Apart from certain sectors that the government has designated as vital to national interest, such as weapons and munitions manufacture, there are very few restrictions on the type of business ventures open to foreigners. Generous tax holidays are available in some specified "pioneer industries" – such status typically being assigned to high-technology products and engineering and many computer-related industries. In stark contrast to the obstacles often faced by new businesses in California, the Singapore government will go to great lengths to encourage overseas business. A U.S. computer company recently established a manufacturing plant in Singapore and in addition to various incentives such as the provision of a 14 acre site, the government implemented a new course at the university to ensure that a ready supply of appropriately qualified staff would be available once the facility was ready to commence production.

Despite the numerous languages and dialects spoken, English remains the language of commerce, so verbal communication is rarely a problem. But be prepared for the Singapore habit of ending each phrase with a quizzical "lah," rather like the habit of some Canadians to finish sentences with an "eh." However, there are certain issues of protocol to be observed to avoid other forms of miscommunication and misunderstanding. Gift giving can be a major headache in Singapore because of the differences between the various ethnic groups. Among the Chinese community gifts of orange trees and brandy are traditional at Lunar New Year. At other times of the year business giving can be quite extravagant, but must always be gracefully accepted to avoid offense. Within the Malay circles Muslim rules apply; gifts of alcohol, pork, knives or pictures of dogs or scantily clad women are not advised. Also remember to offer gifts with the right hand only. In the Indian community brightly colored gifts of red, yellow or green signify happiness whereas white and black are to be avoided. Never give frangipani, as this local flower is associated with death and funerals.

Another surprising facet of Singapore life which has recently gained in popularity is that of the tea house. Although the procedure for taking tea is not quite as complicated as in Japan, the collection of tiny cups and tea pots can be confusing at first. The taller cups are for "sniffing" only, so you can appreciate the tea’s color and fragrance. The second pouring into the round cups will be the one to drink. If you are with important guests, be sure to serve from left to right as the VIPs will by tradition sit to the left of the host. As many night clubs keep labeled bottles of brandy for their regular customers, some teahouses will keep your unused tea leaves ready for another visit.

Whether Singapore will ever take over from Hong Kong as the center of finance and commerce in Southeast Asia remains to be seen. In the meantime, it will continue to flourish and expand to provide one of the most pleasant environments in the Far East in which to do business.

Sue Dockstader is an English and Hong Kong lawyer who has recently moved to San Diego after spending six years in Hong Kong.

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