.

Tapping mini-hydro electrical potential
CEB accused of not enlisting private sector involvement

by Niresh Eliatamby
One of Sri Lanka’s prominent constructors of small hydropower stations harshly criticized the Ceylon Electricity Board for virtually ignoring the country’s mini-hydro potential, and for failing to give proper financial support for developing this area.

"We sell our electricity to the CEB, for use in the national grid. But the CEB is only paying for the cost of maintaining the power station. This is very discouraging since the country has a huge amount of mini-hydro potential,"’ said Dr. Nalin Walpita, Chief Executive Officer of Zyrex Power Company Limited, during a tour to one of their sites by government officials and journalists.

Experts say the country’s small rivers have more power generating potential than the entire output of the CEB of 1,500 mega watts, at present. Most of these rivers are in the Central, Uva and Sabaragamuwa provinces, and are tributaries to the large rivers.

Private companies have already identified suitable mini-hydro sites to provide 341 mega watts of energy, and are already constructing power stations which will provide 83 mega watts, said Dr. Walpita.

Zyrex officials said that the CEB only seemed interested in larger projects such as the Kukule Ganga hydropower scheme, which is far more costly and is a staggering three and a half times less economical than a mini-hydro like the one at Delgoda.

Deputy Minister Pavithra Wanniarachchi, who headed the tour party to the Delgoda Ganga Mini Hydro Project in Kalawana, said she was very upset that CEB chairman Arjun Deraniyagala did not participate at the function, and noted that this is typical of the CEB’s attitude towards private sector co-operation in building mini-hydropower stations.

"I have promised the people of Sabaragamuwa that I will develop the area. But with the meagre funds available to me from the government, as an MP, I can only hope to build a bridge or two in about five years. We need the private sector to be involved, and the CEB’s attitude is very upsetting," Mrs. Wanniarachchi, the Deputy Minister of Health and Indigenous Medicine, who is also a close confidante of President Chandrika Kumaratunga, said in her public address.

"The minister in charge of power personally ordered the CEB chairman to be here, but he didn’t come, and he didn’t tell me wily he can’t come. I can only assume that he doesn’t comprehend the importance or the potential of mini-hydro schemes. Perhaps if he took the time to come he would understand, and we could see more development," added the visibly angry deputy minister.

Mrs. Wanniarachchi trekked some distance, clad in a sari, along a muddy and slippery 800-meter trail, to inspect the construction, together with her father, Dharmadasa Wanniarachchi, a prominent Sabaragamuwa politician.

Board of Investment chief Thilan Wijesinghe, who took time to make the 3-hour drive from Colombo, before rushing off to sign the P & O deal that afternoon, explained that mini-hydro power development is an area where Sri Lanka is totally self-sufficient, both in technology and in finances.

"A large number of local investors have come forward to fund and develop mini-hydro power plants," Wijesinghe announced in his address. "The BOI is helping them get approval."

But CEB officials who were present defended themselves, saying that they lacked adequate funds to develop the mini-hydro sector.

"We cannot pay any more, because the cost will have to be passed on to consumers. If consumers are willing to pay higher electricity bills, we are prepared to pay more," said Bandula Thilakasena, Deputy General Manager for Private Power Supply, of the CEB.

Thilakasena added that the CEB has approved 35 mini-hydro projects so far. Eight are already functioning, and 27 more are in various stages of approval or construction.

Shavindra Fernando, Deputy General Manager for Generation and Planning of the CEB, added that Zyrex had raised some important issues, and that the CEB would work towards ironing out the problems.

The CEB officials did not comment on the absence of their chairman.

But Zyrex officials accused the CEB of actively working to block the development of mini-hydro plants which have private sector participation.

"We know that the World Bank made a proposal to help out. But the CEB hid this proposal," said P. S. De Saram, Director-Technical of Zyrex.

BOI Director-General Wijesinghe recounted how the BOI became interested in small power projects, after one desperate private investor approached him pleading for help, after investing in a mini-hydro and losing a large amount of money due to problems with the CEB.

The Delgoda power plant will produce 2.5 mega watts when completed later this year. It cost 210 million rupees, all of which was locally funded by Zyrex’s affiliates, Central Finance and B. P. De Silva Holdings, a century old Sri Lankan company based in Singapore.

The plant has three turbines. Two of these are British-built models of 1250 kilowatts each, while the other is a Sri Lankan model which will generate 300 kilowatts, which was developed and patented by Dr. Walpita and De Saram.

Delgoda is the second plant built by Zyrex. A 127 million rupee power station is already in operation at Rakwana generating 800 kilowatts, having been completed in 1998. But here too, the CEB is paying merely for the cost of maintenance.

"If the CEB would pay us at least one rupee more per unit cost, then there would be so many more private sector investors participating in power generation, and much of the country’s electricity problems would vanish," said Dr. Walpita.

He pointed out that mini-hydro development is actually more beneficial to the country, since most of the small rivers are in far off regions where there is no electricity, and each mini-hydro project leads to the development of a new area.

Bringing electricity to any area, naturally leads to development of roads and other infrastructure, bringing investment and uplifting the area’s economy.

"Construction of a mini-hydro power station also brings employment to a large number of people," noted Mrs. Wanniarachchi.

Private companies also usually help surrounding communities by building bridges, roads and helping construct schools and other community buildings.

"We build a mini-hydro power plant in 18-20 months, which is several times faster than large power stations," said Dr. Walpita. Zyrex is investing 1.2 billion rupees in five mini hydro projects over the next three years.

So far, 15 private companies have begun constructing mini-hydros, and have even banded together to co-operate with each other as the Grid Connected Small Power Developers’ Association (GCSPDA). These companies are getting assistance from a number of countries, including Norway, Canada, Japan, and China.

Zyrex officials claimed that mini-hydros have minimum impact on the environment, and that getting environmental clearances takes much longer than the time it takes them to build a power station. But the Centra1 Environmental Authority’s Director of Natural Resources Management, W. A. D. D. Wijesuriya, said that the environmental safeguards are necessary to prevent problems such as soil erosion into the rivers from the construction, and said the correct procedures need to be followed.

L E G A L W A T C H
Devolved dictatorship or democratic integration? -Part II

by Nayana
Continued from last week
Mr. H. L. de Silva, P.C., delivering the Bandaranaike Memorial Lecture last year in which he discussed "constitutional alternatives", expressed concern that federalism involving a demarcation based on ethnic lines would lead to the creation of ethnic enclaves. These in turn would provide the driving force for secessionist movements, especially if there was no counter-balancing mechanism towards integration and cooperation. He cited Yugoslavia, Czechoslovakia and the former Soviet Union as examples.

He also quoted Eric Nordlinger ("Conflict Regulation in Divided Societies") who said: "Federalism may actually contribute to a conflict’s exacerbation and the failure of conflict regulation. In some deeply divided societies it is impossible to draw state boundaries without including a large number of individuals belonging to segments whose territorial base is elsewhere. Federalism thus allows or encourages the dominant segment in any one state to ignore or negate the demands of the minority segment... Moreover, territorial isolation increases the probability of the most violent form of strife - civil war. The strong identification of one segment and its values with the territory it inhabits may readily produce demands for some form of semi-autonomy, and its concentration and power within the territory heightens the readiness of both leaders and followers to escalate demands, if their original ones are not met."

In addition to balancing devolution with national integration, it is also necessary to determine the balance to be struck between the requirements of regional autonomy and the protection of individuals. In this context the still unresolved question of the "unit of devolution" assumes vital importance. This terminology is in fact a euphemism for the question of whether the political leaders representing the majority community of the North-East will be prepared to tolerate the presence of members of other communities within their region.

The fact that the Sri Lankan Government is willing even to countenance the idea of removing predominantly Sinhala and Muslim areas out of the "North-East Region" shows how little commitment there is on the part of those currently shaping our national destiny for the true principles underlying a pluralistic society.

It also takes no account of the economic needs of groups such as migrant fishermen, or the constitutional right of all citizens to freedom of movement and the right of choose their residence within Sri Lanka, as well as to engage in any lawful occupation, trade or profession.

Finally, such a policy begs the question: Where does one draw the line? The Eastern Province is not the only Province that contains population pockets belonging to different ethnic groups. Already there have been allegations of attempts to divide the administration of the Nuwara Eliya District along ethnic lines, by the creation of eight AGA divisions where formerly there were five, and the creation from 1 August of two Police divisions where formerly there was one.

On the other hand, one must also be sensitive to the language issue, and the constitutional right given to every citizen to receive communications from, and transact business with, any official in either of the two national languages. In addition, local authorities of the Northern and Eastern Provinces are given the right to communicate with officials elsewhere in the country in Tamil.

Wherever these rights are not presently available, the situation should be rectified as a matter of urgency. One cannot help wondering, for instance, whether the cause of national integration might have been better served if the money spent on the famous "Thavalama" campaign to promote the Government’s devolution proposals had instead been spent on measures to ensure the implementation of the language rights of all citizens.

Failure to ensure language rights not only tends to alienate ordinary citizens but also fuels the demands of separatist politicians for territorial re-adjustments. Mr. Thondaman’s demand for the administrative re-demarcation of the Nuwara Eliya District was ostensibly based on this ground.

It is remarkable that despite language rights being enforceable in the same way as fundamental rights under Article 126 of the Constitution, the very groups that complain of language rights violations of the Tamil speaking people have never thought fit to seek redress from the Supreme Court. Of course, any demonstration that the Tamil people can redress their grievances within the framework of the present Constitution would undermine the case for greater devolution.

Recent experience of the Provincial Council system has also demonstrated that the devolution of power does not necessarily bring government closer to the people but only adds to the cost of governance. The massive increase in the number of persons holding political office has not only resulted in more money being required for the payment of salaries, purchase of vehicles and office expenditure, but also greater demands on the over-stretched manpower of the Police and a proliferation of firearms which are brandished with gay abandon at election time.

This column has repeatedly made the point that devolution of power is not an end in itself but is only useful if it is carried out in a manner that improves the quality of life of the people. Experience has demonstrated that constitutional experiments carried out against a background of civil strife or endemic abuse of power by the State do not achieve this result.

Both the District Development Council system and the Provincial Council system failed to take hold in the North and East because the ground conditions in which they were put into operation- civil strife, State terror, a foreign army of occupation, interference with the electoral process — did not allow for their proper functioning or acceptance by the people.

That is why it is important that any constitutional changes should only be implemented in peaceful conditions where democratic institutions can be given a fair chance to operate. It is also necessary that legal and institutional safeguards against abuse of the electoral process should first be put in place before any attempt is made to set up new elected bodies in the North. (Imagine Wayamba 99 with the type of weaponry currently in circulation in the North!)

The priority of the people in the war tom areas is not the package, it is a return to peace and normalcy and some democratic space in which they can start to rebuild their shattered communities.

This was demonstrated in 1997 when over 50 per cent of the people in the Jaffna peninsula defied the LTTE and voted in local government elections. As it fumed out, even that exercise was premature, and the lives of some true men and women of peace were sacrificed because the forces inimical to democracy in the North had not yet been neutralized.

The scholars and writers of India have recognized this reality somewhat better than their counterparts in this country. In the recent message of condolence on the death of Dr. Neelan Tiruchelvam, signed by over 25 such eminent persons who described the killing as having been "conducted in a manner characteristic of the LTTE", they went on to say this:

Eminent Indians slate LTTE

"Neelan was eliminated by forces of extreme intolerance because they cannot coexist with democracy, reason and human values. His death only underscores the importance of fighting such forces in our entire region and of reaffirming our commitment to what Neelan stood for."

The Week that was
Channel Nine issue
No officials available for investigations — Bribery Commissioners

by Shan Wijetunga
President, Chandrika Bandaranaike Kumaratunga after attending the Convocation ceremony of the Sri Jayewardenapura University held at the BMICH Colombo, Friday before last visited to the residence of the late Dr. Tiruchelvam, and spent a long time speaking to the wife and family members of Dr. Tiruchelvam.

Prof. Peiris who was away in Bangladesh when Dr. Tiruchelvam was assassinated cut short his stay and returned to Sri Lanka to pay his last respects to Dr. Tiruchelvam.

While Minister Peiris was at the residence of Dr. Tiruchelvam, he met TULF MPs there, Minister Peiris told them the highest honour they could pay Dr. Tiruchelvam was for them to support the government’s efforts to bring the amendments to the constitution to parliament.

Minister Peiris also met Saumyamoorthy Thondaman, leader of the Ceylon Workers’ Congress and P. P. Devaraj at ‘Visumpaya’ and hold lengthy discussions on the latest developments in the constitutional reforms.

The government has now taken all measures to bring the amendments to the constitution before the SLFPs central committee for its approval before presenting it to Parliament.

Meanwhile Leader of the Opposition, Ranil Wickremasinghe intends to bring in two alternative proposals to the executive presidential system. He revealed these proposals at a news conference held at Siyambalanduwa, Mahawa in Kurunegala.

The first proposal is that the President should have no authority over parliament and that he would not be above the law.

The second alternative is that the executive president elected by a poll would be the prime minister in parliament.

Last Monday, Gamini Atukorale, General Secretary, UNP briefed party leader, Ranil Wickremasinghe on the latest development on the Channel Nine issue. He gathered from the members of the commission probing bribery and corruptions when he went there to make a complaint and recommended the holding of a satyagraha campaign to revive the commission probing bribery and corruptions.

Ranil Wickremasinghe agreeing wanted the satyagraha to be continued for two days.

Parliamentary Group meeting

Government back benches were disappointed that the government parliamentary group was not summoned for them to have clarifications over certain controversial issues dealing with the Paddy Marketing Board.

The UNP Parliamentary Group met on Monday afternoon at the Parliamentary complex and after the usual discussion on Parliamentary debates during the week, Dr. Karunasena Kodithuwakku raised the issue of the envisaged 1500 housing project at Athurugiriya called ‘Millennium City’.

He said; "We have nothing whatsover againse building houses. But the question is on the privileges granted to this project. 180 acres of land from Athurugiriya have been allocated to this project. The normal price of land around this area is about Rupees 25,000 per perch. But the amount spent on this project is Rs. 9000 per perch.

According to information available there are lands vested in the Steel Corporation. All materials brought to put up this project is free of all taxes. Not even GST. But our point is are these tax concessions granted to ordinary people building houses?" he asked.

Later when the members discussed the Media law Reforms Bill Ranil Wickremasinghe informed them that a parliamentary standing committee had been appointed to report on the bill.

He also pointed out that as all leaders of political parties in parliament had signed the proposed bill it had to be taken up for discussion on Friday.

He further said that he would discuss the matter with the Speaker, Mr. K. B. Ratnayake and take action to debate the bill as envisaged.

A vote of condolence was passed thereafter on the death of Dr. Neelan Tiruchelvam and to inform the family of Dr. Tiruchelvam and the TULF accordingly.

Tyronne Fernando inquired regarding the complaint made to the Internation Parliamentary Society regarding the assault on their party members at the demonstration rally demanding the abolition of the executive presidency. He was informed that a reply had been received and the question would be pursued by Messrs. Nanda Mathew and Sunil Santha Ranaweera at the next sessions of the International Parliamentary Society.

After, discussing corruption in the Colombo Port, Petroleum Corporation, the quota system in garment productions, the Leader of Opposition informed that when Gamini Athukorale went to the commission probing bribery and corruption to make a complaint on the Channel Nine issue the Commissioners had informed him that there were no officials to carry out investigations on the complaint.

Media reforms bill

After the meeting Ranil contacted the speaker K. B. Ratnayake over the phone and inquired regarding the media reforms bill to be taken up in the Parliament on Friday. Speaker, Ratnayake informed Ranil that a final decision on the bill would be taken at a meeting of party leaders to be held the next day.

Punchi Nilame

Ranil Wickramasinghe and Gamini Athukorale thereafter proceeded to ‘Siri Kotha’ to attend the working committee meeting of the party.

After discussing the programme to implement the membership enrolment drive and the re-organisation of the party within the next two months the committee discussed the suspension of the memberships of MP, Susantha Punchi Nilame and former Ratnapura Mayor, Mahinda Ratnatilake.

According to the recommendations of the sub committee that dealt with reconsidering the memberships of Punchi Nilame and Ratnatilake there were no objections to re-establish their memberships.

However, the party leader advised them to desist from participating in any party demonstrations or Satyagraha campaigns.

Prof. Stanley Kalpage questioned Ranil Wickramasinghe on the party’s stand on the package. Swaminathan backed Prof. Kalpage stating that the Tamil people wanted to know the party’s stand on the package.

Ranil stated that the party had revealed its stand on the package even in respect of issues such as land alienation and decentralization of power.

Speaking regarding the transfer of government agents in Mullaitivu and Kilinochchi, Charitha Ratwatte said that it had been done in order to replace them with certain army personnel who were stooges of the government so as to gain votes in case of an election.

Ranil informed Gamini Athukorale to lodge a protest with the Commissioner of Elections in connection with these transfers.

Satyagraha

The opposition leader summoned the UNP, MPs of Colombo, Kalutara and Gampaha district to his office on last Tuesday morning to discuss the organisation of the Satyagraha to be held in front of the building housing the Commission probing bribery and corruption. Associated with the leader of the Opposition were Gamini Athukorale, P. Dayaratne and Dharmadasa Banda. It was decided to hold a Satyagraha continuously for 48 hours.

Party leaders meeting

The leader of the Opposition accompanied by W. J. M. Loku Bandara and Tyronne Fernando attended the party leaders meeting.

Ministers Ratnasiri Wickramanayake, Richard Pathirana, Jeyaraj Fernandopulle MPs Joseph Pararajasingham. S. Sampanthan and D. Sidharthan also attended.

When the Speaker questioned Ranil Wickramasinghe whether the media law reforms bill is to be taken up in parliament or postponed. Ranil replied that he did not wish the debate to be postponed. Jayaraj Fernandopulle pointed out to the speaker that certain cases have been filed in courts with regard to this bill and therefore it was subjudice and could not be debated in Parliament. It was therefore decided to seek the advice of the Attorney General and postpone the debate for October 08.

The party leaders meeting passed a vote of condolence on the death of Dr. Neelan Tiruchelvam in Parliament when it met on Friday 06.

Peoples Alliance government completes five years on the August 19th.

A procession and a rally of over 500,000 have been planned to be held on this day.

Cabinet meeting

The cabinet met on Wednesday night at Temple Trees chaired by the President.

The committee appointed to organise the celebration of the 5th anniversary of the government led by minister Ratwatte informed the cabinet of the action that taken was to organise the celebration.

Minister Nimal Siripala de Silva submitted his proposal regarding providing appointments to doctors who had completed their internships. After lengthy discussions the Cabinet decided to give these doctors permanent appointments.

Singapore — a modern competitive economy

by Dr. Stanley Kalpage
In 1997, the World Economic Forum in Geneva ranked Singapore as the world’s most competitive economy. Singapore is a small island, 639 sq. km in extent, and one of the most densely populated countries in the world, with a population per sq. km of 5476. Its GDP per capita, close to that of the US, is in the region of US$ 27,480. The services sector contributes 64 percent to the GDP.

In the quest to build a modern nation, Singapore’s leaders sought to unify the diverse cultures within its boundary with the vision of a single identity. "One People, One Nation, One Singapore" was the theme of the twenty-fifth anniversary in 1990. But Singapore officials now speak of a mosaic of cultures, a successful blend of immigrant peoples and ‘shared values’.

A growing number of leaders in Asia and elsewhere would like to emulate Singapore. For example, Tung Chee Hwa, the new Chief Executive of Hong Kong, has expressed his open admiration for Lee’s Singapore. Mainland China, too, looks upon the island state as a model. Even one of Asia’s former colonial powers, Britain sought to learn from Singapore’s experience. Prime Minister Tony Blair dispatched a team to study Singapore’s Central Provident Fund, a national retirement and savings scheme.

In recent interview’s with Asia Week and the Far Eastern Economic Review, both Senior Minister, Lee Kwan Yew and his eldest son, Deputy Prime Minister Lee Hsieng Loong, expressed their views on what makes Singapore tick and explained the constant striving for high standards in the small island state so as to maintain a competitive edge.

Senior Minister Lee Kwan Yew

The foundation for Singapore’s astonishing economic success was laid by her first prime minister and now Senior Minister, Lee Kwan Yew (75). After his remarkable achievement in making Singapore a model for economic development and while still in his prime, Lee Kwan Yew made way for his successor Goh Chok Tong by resigning from the premiership nearly ten years ago. Instead of taking a well-earned retirement and fading from public life, the senior Lee has maintained an active interest in the affairs of Singapore and frequently expresses himself forcefully on his perceptions of how the world is moving.

In a recent wide-ranging interview with Asiaweek Lee Kuan Yew, Asia’s senior statesman, was occasionally unsure about what the next millennium would bring. But he was certain in his vision of a bipolar Pacific (dominated by China and the US-plus-Japan), a more democratic China, an economically integrated ASEAN and continued People’s Action Party (PAP) power in Singapore.

Lee Kwan Yew stressed that this relationship among the three big Pacific powers should have as its main emphasis economic development and co-operation rather than competition for political influence or, as the Chinese would call it, ‘hegemony’. He said that at present the three governments — China, Japan and the US — are working together on the right track.

ASEAN

Lee Kwan yew says that there is no great ideological divide among the ASEAN countries. Communist ideology is gone and the countries are in varying degrees of democracy or of authoritarianism. Every country wants economic and social progress. After the severe financial and economic setback, no country has got time for ideological or expansionist issues.

In ASEAN, there is room for more trade and investment but a common currency would be rather difficult. The newer members — Vietnam, Cambodia, Laos and Myanmar — would take at least three or four years to be fully integrated. There should be no attempt by the older members, says Lee, to impose the speed and pattern of their growth on the new members. Being ASEAN’s smallest members, Singapore ‘responds robustly’ to neighbours like Malaysia. "We have to stand our ground, or our rights will be rolled over." However, Singaporeans don’t pick quarrels.

The economic meltdown

When the economic melt-down took place in July 1977, every Asian leader was in a state of disarray. All governments are in varying degrees of disbelief at what has happened, the suddenness of the devastation. Without a bomb being dropped, currencies were trivialised, asset values, shares and properties collapsed, sound companies went bankrupt and banks were imperilled.

Says Lee "It is a time for stocktaking and restructuring, a painful regaining of control over our economic systems and getting back into growth. It will take between two to five years, more in some cases. But we’ll recover. If the Dow (the Dow Jones Industrial Average) does not have a hard landing, Singapore should get back to growth in 2000 or 2001."

BG Lee

Deputy Prime Minister, Lee Hsien Loong, eldest son of Senior Minister Lee Kwan Yew, popularly known as BG Lee because he is a brigadier general in Singapore’s armed forces, is already being considered to be the ruling PAP choice as the next prime minister.

In fact, Singapore’s Prime Minister Goh Chok Tong has said that his main task between now and the next election, due in 2002, is to put in place a suitable team to take over the government. And BG Lee, in a recent interview with the Far Eastern Economic Review says, carefully, that he is ready. "If the MPs have confidence and the electorate supports it, I will "give it a good try." Politics in Singapore is fairly predictable and continues to be much dominated by the PAP which will decide who the next prime minister would be.

But Lee’s promotion is not imminent. Goh himself has said that he will contest the next election. And Lee says that "the team" is working well — with Goh as prime minister and with help from himself and Senior Minister Lee Kwan Yew.

BG Lee’s meteoric rise and sudden adversity

The younger Lee entered politics in 1984 at the age of 32 and was appointed an year later to the important Ministry of Trade and Industry. At age 38 he was appointed Deputy Prime Minister and was widely expected to succeed Goh Chok Tong.

In 1992 he was diagnosed as suffering from lymphoma — cancer of the lymph nodes — and underwent chemotherapy. However he did not stay away from his public duties. Lee spoke openly about the serious ailment afflicting him. This became a great public relations coup and helped to scotch the wild rumours in circulation about his condition. Since then he has matured and is said to be kinder and less prickly.

Yet, Lee can be very tough. Defending the lawsuits that government ministers, including himself, have lodged against opposition politicians, he says: "I think it generates the right type of

debate that we want to encourage. We want politics to have a certain tone, a certain dignity, certain integrity and uprightness."

Skilled economic manager

In the Far Eastern Economic Review interview, on the second anniversary of the Asian economic crisis, the younger Lee listed several factors which he thought contributed to the crisis, from very fundamental flaws, basic weaknesses in the economies, to transient panic in the financial markets. Lee spoke of the boom before the crisis started and admitted that there were excesses both in the real economy and in the financial sector. He said: "But now we have to focus on fixing things. Money is starting to flow back.... Confidence and balance are beginning to return."

BG Lee has the reputation of being a skilled economic manager. In the past two years, during the economic downturn, he displayed a pragmatic approach and led a widely hailed liberalisation of Singapore’s financial industry that, more than any other activity, bears his personal stamp. This gives an indication of his approach, his intellectual ability and his political muscle to introduce and steer through serious changes.

Relations with neighbours

BG Lee says that Singapore has made much investment in Asia and, as the region boomed economically, Singapore also prospered. But Singapore has also maintained global connections. About one quarter of Singapore’s trade is with Asia, the remaining three-fourths with the rest of the world.

Singapore’s manufacturing is more globally oriented than that of its neighbours. Multinational Corporations (MNCS) produce in Singapore but export around the world. The country is not just making disk drives for Malaysia and Indonesia but is a major global producer, producing nearly one half of the world output.

While there is no possibility of a re-amalgamation of Singapore and Malaysia for the moment, Lee says that Singapore and Malaysia have complementary strengths. There is, for example, no need for Malaysia to build a bigger Port Kelang, when Singapore is only two and a half hours away by truck.

Looking towards the future, Lee tries to see what comparative advantage Singapore could have in manufacturing. He says that this would have to be human-created. Therefore, "Singapore should work towards creating, first, a quality work force, trained and educated and with the right mind set and discipline to do demanding, precise work — to work in an environment where high group performance is at a premium.

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