Singapore to invest up to 30 percent of capital reserves in Asia: Goh

Singapore to invest up to 30 percent of capital reserves in Asia: Goh

LONDON (AFP): Singapore, traditionally an investor in established capitalist economies, is targeting developing Asian nations for 20-30 percent of its reserve capital, Prime Minister Goh Chok Tong said here.

"There is a quiet economic revolution going on in Asia, a changed attitude toward foreign investors," he told a Singapore Forum of European and Asian businessmen on Tuesday.

He said Singapore would be looking to Vietnam, India and even Burma for regional investment opportunities, but primarily to China, to "bring good returns...a good, black bottom line."

"I believe China will continue with its economic reforms beyond the year 2000," he said.

"I believe there will be political stability. I know there is tremendous stress as China moves into a free market economy. There is high inflation...difficulty in controlling the provinces...a lack of macro-economic instruments," he said.

"But we are putting our money into China."

Vietnam, said Goh, was another prime target for new Singaporean investment.

"My sense is that Vietnam will follow in the footsteps of China," he said.

"Vietnam had a choice of two models to follow: the former Soviet Union, with its glasnost and multi-party elections, or China with its economic reforms and restructuring and its strong political and central control.

"It has chosen the Chinese model. It is moving cautiously and will study the impact of economic opening in China," said Goh.

He said he envisaged no stunning political reform in Vietnam in the next decade.

"The Vietnamese leaders are old. Maybe we will see new ones in 10 years, a more open-minded generation prone to economic reforms. My guess is that Vietnam will open slowly. I don't expect multi-party elections there in the next 10 years. There will be a slow development of stability.

Strategy

Singapore, too, would proceed slowly in its new regional investment strategy, mindful of swiftly changing political winds and their effect on economies, said Goh.

"We are moving cautiously into these areas," he said. "We are not putting all our eggs in any one basket. If we invest in five Asian countries and there is a political setback in one, it will be offset by the other four."

India, said Goh, "has begun to regulate its economy, not with the same fanfare or economic impact as China, but it is opening up. There is no choice for India. It has the potential to be a macro-economy. But it is no longer with the former Soviet Union and either it finds new trading partners or it will be left far behind."

To a complaint from a Singapore-based Italian businessman that automobiles in Singapore, particularly company cars, were outrageously expensive, Goh replied: "Singapore is a very small country. Unfortunately we do not have the space of Italy. So we had to decide whether we wanted to keep cars moving on the roads, or turn Singapore into one huge car park.

"If the economy continues to grow, cars will continue to be expensive. If the economy falls, cars will become cheaper."