Singapore Shortlists 14 Casino Operators

Singapore has something of a stuffy image. It is best known in America as the place that caned that kid several years ago for painting graffiti on a wall. And as a place where one cannot buy chewing gum. The city-state is trying to change that by bringing in casino gambling. It shortlisted 14 of 16 operators that had bid for permission to work the island. The reason for the sudden burst of adult fun is simple -- as a developed nation, it can't compete with its neighbors in more traditional areas of the economy.

The Singaporean government plans on using the casinos as the focus of two resorts. In addition to gambling, the government wants amusement parks, museums, hotels big enough for 2,000 guests, convention centers and, of course, shopping. If the plans work out, the resorts will mean 35,000 jobs. With a population of around 4.4 million, that is a noticeable figure.

With an economy of $110 billion, Singapore is a developed nation by any measure. It is on a par with Ireland in terms of population and GDP, although it has far less territory. And in Singapore's neighborhood, that means it can't compete in many industries. There are nations nearby with millions of people prepared to work for very low wages, and capital will flow to them in time. For Singapore, the question is not how to compete but rather what is its comparative advantage? Tourism, supported by gambling in part, offers an answer.

Whether the Chinese really are the inveterate gamblers non-Chinese have made out is not as important as the fact that there are 1.1 billion Chinese, some of whom are getting pretty wealth, and some of those must like to place a bet now and then. India is not far from Singapore (compared with Las Vegas), and it has a similar story of increasing wealth. Not only will new markets open for Singapore, but the experts think it will bring in gamblers from less lovely places like Cambodia.

There is nothing visionary about the government's move here. Singapore is a small rich country that can't beat the local up-and-coming countries at its traditional industries. While it could well hold onto finance, but manufacturing (which makes up 18% of the economy) will move off-shore. By embracing the inevitable, Singapore is positioning itself for the future. Lessons for Detroit abound.


© Copyright 2005 by The Kensington Review, J. Myhre, Editor. No part of this publication may be reproduced without written consent.
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