How a country becomes rich; Emirates’ plan to be biggest airline by 2020; Failure of India’s isolationism

1 How a country becomes rich (Linda Yueh on BBC) How does a country become rich? Singapore is one of only a handful of countries to have managed it in the past half century. A colonial outpost now has the third highest average income in the world. How did it do it? And why are social tensions now showing? Singapore has more millionaires per capita than anywhere else in the world. One in six households are in the millionaire club.

They come to this city-state by design. The government offers low taxes, raising their revenues through a property tax on the expensive, multi-million dollar houses of the ultra-rich. In return the rich spend – boosting the local economy’s shops, restaurants and even a Universal Studios. A key reason that expats are attracted is the quality of life. Even middle class workers like teachers live well there ­- they can join sailing clubs and enjoy the services of a maid. It is a city-state with about five million people so the scale isn’t comparable to the challenges of a country.

That makes its ability to be a large manufacturer all the more surprising. An analogy would be if London or New York had large factories alongside an international financial centre. Manufacturing accounts for more than one-fifth of the economy, which is a larger share than in Britain and the US. But, how does a rich country remain integral to a cost-competitive global production chain? The answer is by producing at the high end: half of its exports are high tech goods. Singapore started at the low end of manufacturing but managed to upgrade its skills so that it didn’t fall out of the regional production chain as its incomes rose.

Plugging into global trade as a high income country requires high level skills – and that’s what the government has achieved by upgrading the skills of the workforce through investing in expanding higher education and training. Singapore has some of the top secondary schools in the world, and the government has recently targeted teaching design to imbue every profession such as engineering with some element of creativity. It helps to increase the skill base.

Singapore made itself an internationally oriented economy and that has largely paid off for its people. Cracks are showing in the orderly facade — but for most people, their working lives have benefitted.

2 Emirates’ plan to be biggest airline by 2020 (Khaleej Times) Emirates is expecting to become the largest airline in 2020 by international traffic, with a fleet of over 250 aircraft ferrying 70 million passengers. Emirates President Tim Clark said being the biggest airline was not the end goal. “Our aim has always been to connect travellers from around the world to Dubai and other destinations with just a single stop via our hub,” he said. Dubai’s strategic location helps Emirates to serve almost 90 per cent of the world’s population with non-stop flights.

Over a third of the world’s population lives within a four-hour flight from Dubai, and two-thirds are within an eight-hour flight. In addition to nearly 3,200 flights per week to 135 destinations in 76 countries, the airline this year starts services to Conakry in Guinea, Sialkot (Pakistan) and Kabul. The number of visitors at the Dubai International Airport has virtually doubled from 24.8 million in 2005 to 47.2 million in 2010. Last year, the airport handled 57 million passengers from 225 destinations, arriving on more than 140 airlines.

3 Failure of India’s isolationism (Daniel Twining in The Wall Street Journal) “When India and China shake hands, the world notices,” Indian Prime Minister Manmohan Singh said following his Oct. 22 summit meeting with Chinese Premier Li Keqiang. But what the world is noticing now is how far ahead of India China seems to be pulling in the race for primacy in Asia. China has encircled India through construction of port facilities along the Indian Ocean. Beijing boasts intimate military ties with India’s neighbors and has far surpassed New Delhi in securing access to energy resources in the developing world.

Despite talk of Sino-Indian cooperation to build a more “democratic” world order, China appears determined to be Asia’s dominant power. Beijing’s policy of blocking any UN Security Council reform that would elevate India (or Japan) to membership indicates it sees little room for power-sharing. If New Delhi is serious about balancing China’s rising influence, leaders need to get serious about doing so, and soon. Two major problems stand in their way.

First, India’s government has hampered the country’s ability to compete strategically by neglecting reforms that would allow it to grow economically. That makes for a stark contrast with China, whose economy is more than four times the size of India’s. China’s growth rate produces a “new India” every two years. Second, leaders in New Delhi need to adjust their thinking about India’s role in the world, and particularly the common notion that India can and should go it alone, eschewing strong alliances with like-minded partners.

India has lately been hedging against the United States, which it sees as an unreliable partner in managing the Asian balance of power. This is despite a decade of efforts to construct an Indo-US strategic partnership to meet the Chinese challenge. Underlying all of this is a breed of Indian exceptionalism that has a long pedigree, tracing back to Delhi’s nonalignment policy during the Cold War. Not taking sides was at least a plausible strategy then, when India was not a central participant in either camp. But it makes significantly less sense now that India itself is a contender in the two-man race with China.


About joesnewspicks

This blog captures interesting news items from around the world for those strained by information overload and yet need to stay updated on global events of significance. The news items displayed are not in order of merit. (The blog takes a weekly off — normally on Sundays — and does not appear when I am on vacation or busy.) I am a journalist for nearly three decades.
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