Singapore: Global city, maritime cluster and cooperation with Chile

Chile's participation in the P-4 is promising but not yet fully materialized. The free trade agreement with New Zealand, Singapore and Brunei portends inclusion in the group’s steadily growing trade. In the case of Singapore, it seems to offer Chile investment opportunities and mutual cooperation in a variety of sectors. It is symptomatic that the treaty is known in Singapore under the more substantive title of Trans-Pacific SEP or Trans-Pacific Strategic Economic Partnership 1. If Chile and Singapore wish to fully capitalize on the SEP, we should increase exchange programs in order to gain a deeper understanding of the other side’s respective governments, private sector and civil society. 
  
With this context, this article stems from the author's observations during a stay in Singapore during February 2008 in which he had the opportunity to visit and tour the port, one of the world's largest container hubs, to talk with executives and to interact during activities involving people from the public sector, academia and international relations.

Global City, International Maritime Hub
 
Gaining its independence as a city-state in 1965 after its secession from the Federation of Malaya, Singapore is a small island that designed a new development strategy by during the late 1960s which somehow anticipated globalization in the midst of the Cold War.
 
It is not surprising that in a 1972 speech then-Foreign Minister S. Rajaratnam stated that a "global city" does not depend on its interior space for its immediate survival. Rather, he viewed Singapore as a global city which could best develop via its sea lanes, telecommunications and air routes to other global cities “like New York, London and Tokyo - moving freight from the regions where it abounds and is produced to where there is greater market demand.”  Thus, “the whole world becomes the interior space of a global city” and the fate of Singapore “will depend on its ability to establish a niche in the global economic system which is experiencing increasing expansion” 2. The figure of S. Rajaratnam, a man clearly ahead of his time, is still being analyzed as witnessed by the Institute of Southeast Asian Studies (ISEAS) exhibit: “The Man behind Singapore’s National Commitment.”

During the 1960s the Port of Singapore began operating in the "transhipment" of goods to and from Asia with the rest of the world.
 
Singapore’s mission of becoming "The World's Port of Call” began in 1969 when it began building the first container terminal which served as a hub of activity at the port in Tanjang Pagar. The World’s Port of Call challenge was met when it completed Terminal 1’s construction in 1972, at the beginning of the Container Age. The port still remains the largest container transhipment hub in the world.
 
The official policy of the Port – which currently operates on a computerized and mechanized basis - is to constantly experiment with new technologies and incorporate them into its operations.
 
During 2007 alone, 27.9 million TEUs were transferred through the Port of Singapore.

The port has also added shipbuilding to its portfolio of activities. It is an industry leader in ship conversions, design and adjustments due to the opening of the SEMBAWAND shipyards.  Other services, such as maritime financing, insurance, legal services, and an international arbitration center are also available in the port.

Singapore is home to more than 5,000 shipping companies and other businesses directly or indirectly involved in the maritime sector. This resulted in "cluster" services that accounting for 7.5% of GDP in 2005, not to mention 100,000 jobs (4.1% of total employment).
   

World-Class Network of Port Operations

The Port of Singapore, or PSA, has organized a global network of port projects. Beginning in the 1990s increased its expansion efforts to include various regions of the world, in which it manages port terminals.

The philosophy behind this policy is that a global presence allows them to maximize attention to their major customers, the shipping companies that transport the world’s production. They accomplish this via which multiple locations, efficiency and cost-effectiveness.
  
PSA currently, operates terminals in 27 ports in 16 countries: China, Japan, Korea, Singapore, Thailand, Vietnam, India, Pakistan, Belgium, Italy, Netherlands, Portugal, Turkey, United Kingdom and Panama; its most recent project being terminal in Buenos Aires. They are also interested in the west coast of South America.
 
To give an idea of the scale of operations, PSA is building in Vietnam, at the Saigon Port, that will have an annual capacity of 2,000,000 TEUs. Valparaiso had a record year in 2007, with 800,000 TEUs.
 
Additionally, the planned expansion of the Port of Valparaiso is well-known to PSA, as well as other international operators.

Challenges and Prospects for Cooperation
 
Lee Kuan Yew, Mentor Minister and founder of modern Singapore, emphasized Singapore’s maritime vocation, thereby placing these developments into a larger context:

“With the shift of the economic and maritime centre of gravity to Asia,

Asian countries have the opportunity and an increasing interest in assuming a bigger role in global maritime affairs at international forums. Asia will have to safeguard its maritime interests, and ensure that they are accommodated in the ongoing Western-driven development of a global framework of rules and standards governing international shipping.”3

In the case of Chile, there are several factors to consider. Increasing import and export shipping traffic and the port modernization project being under way, on the one hand and rising trade with Asia (40% of total exports), on the other, makes it imperative to strengthen trade ties and cooperation. This should occur with the highest volume of trade, such as China, Japan and Korea; but it should also include nations in Southeast Asia, such as Singapore. Singapore is a maritime, commercial, financial and high-tech hub. In this manner, Chile can deepen its understanding of policies and projects.
 

It is clear that the vibrant Singapore, which reached its 40-year goal of becoming a “global city”, presents a series of challenges and opportunities for increased trade that Chile is capable of capitalizing upon:
 
- The P-4’s Trans-Pacific Strategic Economic Partnership, which contains provisions for the relaxing of tariffs and other factors to ease trade, such as Rules of Origin. Provisions for services, investments and competition which serve to create a strategic partnership framework that truly facilitates trade;
 
- High-level diplomatic relations which promote cooperation;
 
- Similarities in the policies of both countries to favor international trade free from protectionist barriers;

- Singapore’s proportionally high-volume of direct investment from abroad, which is significant among emerging developing countries. Thus, in 2004, Singapore ranked first in foreign investment in proportion to the gross fixed capital formation, with Chile in fourth. 4
 
- The presence of both nations in APEC;