Since coming to power in 1959, the People's Action Party (PAP) has ruled Singapore for an uninterrupted 62 years. Such is its dominance that electoral outcomes are mostly predictable, while the politics itself is efficient, brilliantly stage-managed and, for the most part, without drama.
“Singa-bore,” some like to call it, albeit happily. For political stability and efficient governance have served the South-East Asian city-state well, making it among the world’s wealthiest and most business-friendly countries.
But politics in recent months has been anything but boring, and much to the PAP's misfortune, bad things have come in threes. It started with the Covid-19 pandemic and was quickly followed by electoral setbacks, as the Workers' Party gained 10 seats in Parliament – a record for any opposition party in Singapore. Both of these developments culminated last week in Deputy Prime Minister Heng Swee Keat's announcement that he was stepping aside as the ruling party's leader-in-waiting.
Mr Heng cited his age as the primary reason for doing so. Originally due to succeed Lee Hsien Loong after the incumbent turns 70 in 2022, that goalpost was shifted indefinitely following the pandemic and the PAP’s relatively poor electoral performance (even though it won 83 of the 93 seats). Mr Lee said he will hand over the reins only once Singapore is “in good working order” again. At 60, Mr Heng said he would be much too old by the time he is ready to enter office.
In most countries, an announcement of this magnitude would animate the public for a few days. In Singapore, that could last much longer, given how intimately involved government is in people’s lives. For many, Singapore is PAP and PAP is Singapore. And what happens in the party matters, at some level, to all Singaporeans.
Mr Heng’s decision has so far not caused panic in the markets. But for a country that thrives on stability and predictability in all aspects of life, particularly in politics, it is a harbinger of uncertainty for the coming few months. In the long term, it could even presage dissent and divisions within an otherwise tightly knit party that takes leadership and succession-planning very seriously.
That stability and predictability have been the primary drivers behind Singapore’s success is entirely by design, as conceived by its founders.
Not long after he was sworn in as Singapore’s first prime minister in 1959, Lee Kuan Yew went about amassing power within the executive, thereby limiting the legislature and judiciary. He also restricted the press and passed laws making it nearly impossible for opposition parties to criticise the PAP, much less grow their movements. Even to this day, public demonstrations are almost non-existent.
Lee Hsien Loong has postponed stepping down as Singapore's Prime Minister. Bloomberg
It is easy to see why the founders prized stability and predictability over other considerations. The country is just over 700 square kilometres in size. It has no natural resources to speak of, save for its nearly 6 million people, who are divided along racial and religious lines but united by a national identity. Any hint of disunity can very quickly lead to disharmony on a small piece of real estate, LKY feared, as it indeed had in the early 1960s, leading to a series of race riots. Being surrounded by much larger and unfriendly neighbours at the time of independence was also a great source of insecurity.
Critics, particularly in the West, have scorned LKY’s command-and-control style of governance, but he and the effectively one-party system he bequeathed have nonetheless overseen a clean and efficient government, ushered in prosperity and helped foster peace, friendship and co-operation in the region.
Aside from delivering for the public, the PAP's longevity is also predicated upon its unique process of picking leaders.
LKY and his fellow first-generation leaders, or “1G”, mentored the 2G leadership group that was then tasked with picking the prime minister from among them – effectively choosing their “first among equals”. It still took five years of “apprenticeship” for that leader, Goh Chok Tong, to eventually succeed LKY in 1990. Mr Goh’s 2G group followed the same process to groom Mr Lee and his 3G team before the latter entered office in 2004.
The late Lee Kuan Yew was Singapore's prime minister for 31 years. AFP
After a painstaking process of identifying the next leader, the PAP now has to start over. But it isn't back to square one
In both instances, the task was smoothened by the fact that the choice of who should become prime minister was crystal clear to the leadership group, and the party rallied behind him. This practice seems to have hit a curb in Mr Heng’s case.
There are mitigating circumstances, of course. The pandemic is a once-in-a-generation crisis. Age, as Mr Heng himself pointed out, is also an undermining factor – particularly for someone who has suffered a stroke once before. LKY was 36, Mr Goh was 49 and Mr Lee was 52 when they took office.
Well documented, however, is the fact that the process to identify and mentor Mr Lee’s successor was fraught with delays. These were mostly caused due to a lack of experience among the 4G leadership group, as well as Mr Heng’s stroke in 2016. But despite having had a clear edge over his peers in terms of experience, administrative skills and a gentle demeanour that initially seemed to endear him to the public, he was not the clearest choice when he was officially unveiled as Mr Lee’s heir apparent in 2018. A younger but less relatable Chan Chun Sing, the country’s trade and industry minister, finished a close second. The question being asked then was whether the PAP would get squarely behind Mr Heng’s candidature.
Even though he may not admit it, the people’s vote seems to have paved the way for last week’s decision. Not only did the PAP emerge with fewer seats and a reduced vote share in the 2020 election, Mr Heng barely won his own constituency, sparking doubts about his electability and electoral leadership.
A voter casts his ballot at at the Chung Cheng High School polling centre in Singapore on Friday. Wearing masks and plastic gloves, Singaporeans began voting in a general election that is expected to return Prime Minister Lee Hsien Loong's long-governing party to power. AP Photo
Singapore's Prime Minister Lee Hsien Loong arrives at a People's Action Party branch office, as ballots are counted during the general election, in Singapore on Friday. Reuters
Opposition Worker's Party secretary-general Pritam Singh surrounded by members of the media during a campaign walkabout ahead of the general elections in Singapore last week. EPA
Pritam Singh, right, speaks to residents during his election campaign. EPA
Pritam Singh fist bumps a resident during his election campaign. EPA
Pritam Singh, who took over the party's reins from Low Thia Khiang, right, will be named opposition leader on the floor of Singapore's Parliament. EPA
A man with a child crosses a street in Singapore this week. Singapore's Prime Minister Lee Hsien Loong called a general election "like no other" last week as the city-state struggles to recover from the coronavirus outbreak. AFP
Raymond Lye and Ng Chee Meng of the People's Action Party (PAP) meet with residents during a walkabout ahead of the general election in Singapore on Sunday. Reuters
Ng Chee Meng of the PAP arrives for a walkabout ahead of the general election in Singapore on Sunday. Reuters
Heng Swee Keat of the PAP meets residents during a walkabout ahead of the general election in Singapore on Sunday. Reuters
Ng Chee Meng, Heng Swee Keat and Raymond Lye of the PAP speak to residents during a walkabout ahead of the general election in Singapore on Sunday. Reuters
Lee Hsien Yang, brother of Singapore's Prime Minister Lee Hsien Loong, centre, arrives with Tan Cheng Bock, right, of the opposition Progress Singapore Party (PSP) at the Tiong Bahru Market for an event ahead of elections in Singapore on Sunday. AFP
Tan Cheng Bock and Lee Hsien Yang of the PSP greet people during a walkabout ahead of the general election in Singapore on Sunday. Reuters
Lee Hsien Yang of the PSP greets a hawker during a walkabout ahead of the general election in Singapore on Sunday. Reuters
Lee Hsien Yang, right, chats with Tan Cheng Bock, left, at the Tiong Bahru Market in Singapore on Sunday. AFP
Lee Hsien Yang, left, shows his membership card after been given it by Tan Cheng Bock, right, of the PSP at the Tiong Bahru Market in Singapore on Sunday. AFP
Lee Hsien Yang, talks to the media after been presented a membership with opposition PSP at the Tiong Bahru Market in Singapore on Sunday. AFP
Lee Hsien Yang of the PSP greets people during a walkabout ahead of the general election in Singapore on Sunday. Reuters
A PSP volunteer hands out leaflets at a food centre ahead of the general election in Singapore on Sunday. Reuters
Lee Hsien Yang of the PSP attends a walkabout ahead of the general election in Singapore on Sunday. Reuters
After a painstaking process of identifying the next leader, the PAP now has to start over. The good news for it is that it isn’t back to square one. In the intervening years, Mr Heng’s peers, including Mr Chan, have acquired considerable experience, honed their political skills and buttressed Singapore from the pandemic’s worst aftershocks. The cupboard is also far from bare.
The bad news for it is that the world is in flux and so is Singapore's politics. Opposition parties, some that include disgruntled former PAP members, see an opportunity.
The question now is whether, in one or two years’ time, a clear leader will emerge – and if the party will get behind him or her. It is a multi-billion-dollar question, for Singapore's continued economic success will depend on it. A cabinet reshuffle, due in a couple of weeks, will throw up some clues.
Singapore has come a long way since the 19th and early 20th centuries, when it earned the moniker of “Sin-galore” due to its high crime rates and lawlessness. Much needs to happen for it to return to those bad old days. To the contrary, the country will continue to be a paradise of stability for years to come. But the next few months could determine whether, as unlikely as it seems, it can go back to being “Singa-bore” again.
Chitrabhanu Kadalayil is an assistant comment editor at The National
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
BUNDESLIGA FIXTURES
Saturday, May 16 (kick-offs UAE time)
Borussia Dortmund v Schalke (4.30pm)
RB Leipzig v Freiburg (4.30pm)
Hoffenheim v Hertha Berlin (4.30pm)
Fortuna Dusseldorf v Paderborn (4.30pm)
Augsburg v Wolfsburg (4.30pm)
Eintracht Frankfurt v Borussia Monchengladbach (7.30pm)
Sunday, May 17
Cologne v Mainz (4.30pm),
Union Berlin v Bayern Munich (7pm)
Monday, May 18
Werder Bremen v Bayer Leverkusen (9.30pm)
Other acts on the Jazz Garden bill
Sharrie Williams
The American singer is hugely respected in blues circles due to her passionate vocals and songwriting. Born and raised in Michigan, Williams began recording and touring as a teenage gospel singer. Her career took off with the blues band The Wiseguys. Such was the acclaim of their live shows that they toured throughout Europe and in Africa. As a solo artist, Williams has also collaborated with the likes of the late Dizzy Gillespie, Van Morrison and Mavis Staples. Lin Rountree
An accomplished smooth jazz artist who blends his chilled approach with R‘n’B. Trained at the Duke Ellington School of the Arts in Washington, DC, Rountree formed his own band in 2004. He has also recorded with the likes of Kem, Dwele and Conya Doss. He comes to Dubai on the back of his new single Pass The Groove, from his forthcoming 2018 album Stronger Still, which may follow his five previous solo albums in cracking the top 10 of the US jazz charts. Anita Williams
Dubai-based singer Anita Williams will open the night with a set of covers and swing, jazz and blues standards that made her an in-demand singer across the emirate. The Irish singer has been performing in Dubai since 2008 at venues such as MusicHall and Voda Bar. Her Jazz Garden appearance is career highlight as she will use the event to perform the original song Big Blue Eyes, the single from her debut solo album, due for release soon.
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
UAE: Thunder Snow/Saeed bin Suroor (trainer), North America/Satish Seemar, Drafted/Doug Watson, New Trails/Ahmad bin Harmash, Capezzano, Gronkowski, Axelrod, all trained by Salem bin Ghadayer
