The Western Australian government says the move to go with Singapore as its key trade office in the Asean region is due to the direct links to the island republic's prime minister and ministers. – Reuters file pic, August 11, 2015.The Australian roadshow "Singapore's key place in the Asian growth story" hit Perth, the West Australian (WA) capital and Indian Ocean gateway to Southeast Asia, last month after playing out in the Pacific-centred eastern seaboard capitals such as Melbourne and Sydney.
Coming at a time when mineral resource-rich Western Australia is feeling the effects of an economic slowdown at the end of an investment boom, the roadshow brought much cheer and hope that the state could look to a strategic partnership with Singapore to make the most of the growth opportunities presented by the Asean Economic Community of 600 million people that will become a reality at the end of this year.
However, the roadshow – hosted by the think-tank Perth USAsia Centre and financial consultants Ernst & Young and starring Australian High Commissioner to Singapore Philip Green, Austrade Senior Trade Commissioner Christopher Rees and former Australian foreign affairs and defence minister Stephen Smith – left lingering doubts about the WA government's wisdom in closing its Malaysian trade office in favour of a Singapore presence three years ago.
"Business and investment ties between WA and Singapore are keys to building our state's participation in the growth of Asean region economies," WA prime minister Colin Barnett said in March 2012 after closing the Malaysian office and announcing the opening of the Singapore office.
"Singapore is a major regional corporate and financial centre and a trade transport hub strategically located with significant connections to Asia's growth economies, "Barnett said.
"The Singapore office will become our major overseas office in Southeast Asia and is part of the reorientation of WA towards Asia."
Last year, amid talk of the impending closure of WA's trade office in Indonesia, debate over the closure of the Malaysian office surfaced in the WA parliament, with state opposition leader Mark McGowan, berating the prime minister for closing the Malaysian office, which was opened in 1994.
In his response, Barnett told the WA parliament last October: "It is a different office with quite a different level of representation. In Singapore we have contact at the highest level – ministers and the prime minister himself – and we have two other voluntary or honorary representatives, including former senior ministers, in Singapore who help represent WA.
"We do not have the same level of connection in Jakarta that we have in Singapore, and that is what we are addressing. We may choose to embed someone within Austrade. We may choose to reappoint a new person, we may choose to expand it.
"However, the objective is to reach into the higher levels of government and business in Jakarta – something that I think everyone agrees is not being achieved under the current model."
While an expanded trade office with a new regional director was announced for Jakarta last June, there has been utter silence on an office in Kuala Lumpur, a founding member of Asean and a key driver of the Asean Economic Community.
No one is challenging the decision to open the Singapore office. Indeed, it is a welcome move, considering Singapore's position not only as a regional but a global corporate and financial hub. The office dovetails with the establishment last June of a comprehensive strategic partnership between Singapore and Australia.
Reputably, Singapore is on track to overtake Switzerland by the end of the decade as the world's No 1 private wealth manager. This undeniably gives WA the inside run to attract much-needed infrastructure investment.
Despite consensus in Asean, Singapore and Malaysia, however, are Siamese twins born apart and each country guards its interests amid intense rivalry.
Does Malaysia, which is being buffeted by governance headwinds but at the same time racing to overtake Singapore as the key source of foreign direct investment in Indonesia, deserve to be ditched?
If you ask Stephen Smith, the answer is an emphatic "no".
Smith is now Winthrop professor of law at the University of WA and wears many hats, including as director of the Perth USAsia Centre, Perth legal firm Lavan Legal and Ernst & Young. As foreign affairs minister, he was known for his bipartisan approach to international affairs.
As a member of the roadshow panel, he said the problem for WA was not the cyclical nature of its mineral and petroleum resources but the perception of the State in Singapore, Malaysia or Indonesia.
Take a potential Singapore investor who loves Perth, enjoys Margaret River and its wines, has family and property in Perth and has children educated in Perth. Yet, when he thinks of investing, he thinks of Sydney and Melbourne; he thinks population centres.
When Smith visited Kuala Lumpur wearing his Lavan Legal hat, he was told they preferred Melbourne and Sydney, mostly because of positive exposure to those cities.
"The Victorian trade minister was visiting KL," Smith said. "The Victorians had a trade commissioner in KL. They send their kids to Monash (university in Melbourne)." In those circumstances, why would they want to think Perth?
As Smith and some business people commented, unless WA interests "are physically in Malaysia or Indonesia, in their faces, telling our story, why would those countries, when they are developed in 20 years, want to think about investing in this state, they could go anywhere in the world".
Despite WA punching above its weight in resources, technology and brainpower and accounting for more than half of Australia's exports, its story is being lost to other Australian States as well as other countries which are positioning themselves well in the scramble to get a piece of the economic action in Southeast Asia. – August 11, 2015.
* PT Singam is a Perth-based journalist with a passion for regional affairs. He worked for Bernama and New Straits Times before moving to Australia 39 years ago.
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