Our national airline no longer stops over there but New Zealanders should.

 

Listener: 11 May, 2013

 

Keywords: Political Economy & History;

 

The fall of Singapore in February 1942 signalled the end of the British Empire. It was not just that an Asian power had conquered one of its key outposts. Japan’s success demonstrated that the UK did not have the resources to defend all its imperial interests – it was the economic might of the United States that settled World War II.

 

New Zealand was shocked, for Singapore had been seen as fundamental to its external defence. As the UK slowly withdrew from “east of Suez” in the 1950s and 1960s, New Zealand and Australia maintained a military role in the region; the New Zealand battalion did not withdraw from Singapore until 1989. The relationship changed. For many New Zealanders, Singapore became a stopover on the way to Britain.

 

Air New Zealand no longer flies to Singapore. Its Asian hub is Hong Kong, reflecting our increasing interest in China. But we cannot abandon Singapore at the centre of Southeast Asia. It hosts Apec, an influential grouping of 21 countries that seeks to promote free trade and economic co-operation throughout the Asia-Pacific region. Less than an hour by air to the north is Malaysia’s capital, Kuala Lumpur, which is becoming the international centre of Islamic

finance.

 

A little further to the southeast is Jakarta, the capital of Indonesia and home of Asean, the Association of Southeast Asian Nations, which began as a forum to promote regional stability and is now also committed to economic integration. None of the 10 Asean capitals is further from Singapore than New Zealand is from Australia. Many are as close as or closer to Australia than we are.

 

About a seventh of our exports of goods, half of which are dairy products, go to Asean countries, mainly Indonesia, Malaysia, the Philippines, Singapore and Thailand. A sixth of our imports come from them, almost half of which is oil, and we sell services to Asean members such as tourism and teaching of international students. Brunei, Cambodia, Laos, Burma and Vietnam make up the remainder of Asean’s membership.

 

The island of Singapore is seen as an economic miracle. Its economy has been transformed since independence in 1965, when many citizens were still living in primitive housing. Today, Singapore’s five million people mostly live in apartments in an area the size of Great Barrier Island (population 850).

 

Although the pragmatism of Singapore’s Government should not be underrated, the three keys to its success have been location, location, location. It is the prime port on the Strait of Malacca, through which about a quarter of the world’s traded goods pass, providing a range of related services such as ship repairs, provisioning, oil refining and goods consolidation. An Indian businessman told me he sent his containers to Singapore for trans-shipment to East Asia, the Pacific and the western seaboards of the Americas.

 

International boundaries can mislead. An important part of Singapore’s economic activity is centred on Johor Bahru, Malaysia’s second city of two million people, which is across the causeway connecting the island to the mainland. In Indonesia, 45 minutes by boat across the strait, another million live in Batam, which has competitive (and complementary) port facilities. This illustrates the point that economic boundaries do not always conform to jurisdictional boundaries, one of the pressures for the abandonment of artificial barriers to trade.

 

Southeast Asia’s international boundaries are very recent. When the Portuguese arrived 500 years ago, there were no nation states. Today’s nations are largely postwar creations and many have had their boundaries contested since. In March, for instance, the Sultan of Sulu, from the southern Philippines, launched a military incursion in the Malaysian state of Sabah. It was to discourage such instability that Asean was established. Its increasing emphasis on economic relations is a reminder to members that trade is an alternative to war.

 

But we are not in Asean’s region just for the trade. Australia is virtually a Southeast Asian nation. Given its importance in our destiny, so almost are we.

 

This is the first of a series of columns on Southeast Asia made possible by a travel grant from the Asia New Zealand Foundation.