"There i s such a history of strong control here that reducing it is di ffi cult, " says one Singapore-based analyst. "They are determined to mana ge the liberalization process. "
Competition may induce the government to relax. As much as they fear the idea of ​​a freewheeling financial sector, Singaporeans are more fearful of losing market share to regional ri vals. Indeed, now that Malaysia has declared its desire to make Kuala Lumpur a fund management center, Singapore is taki ng steps to boost its allure. The recently announced 1998 budget was notable mainly for tax breaks and other concessions directed at the investment community.
And even if the authorities refuse to loosen their grip, ci rcumstances may yet lift Singapore. Now that Hongkong is under Chinese rule, any misfortune that it suffers will clearly benefit Singapore. The city-state is the escape route of choice for nearly every major investment and commercial bank that presently makes Hongkong its Asian hub. Bob Mckee of Independent Strategy, the London-based research boutique, expects to see more than a few banks set up shop in Singapore over the next decade. "In our view, the decisive factor in Singapore's favor is that Hongkong is going to be taking a few steps back, "Mckee says." Hongkong eventually will be just one of many gateways to China. "
SINGAPURE AT A GLANCE
