Tuesday, May 02, 2006

Singapore, Clipper ships and Boeing 777s

[by Stefan, this week in Singapore and Malaysia and reading Carl Trocki’s latest book, “Singapore: Wealth, power and the culture of control”]

The founding of Singapore in 1819 presaged an era of dramatically increased trade. Singapore served as a secure trans-shipment point for all goods traveling between China and India. British ‘country traders’ established themselves in Singapore and were initially only involved in forwarding goods (primarily opium and tea) onward to China and India.

However the efficiency of their square rigs surpassed that of Chinese junks and gradually the country traders ended up also controlling the regional trade of locally produced goods between the Malay peninsula, Siam, Vietnam and China.

But continued advances in sailing technology meant that by the late 1830’s the role of Singapore-based country traders in trade between India and China was marginalized by the advent of fast clipper ships that could bypass Singapore entirely. Singapore-based country traders resorted to further involvement in regional trade. They not only transported the produce of plantations and mines but also imported the opium that a majority of these indentured laborers smoked on a daily basis (many presumably addicted).

While initially virtually all of the produce from Singapore and the Malay peninsula went to China, over time traders succeeded in creating a European market for gambier, spices and tin. The growth in exports from the hinterland (as well as in-bound supplies to meet the booming population) secured Singapore’s position as a flourishing port in spite of the loss of the valuable trade between China and India.

I’ve been thinking of how these clipper ships, carrying the most valuable cargo between India and China, were able to bypass Singapore entirely, much as the future versions of the Boeing 777 may be able to fly non-stop between Australia and Europe or any point in North America.

Of course the loss of these flights will be relatively insignificant compared to the loss of trade with the long distance clipper ships in the early 19th century. But it does speak of a repeating trend, seen first during the colonial era and seemingly again over the last 30 years in independent Singapore: the need for leading Singapore merchants (and today GLCs) to attain control of enterprises in the hinterland (Indonesia, Malaysia, Thailand, etc.) as a counterbalance to continued threats to Singapore’s position as a long distance stopping-off point.

However, I suspect that if Singapore’s GLCs wish to attain anything close to the type of influence that Singapore’s leading 19th century merchants had over enterprises in the hinterlands they are going to have to make many more acquisitions, push ahead on ASEAN integration and perhaps finesse their diplomatic skills a bit. What do you think?


Dave and Stefan said...

Stefan, this is your ol' buddy Dave. Very interesting and provocative comments. Many people think that in the age of the global IP address, that older geographic notions of 'nodality' and being on global conduits of goods, services and information is obsolete. But as you rightly point out, physical presence on global land, sea and air routes is still as important in the 21st century as it was in the 19th for not only consumer or industrial goods but also energy, now more than ever a scarce commodity.

What are the big nodes of the 21st century going to be? Clearly China is important, but how can Singapore benefit given its geographic disadvantages of lack of proximity to the world's factory? Obviously, as you say, serving as a conduit between archipelagic Southeast Asia and its northern hegemon. Perhaps less obviously, serving as a Sino-friendly fulcrum between China and India. Singapore needs to make itself useful to China in these areas, and to do this they need at once to find ways of defusing historic enmities to develop a leadership position in these countries.

The racial tensions between the Chinese of Singapore and their so-called 'bumi' neighbors of Malaysia and Indonesia are a relic of 19th and early 20th century colonialism. Even these countries, though, will undoubtedly experience a paradigm shift coming in the 21st century as 'Chinese' become less a clear and present threat to their national and political hegemony, and more of an opportunity economically at every level of society. From supply of raw materials to tourism, from marketing and logistics support to manufacturing, China on its present course stands to make a profound impact on both Malaysian and Indonesian society in terms of the means and the end output of production.

There are still definite conflicts raised by the extension of Chinese control of resources in these countries beyond the legislative control of their 'bumi' political leaders. But there is also an opportunity for Singaporeans to recast these old, adversarial relationships in a more positive, constructive and collaborative manner. In fact, it is imperative that they do so before Chinese companies do it for them, and realize a future without a Singaporean middleman.

Alan said...

Similar changes in sailing technology shifted the Spice Route from the Isthums of Kra to Srvijaya and then from Srivijaya to Singhasari.