Monday, August 20, 2007
"How adventurous are you food-wise?"
K.C. Lee's Series 7 BMW slides through the taxicabs in Singapore's downtown traffic like a shark amid goldfish. Singapore's government limits the number of cars that can be sold in the country based on what feasibility studies say the roads can handle. Because of this, cars in Singapore typically cost two to three times what you'd pay in the U.S. So when someone picks you up in a Series 7, you better believe he's a heavy hitter…
"I'll try anything. What do you have in mind?" I said. He smiles. "We're heading to Little India."
K.C. is the CEO of Esmart, an electronics-design services provider publicly traded on the Singapore exchange with annual revenues of S$31 million (roughly $20 million U.S.). But he's also a serious investor, with investments in China, India, Singapore, and elsewhere.
K.C. is a Singapore native who's lived in Scotland, San Jose, Hong Kong, and other places. Many Singaporeans never live anywhere else. So when K.C. offered to show me around Singapore, I knew I was going to get a very worldly perspective on the country.
"Singapore is known for two things: caning and chewing gum," he laughed. "Everyone thinks it's some kind of police state. But I ask you, where are the police? Have you actually ever seen any?"
"No, I can't say I have."
"Precisely. No one I know has ever even met someone who was fined for chewing gum, or caned for spitting, or any of that stuff. Don't get me wrong, the punishments for committing a crime here are serious. You'll go to jail for drunk driving for instance. But as far as the stuff the West likes to focus on, I've certainly never heard of it."
I asked K.C. to tell me about Singapore.
"You can't really talk about Singapore without talking about Lee Kuan Yew," he said, referring to Singapore's former prime minister, who served from 1959 to 1990. "He was a visionary. Almost everything you see today is because of him. He made housing affordable, he attracted foreign business, he even took care of corruption."
Regarding housing, Lee Kuan Yew started the HDB (Housing and Development Board), a system through which Singaporeans can purchase government-subsidized homes. Today, close to 90% of Singaporeans live in concrete high-rises of this type. And nearly all of them own these homes outright. The buildings are plain to look at on the outside, but because Singapore is a small island, many of them have ocean views that you would pay half a million dollars or more for anywhere else in the world.
Regarding business, Lee introduced the tax incentives I mentioned in my previous two essays (read them here and here). Between 1965 and 1973, he and his ministers lowered unemployment from 14% to 4.5%.
As for corruption, Lee set salaries for judges, ministers, and civil servants at levels comparable to the private sector. The idea was that there's little incentive to take bribes or embezzle if you're already paid extremely well. Today, Singapore officials have some of the highest incomes in the country.
When we arrived in Little India, K.C. parked in front of the Banana Leaf Apollo, one of the premiere Indian restaurants in the country. Instead of plates, you eat off of giant banana leaves. And the food was beyond exquisite. We ate fish head curry, a prized delicacy. "The meat that is hardest to get at is the most delicious part of the fish," K.C. commented, scooping a chunk of the meat around the fish's eye onto my plate. It sounds unpleasant, but he was right. It was perhaps the most delicious fish I have ever eaten (although it may not look all that appetizing).
K.C. and I continued our discussion of Singapore over lunch. A common complaint I had heard from people was that there's nothing to do in Singapore. I asked K.C. about this.
"Total nonsense. What do you want to do? You want to hear some live music? There's plenty of clubs here. The restaurants are incredible and cheap. We've got more shopping malls than you'll know what to do with. There are plenty of bars too. The beaches are clean. And if you're looking for something adventurous, you can go deep-sea diving in Indonesia or drive to Malaysia – both are within an hour by car or boat. And then you've got Jakarta, Bangalore, Beijing, Bangkok, Shanghai, and New Delhi all within a five-hour flight. So how can there be nothing to do?"
And when Singapore finishes constructing two casinos and a Formula 1 circuit, there is going to be even more to do. Property values in Singapore are already jumping in anticipation. But there are still plenty of places available at a decent price.
More to come…
Asian markets soaring today… South Korea, Taiwan, Shanghai, and Hong Kong indexes all up over 5%.
No. 2 home lender Wells Fargo at 52-week high… Warren Buffett reports increased position.