RELATED:
Optus deal questioned after spy allegations : ABC Lateline
Spy allegations shocking: Democrats: ABC Lateline


AFTER decades of absolute dedication to progress, Singapore has become the most developed nation in Southeast Asia.

To keep growing it must increase investments abroad and Australia is proving a lucrative destination for Singapore's capital.

Several large companies have already been targets, Optus among them and more are on the agenda.

It is all part of a multibillion-dollar buying spree that has prompted consternation in some quarters.

Compere: Tony Jones Reporter: Margot O'Neill

MARGOT O'NEILL: Singapore is run more like a corporation than a country.

Most of its investment companies are controlled by the government, the most important of which, the secretive government investment corporation is chaired by former PM Lee Kuan Yew.

It has been called Lennonism with a business plan and it has transformed this little island nation of four million people into the most successful economy in Southeast Asia.

Too successful, in fact, its economy has now outgrown Singapore. It needs to go global, so Singapore Inc has turned to Australia.

MAURICE NEWMAN, CHAIRMAN, AUSTRALIAN STOCK EXCHANGE: The Singaporeans clearly want to bulk up.

They've got substantial businesses in banking, in telecommunications and their airline, but they are not big enough in a global sense, on their own. So they just have to get bigger and Australia is a friendly investment environment.

MARGOT O'NEILL: Since 1995, Singapore's investment in Australia has doubled from $10.7 billion to nearly $20 billion last year, pushing it to our fifth largest investor.

While Singapore used to mainly hold modest real estate investments in Australia, now it holds strategic infrastructure, with significant interests in telecommunications, airlines and electricity supplies.

Coming up on the agenda - seaports, airports and banks.

DR LOONG WONG, UNIVERSITY OF NEWCASTLE: I think it's a beginning.

I think it's probably stage one of Singapore's plan is trying to tap into the skills that Australia may have.

MARGOT O'NEILL: Not everyone in Australia has welcomed Singapore's growing influence.

The close links between government and business, and Singapore's treatment of dissidents, prompted Network Seven's chief, Kerry Stokes, to warn the way Singapore does business would not be acceptable to the majority of Australians.

But there are more opportunities than threats, according to the chairman of the Australian Stock Exchange.

MAURICE NEWMAN: There is an underlying concern - perhaps they're becoming too dominant and will control the country. I don't think that's really a risk with Singapore.

These are discrete areas that they've selected to invest in. But, you know, we do hear it from time to time. And investor interests obviously have come concern that the competition might heat up.

MARGOT O'NEILL: Commercial links are likely to intensify if a free-trade agreement is finalised next month, but it's unclear if Singapore will be as open to Australian investment.

MAURICE NEWMAN: Singapore also has to be tested and to show that it is prepared to accept Australian investments in some of their icons in the same way that Australians are prepared to accept Singapore investment in ours.

I believe that Singapore is mature enough to do that.

MARGOT O'NEILL: Of course, there's no guarantee Singapore's success can be replicated outside what Lee Kuan Yew called the microbe-free environment of the highly-controlled island nation.

DR LOONG WONG: They bombed badly in Thailand, they bombed badly in China, they bombed badly in Indonesia, and, you know, and if you're a Singapore watcher, you're going to wonder what they're going to do in Australia.

MARGOT O'NEILL: But while Singapore will be tested by Australia's more open and robust system, there are those who think that Australia could also learn from Singapore's strategic approach.

DR LOONG WONG: Australians somehow don't look at the big picture in that sense.

I think they're more focused on the short-term.

At least in Singapore they have a vision for Singapore international, whereas in the context of Australia, we don't really have a vision.