Maybe it can all be blamed on Osama, as George W Bush never tires of telling us. September 11 did not bring Singapore's shining, high-growth economy to its knees, but it has cast a longer and more disturbing shadow over it that may make it more difficult to evade the economic downturn.

Muslim militants were discovered in Singapore last year hatching bomb plots. That Singaporeans could espouse the cause of al-Qaeda dealt a blow to country - on the external front as it struggles to rid itself of the taint of extremism, but more importantly on the domestic front, where it now has to confront the dreaded Hydra of race and religion. It shows even Singapore, which has done it's best to keep its head down, cannot escape the most pressing and emotional debates swirling around the issue of Islam and terrorism.

In Singapore's case the whole thing is further complicated by the fact that religion is inextricably intertwined with race: its Malay citizens - about 15 per cent of the population - are all Muslim, and racial identity is seemingly inseparable from religious identity.

The island's authorities are now deeply embroiled in the thorny issue of religious dress codes in schools - specifically whether four very young Malay Muslim girls should be allowed to wear the Muslim headscarf, or "tudung", something specifically banned as it's not recognised as regulation uniform. Some of the girls have been suspended and their parents have clashed with the government on the issue.

The matter pales into insignificance when compared to the sharp downturn and high unemployment. Yet, coming on the heels of the arrest of the Muslim militants, the scarf issue has taken on a deeper significance. After the arrests, for example, there were reports of some people saying they would not get into the same lift with a Malay Muslim. So, the tudung issue may well unnecessarily heighten those sensitivities by highlighting the Muslim identity.

Is there a solution to the headscarf issue? Singapore is a secular state, its schools are secular and anyone attending them is subject to secular rules. Religion is relegated to private life and not restricted as long as secular authority is not questioned.

This should therefore mean a blanket ban on all religious symbols in school. This would perhaps be infinitely better and have more undeniable logic than telling Muslims that Sikh boys are allowed to wear their turbans to school because they have been doing so since British times.

Singapore could indeed allow the wearing of the Muslim scarf, saying that it recognises the concerns of the Malay community and that this will demonstrate in the classroom the diversity that exists in its multi-racial society. It could use the opportunity to show that it understands that being a Muslim is not synonymous with being a terrorist, despite the actions of a few.

Instead, the authorities are prevaricating. They argue that the four girls cannot be allowed to wear the scarves as this will prevent racial integration in the classroom. But of course this is easily contested as it is inconsistent - witness the example of making an exception for Sikh pupils. The argument of preserving racial harmony has been used too often to scare everyone into behaving nicely to each other for fear of the bad old days when there were race riots - but it doesn't seem to satisfy anyone any longer.

Worst of all, it has allowed that which Singapore hates and fears most of all: interference from abroad, and a call to solidarity which has an emotional base that it will find extremely difficult to counter.

Malaysia and even Brunei have jumped into the fray. The fundamentalist Islamic party of Malaysia has told Lee Kuan Yew that universal Islamic elements transcend geographical boundaries - something which must surely send shivers down the spine of the powers that be.

The issue is now threatening to explode not only domestically but as a bilateral issue. While very few Singaporean Malays would actually exchange places with their Malaysian counterparts, this certainly is not going to stop Malaysian political parties from using the matter to establish their own credentials as Malay Muslim champions.

What the issue has shown about Singapore is that for all its talk of a multi-racial society, the races in Singapore co-exist in separate worlds. Very few Singaporean Chinese will be aware of how Singapore's Muslims have been put on the spot like every other Muslim in the aftermath of September 11. Or that Afghanistan, the treatment of Palestinians and Bush's overt threats to Iran and Iraq are discussed at prayers every Friday. Very few Muslims understand why there should be a row over a headscarf.

Perhaps the most pressing problem Singapore needs to address is the dissatisfaction running through Singapore's Malay community which has been simmering for some time. As in a mirror darkly, the situation in Singapore is like that of Malaysia, with the players in reverse roles.

Whereas Malaysia has a political system dominated by Malays, with the non-Malays, especially the ethnic Chinese, traditionally feeling discriminated against, so in Singapore's case it's the Chinese who dominate and the Malays who feel discriminated against.

This, despite Singapore's best efforts to distance itself from such a scenario, that its meritocracy rises above the old story of power, who has it and who wields it. It should not surprise that this issue is so intense at a time when Singapore's economic juggernaut is faltering.

What Singapore should learn from this episode is that it may not be enough to pave over issues of race and religion with material wealth. They are tricky issues and have not vanished under the veneer of economic success and prosperity.

The author is the BBC's correspondent in Singapore.

                                                           Home