Wednesday 06 Oct 2021 | 09:54 | SYDNEY
Wednesday 06 Oct 2021 | 09:54 | SYDNEY

Singapore slings and arrows


Graeme Dobell

11 April 2011 14:15

Australia is happy enough to be Asia's quarry and farm, but being a financial branch office for an Asian city-state is apparently too hard to contemplate.

'No-brainer' is the standout comment that will be long remembered from Canberra's rejection of Singapore's $8.4 billion bid to takeover Australia's Securities Exchange. The 'no-brainer' line from the Treasurer, Wayne Swan, was no brain explosion. It was part of his opening spiel in announcing the thumbs down to Singapore. He said it and he meant to say it:

'So let's be clear, let's be very clear here, this is not a merger, it's a takeover that would see Australia's financial sector become a subsidiary to a competitor in Asia. As my detailed consideration of these facts went on, it became clear to me that it was a no-brainer that this deal is not in Australia's national interest. This takeover would not enhance our access to global financial markets. This takeover would not deliver high quality financial services jobs for Australia. This takeover would not build Australia as a financial services hub within Asia. The proposed takeover would risk seeing jobs and capital move to Singapore and I'm not going to stand by and let that happen'.

Do not think too deeply on Australia seeking to be a 'financial services hub within Asia' by rejecting marriage with one of Asia's significant hubs. The logic of the Swan announcement is that the ASX must be the bidder not the target.

Australia is usually very welcoming to foreign cash. Knocking back Singapore ranks as a once in a decade event. As the Treasurer made clear in his formal statement, no foreign proposal has been rejected since 2001; and since Labor came to Government in 2007, 99 percent of applications have been approved without conditions.

Another part of Swan's statement referred to the 'strategic implications' of Singapore's proposed acquisition. The Treasurer was using 'strategic' in the sense often employed by economists and business leaders. But consider the decision for a moment as a political as well as an economic call. What does it tell us about some of the boundaries or no-go zones involved in Australia's 40-year-old Great Asia Project' 

The Project to find security in not from Asia has enjoyed broad support in the Australian polity but the effort inevitably generates both ambivalence and argument. As Asian engagement or enmeshment or integration gets broader and deeper, Australia cannot always be the actor making the moves or deciding the course.

Engagement can seem very different when you are not the one making the proposal. Singapore, not Australia, was seeking to define the terms and ambition of a significant bit of economic convergence.

The reversal in roles even carried through to some of the Australian commentary, with Singapore portrayed as not being sensitive to the Oz way of doing things. It is a strange echo of all those past injunctions about the need for Australia to develop an understanding of the Asian way.

As an example, Laura Tingle, in The Australian Financial Review, (subscription) put the boot into the Asian suitor, arguing that the Singapore Exchange comprehensively messed up during its long negotiation with the Foreign Investment Review Board: 'It seems in this case that the foreign buyer just didn't correctly read the signals it was being given on the regulatory issues, or on the quality of the proposal it was putting forward in the many discussions it had with the FIRB over a five-month period'.

So with more than eight billion dollars on the table, Singapore wasn't listening properly' The Asian deal-makers are obviously going to need some cultural sensitivity courses on how to read the subtle signs that indicate what is really going on behind the Delphic mask of those inscrutable Australians.

Australia is grappling with the big geo-political and geo-economic questions posed by China (pop: 1.33 billion). Now Singapore (pop: 4.7 million) has asked a similar question about what Asia might want to do with Australia. It is a different version of the traditional debate about what Australia wants to do with Asia. And the discussion can become more confronting when it is Asia, not Australia, doing the proposing.

Some aspects of the Asian century are going to be tough for Australia — even for the cosmopolitan internationalists and sophisticates of the political and business classes. Being taken over by Singapore falls into that category.

Photo by Flickr user pand0ra23.