In a 1988 speech, then-Foreign Affairs Minister George Yeo compared the rise of Venice and Singapore. With two years to Singapore’s 50th birthday, the nation could probably learn more from Venice’s decline.
Tan Sheng Hui Today Online 14 Oct 13;
As our water taxi pulled away from the Rialto Bridge stop along Venice’s world-famous Grand Canal, our audio guide sounded a warning: “Venice is in decline. Once Europe’s largest financial centre, it dominated trade in the Mediterranean with a population of 175,000 at its peak. Now though, this historic city has under 60,000 residents with a quarter of these aged over 64. There could be no more full-time, native-born inhabitants by 2030.”
“Venice”, he added, “might be just a floating museum by then. A shadow of its glorious past”.
In a 1988 speech, Mr George Yeo who was then Singapore’s Foreign Affairs Minister compared the rise of Venice and Singapore. Two years to our nation’s 50th birthday, we could probably learn more from Venice’s decline.
EXTERNAL COMPETITION
Venice’s decline could be attributed to events after the fall of Constantinople to the Turks in 1453. Its trade routes were under threat with Columbus’ discovery of America in 1492 and Vasco de Gama routing trades via the Cape of Good Hope to Asia in 1498.
These events significantly reduced Venice’s trade with the Levant or eastern Mediterranean and boosted the fortunes and relevance of emerging maritime powers such as Spain, Portugal and other nations west of Italy.
Singapore faces similar competition. Last month, a Chinese container ship became the first commercial vessel to travel through the Arctic via the Northern Sea Route (NSR). It skipped Singapore and reached Rotterdam from Dalian on Sept 10. The journey took 34 days — 11 days shorter than if it had used the Suez Canal.
If the NSR eventually becomes commercially viable, ships may bypass Singapore (a key shipping hub on the route via the Suez Canal). Singapore has responded by gaining a permanent observer seat on the Arctic Council and diversifying its port businesses.
Meanwhile, the potential construction of Thailand’s own “Suez Canal” across the Isthmus of Kra could save ships up to four days and render Singapore and the Straits of Malacca potentially irrelevant.
Venice also had to compete with neighbouring financial centres like Genoa and Florence. Although it had pioneered the issuance of government bonds and dominated finance and commerce in the 15th century, it was overshadowed by Genoa in the 16th century and, by the 17th century, Amsterdam, which had become the world’s leading financial centre having developed central banking, the stock market and financial derivatives.
In Asia, competition between Hong Kong and Singapore as regional financial hubs has been well-documented, but both should keep a keen eye on Shanghai’s emergence. On Sept 29, China launched a free trade zone in Shanghai with the goal of making it a world financial centre by 2020, going beyond greater trade liberalisation to include investment, financial services and free currency convertibility.
INTERNAL FISSURES
Fissures within society probably also contributed to Venice’s eventual decline. In Why Nations Fail: The Origins of Power, Prosperity and Poverty, economists Daron Acemoglu and James Robinson argued that while upward mobility drove Venice’s wealth and power through the commenda (a partnership where capital-poor sailors and rich Venetians shared profits from voyages), this eventually threatened the established elite.
From 1315, the Venetian elite “pulled up the ladder” by instituting a political shift which led to Venice’s transformation into what the authors call an “extractive state”, where ruling elites extract as much wealth as they can from the rest of society. Such states, they argue, are more inclined to fail than “inclusive states”, which give everyone access to economic opportunity.
Singapore must guard against such fissures and remain “inclusive”. We have done well to promote meritocracy in our society. However, as income inequality widens, society must play a bigger role alongside Government to prevent fissures from destroying our societal fabric.
Last month, speakers at a National University of Singapore forum advocated for more targeted measures to address poverty here. In a survey of 383 Singaporeans led by Associate Professor Irene Ng, 60 per cent felt the amount spent on assistance to the poor was inadequate and 70 per cent did not see poverty as the individual’s fault.
Assoc Prof Ng — who concedes her results are not fully representative — also found that less than half surveyed were willing to pay more taxes in return for greater government spending to help the poor. While there is no evidence to suggest that Singaporean elites are “pulling up the ladder”, the need to be “inclusive” is arguably greater than ever before, as the divide between rich and poor widens and our society ages.
Singapore will do well to learn from Venice’s decline or risk becoming irrelevant, broken and a shadow of what our forefathers worked so hard to build.
ABOUT THE AUTHOR:
Tan Sheng Hui was an International and Global Affairs Fellow at the Belfer Center for Science and International Affairs at Harvard University. He now works in financial services in Singapore.
