Middle East Geopolitical Lessons for Singapore

In the year X, where X > 2020, but not sure what X exactly would be except that at that time the situation in South East Asia would be very different because somehow Indonesia manage to get its act together and become quite rich even as many of its people, like China today are poor.

In year X, Singapore finds itself in a severe financial and economic situation. I can't speculate specifically what it would be but for some reasons it would be putting herself into Indonesia's sphere of influence for mutual benefit and security - a good political marriage of sorts or worse for Singapore depending on her leverage.

Now, why am I speculating all these nonsense? It is because it has become a reasonable proposition for something similar to happen in the Gulf economies here and now, which if it happened would be very instructive for Singapore's future.

Earlier I had blogged that Abu Dhabi might not come to Dubai's aid. Furthermore I discovered a little known fact that in 1989, the Saudis helped out Sharjah when it suffered a banking crisis. What does all these mean?




I have seen concept pictures of Bahrain trying to copy Dubai building their islands in the sea like the Dubai's Palms. Doha is trying to make itself a hub of sorts too. Oman is a more interesting tourist attraction than most of the gulf states and doesn't appear to be as keen to be another "me to" against Dubai. Kuwait seems more interested to count on their oil and Abu Dhabi more circumspectly is learning from Dubai and trying to out do it.

The competition between all of them is most obvious now, not with what they have or trying to build with concrete but their airlines. Dubai has Emirates, Abu Dhabi has Eithad, and Qatar has its namesake Qatar Airways. All three had advertised themselves heavily on Singapore's TV.

The Saudis are the latecomer to the game. They are not into airlines but their bold plans and hefty investments are in the economic cities. Since all the Gulf states have copy cat economic strategies, they are likely to over invest, over build and over compete making it all very unprofitable.

This financial crisis is a godsend to the Saudis because they have been ultra conservative and kept most of their powder dry in safe treasuries and other low yield instruments. Abu Dhabi foot dragging over Dubai could hand the UAE now and eventually the GCC to the Saudis hands in the end especially if the Americans are supportive. In this crisis, Saudi financial resources can go very far. They can buy up potential competition to their economic cities for a dime and afterward expand beyond the Arabian gulf.

What is going to happen in a small place like the UAE in the immediate future has huge geo-political implication for this region. The maps could well be redrawn quite differently after the dust has settled all because Abu Dhabi failed to come to Dubai's aid, which gave the Saudis the chance step in buying much of Dubai assets and taking it out of the competition.

Look at Saudi oil reserves vis a vis her gulf neighbours. All these scenario plays may just be postponing the inevitable. All potential paths into the future for this region could end up in Riyadh, the Indonesia of this neighbourhood. History is being made in the Guld now.

Now you can guess why Singapore expends so much effort on the Saudis that my government has no time to even do more to help us get our driving licence transferrable to the UAE one. King Abdullah even flew Lee Kuan Yew back to Singapore on his personal Boeing 747 jet. Now that was first class Arab hospitality.