As in many countries, Singapore’s defence procurement strategy has been shaped by a national response to the specific security challenges the country has seen itself confronting. When the British departed Singapore in 1965, they left behind a security vacuum. Thus, although independence had been gained, the challenge was then to defend it. This was not easy, given that the political tensions between the ruling united Malays National Organisation and the People’s Action Party had become so serious that Singapore had to be separated from the Malaysian Federation to forestall racial conflict (Tan, 1999: 451). Britain initially continued to maintain a large military presence in the city-

state due to the ongoing Indonesian Konfrontasi crisis, but there was continued uncertainty over Singapore’s defence relations with Malaysia now that the former country had left the Federation and the Anglo-Malaysian Defence Agreement no longer applied. Singapore was vulnerable, and one of the principal fears was that Kuala Lumpur might move to close the causeway and cut off the water supply. An added anxiety was that some of Singapore’s key installations were guarded by Malaysian troops. Indeed, many of the troops that formed part of Singapore’s two infantry battalions were Malay. The government managed these tensions, and the battalions were reconstituted to reflect the preponderance of Chinese in local society. Creating a robust defence capability in the immediate post-independence

period was a challenge. Resources for the local provision of military equipment were meagre and weapon systems remained those inherited from the British. By 1968, the British military had withdrawn from the island, leaving Singapore with no air force and navy, and just the rudiments of an army. Equally calamitous, was the closure of Britain’s military base on the island, leading to the loss of 40,000 jobs and a fifth of Singapore’s national income (Drysdale, 1984: 401-2). Defence planning thus required not only acknowledgement of the security challenges facing the country but also a procurement strategy to establish the military capabilities required to meet them. The shape of this strategy, detailed later in the chapter, marks Singapore out as a

country focused on evolving indigenous, supply-side capability embedded in a larger industrial structure. The sudden loss of Singapore’s defence infrastructure in the 1960s created

national uncertainty, not least because Singapore’s predominantly Chinese population faced an axis of Islamic countries amounting to nearly 300 million people. This remains contentious, even to this day, reflecting long-standing tensions in South-East Asia. Anti-Chinese feelings regularly bubble to the surface, as they did in Malaysia in 1964. Five years later, in May 1969, 2,000 people died in the Malay-Chinese riots across Malaysia (Tan, 1999: 453). More recently in 1998, anti-Chinese disturbances broke out in Indonesia. A likely cause of this anti-Chinese rioting is the extraordinarily high proportion of Chinese private assets among the total assets of business communities in South-East Asia, as evidenced by the data shown in Table 9.1. Among neighbouring countries, most observers view Malaysia as Singa-

pore’s principal threat. This is due to a series of troubling disputes between these two erstwhile ‘federated’ allies. First, the question of an unfettered supply of water from the Malaysian Peninsula to Singapore has always been a dangerous flashpoint. Since independence, Singapore has been obliged to purchase 50 per cent of its water from across the causeway, and this has bred tensions, particularly at the contract renewal stage.1 Second, there has been an immigration control dispute that has festered since the late 1980s. This arose over Singapore’s proposed relocation of customs and immigration facilities at the ‘Malaysian-owned’ Tanjong Pagar railway station in Central Singapore to the Woodlands, near Malaysia’s border. An unrelated dispute occurred in 1998, when Malaysia closed its airspace to Singaporean Air Force planes. Coincidentally, Singapore was advised that clearance would be required before its naval ships could enter Malaysian waters. This and other maritime disputes over territorial claims and counter-claims have proved acrimonious. In 2002, for example, tensions over the sovereignty of Pedra Branca (a small island located in the waterway between the two countries) were heightened when Kuala Lumpar accused Singapore of blocking its fishing vessels from the seas around the island.2 Moreover, all four of Singapore’s main air bases are well within artillery range of Peninsular

Malaysia, causing the island to fortify these bases with aircraft shelters and underground parking aprons; there are also at least three nearby highways that can quickly be converted into runways should the need arise (Chang, 2003: 116). Such politico-strategic frictions, including the emerging and potential

threats from the proliferation of piracy, the knock-on impact of military tensions over the Spratley Islands in the South China Sea, and the dangers of a possible return to Indonesia’s aggressive Konfrontasi posture, all reinforce Singapore’s view that a strong military capability is essential to protect its national interests. This, in turn, has sharpened its interest in sustaining indigenous defence industry supply capabilities – a key influence in defence acquisition decisions. Singapore’s success in having addressed the economic and military chal-

lenges it faces ranks as a major ‘small country’ success story in the contemporary era. There are several possible explanations. First, from a political perspective, there was strong, stable and decisive leadership under Prime Minister Lee Kuan Yew. The resulting political unity encouraged long-term planning, especially in the field of economic advancement. A constant theme was the development of dynamic comparative advantages in emerging industrial and technological fields. Investment in human capital was particularly emphasised, supporting the unending search for sustainable competitive advantage. In this regard, Singapore was fortunate to be located at an international trading crossroads. Shipping, insurance, banking, related services and tourism all prospered due to Singapore’s beneficial geographical position. Success was also partially due to the government’s deliberate strategy of enhancing technological development through the adoption of an open and welcoming approach to foreign investment. Even today, more than 70 per cent of Singapore’s investment is foreign-

sourced. This dependence on foreign capital leaves Singapore exposed to the vagaries of the market, but after 40 years, it is a development ‘model’ that has worked well and is the envy of small (and large) countries the world over. The development model recognises that the fusion of political stability, social cohesion and economic development is mutually reinforcing. To that end, successful pursuit of economic objectives diminished the potential for internal unrest, a constant problem facing Singapore’s neighbouring countries of Malaysia and Indonesia. A second factor accounting for Singapore’s success is that the government’s

management of the economy has proved both enlightened and visionary. The central economic authorities adopted an interventionist strategy, with government playing a paternal role: coaxing, guiding and supporting business to take a proactive approach in identifying and investing in the economic growth poles of the global economy. Singapore’s institutionally planned and orchestrated development strategy has proved successful because policies and resources were introduced to support the achievement of ‘sustainable’ competitive advantages. This interventionist strategy was used to manage Singapore through the 1997 Asia-Pacific financial crisis and also the recent and

ongoing economic challenge posed by the rapid emergence of China’s powerful economy. Singapore’s response has been to move quickly to introduce policies designed to secure higher value-added activities through the development of next-generation technological endeavour.3 Singapore, of course, cannot compete with China on scale and cost, but it can compete on technological innovation. This focus on technology has been a constant in the island-state’s development process, and is probably the key reason for its success. A further, less tangible, contextual consideration accounting for Singapore’s

developmental success is rooted in the social and cultural fabric of its people. Observers with an understanding of Singapore will attest to the commitment and hard-working values of its citizens. There is a cultural consensus that transcends those of other communities in the region, and possibly even of China itself. This has much to do with the proximity that comes from ‘small size’, arguably strengthening social bonds and enhancing the socio-economic benefits of Mianzi and guanxi within Chinese culture.4