A wealth-attracting city-state

The flags of Singapore, Canada and Quebec hang from their pole in the entrance hall. Behind the marbled stone furniture, a door opens onto a huge garage, where dozens of technicians are busy. They maintain, repair or inspect business jets. It’s a full house: not a single additional device could fit on the floor, which shines with cleanliness.

“The last few months have been amazing. We’ve quadrupled the size of our facilities, but it’s still full! says Simon Wayne enthusiastically. This native Australian, dressed in an elegant gray suit and polished shoes, is the boss of Bombardier’s service center in Singapore, which serves the Far East, the Indian subcontinent and Oceania.

After disposing of the famous CSeries and several other cameras in its catalog in recent years, Bombardier Aerospace has been dedicated solely to business aircraft since June 2020. And, for the company supported by hundreds of millions by Quebec and Ottawa, this niche aimed at a wealthy clientele has been a resounding success.

The huge aeronautical garage, which employs 260 people, became last June the largest facility dedicated to the maintenance of private aircraft in Asia, all manufacturers combined. “The largest fleet of business jets in the Asia-Pacific region is that of Bombardier,” said Mr. Wayne, who has lived in Singapore with his family for 14 years.

On the floor, a technician sprays a cabin part and scrubs it. In another room, painters are giving a makeover to a device that has just changed owners. A smell of solvent hangs in the air. Some planes are dismantled from top to bottom for a refurbishment of the mechanics. Others see their interior finish brought up to date.

Owners of private planes concerned about the environment will find their account here: the service center incorporates solar panels and charging stations for electric cars. Mr. Wayne assures him: Bombardier tries to be “as green as possible”. It also offers its customers a kerosene mixture that contains sustainable fuel.

The key to success “

Ten days before the Passage du Devoir, it was the Formula 1 Grand Prix which stopped in the city-state, located at the tip of the Malay Peninsula. The technicians worked day and night to maintain the planes of the many customers of the Quebec flagship who were visiting Singapore. They notably helped Sergio Pérez, the winner of the race, to leave the country aboard a Bombardier aircraft with his trophy. “It was their way of supporting the winner,” says Mr. Wayne with a laugh.

The Grand Prix “brings together billionaires from different regions, whether from China, Indonesia or India: everyone joins in,” explains Jean-Christophe Gallagher, Bombardier’s vice-president responsible for from customer service, who traveled to Singapore for the race with the company’s CEO, Éric Martel. Senior management had given itself the mission of surveying the satisfaction of its customers, but also of recruiting new buyers, says Mr. Gallagher by videoconference from Montreal.

The vice-president, still suffering from the jet lag caused by his recent trip to Asia, could not be happier with Bombardier’s presence in Singapore, which dates back to 2014. At the time, the government of Lee Hsien Loong rolled out the red carpet for the company. A parastatal economic development agency had helped Bombardier rent space, find a construction contractor and recruit skilled labour.

“Having an interlocutor like that, who sets up all the elements for you, makes things so much easier. In my opinion, this support from people who want to do business is the key to Singapore’s success,” said Mr. Gallagher. The city of the lion also exempts the aircraft manufacturer from any tax on the services it offers to owners of private aircraft.

A key location

Bombardier is not the only Quebec company to be interested in Singapore. Since April, around thirty companies have sent representatives there as part of economic missions, underlines René Sylvestre, the head of the Quebec delegation established there since 2018. “It’s huge! he said over the hubbub of a chic downtown bistro.

Southeast Asia is taking an increasingly important place in global supply chains. Multinationals are setting up new sectors there, such as electronics (in Malaysia) or the automobile industry (in Thailand). “And Singapore is the center of this big wheel. Here, we exchange energy, products, services,” says Mr. Sylvestre, who holds a master’s degree in business administration from the National University of Singapore.

In recent years, the former British colony – in eternal competition with Hong Kong, its rival twin – has taken an increasingly important place in the world economic chessboard. The recent turbulence in Hong Kong and Taiwan is also creating an influx of wealth to Singapore, one of the few Asian countries where foreign investors know they will regain the rule of law and a merciless fight against corruption. English — the common language of this multicultural country — is another pull factor.

Since the creation of modern Singapore by the colonial administrator Thomas Stamford Raffles, in 1819, the country has benefited from a strategic geographical location. Ships rounding Southeast Asia pass through a strait in front of the city. The port of Singapore is today the second in importance in the world, after that of Shanghai. A multitude of companies gravitate around this major commercial crossroads.

In addition, major refineries are established on the island of Jurong, southwest of Singapore. This entirely industrial island was created by bringing together seven islets, whose initial area was tripled by means of backfilling. The economy of the “garden city” is therefore closely dependent on the refining of black gold from the Middle East, destined for Japan or China.

A state that plays on the stock market

In the business district, at lunchtime or at the end of the day, a crowd of well-dressed professionals storm the sidewalks. Singapore is also a major financial center on a global scale. From the top of his office, on the 19th floor of a gleaming skyscraper, Jonathan Denis-Jacob enjoys an unobstructed view of the city-state, whose economic strike force greatly impresses him.

“Singapore is a fascinating place. The main achievements made since the country’s independence stem mainly from the governance model, that’s really what changes everything,” says this Quebecer, director of consulting at Colliers, a multinational real estate company, who has lived here for six years with his wife, a Singaporean.

Which governance model? First, he explains, the government owns almost all of the small national territory. “All these bits of land there that you see are 99-year emphyteutic leases,” he points out, pointing to the business district through his window. The State thus retains its total control over its territorial development, but can also reap significant profits on the same plot of land several times over the decades.

Secondly, says Mr. Denis-Jacob, Singapore generates significant revenues thanks to its many state-owned companies, which fulfill a variety of mandates, related to drinking water, industry, finance, ports, etc. These organizations are not ministries, but nevertheless are sometimes given powers under the law. They have the mandate to generate profits, with some exceptions.

Third, the state is the majority shareholder of most large national companies listed on the stock exchange. The government is making these investments through its two sovereign wealth funds, GIC and Temasek, whose combined value is estimated at $1 trillion. “The state has legal and financial mechanisms to generate income in perpetuity, without depending solely on taxation,” summarizes Mr. Denis-Jacob.

These revenues give the State the luxury of subsidizing certain public services, including its unique program in the world of social housing — a deficit of four billion dollars last year — which is home to the vast majority of the population.

In many ways, Singapore’s wealth therefore lubricates the unbridled mutation of its territory. In fact, just a few decades ago, the area around Seletar airport — where Bombardier, Bell Helicopter, Rolls-Royce and Pratt & Whitney are located today — was frequented by the Orang Seletar, a Malay community nomadic living in the mangroves. It is now imperative to do business there in a way that is “respectful of local history and tradition”, according to Mr. Wayne.

This report was financed thanks to the support of the International Journalism Fund Transat-The duty.

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A wealth-attracting city-state

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