Casino in Singapore

Singapore's plan to build the country's first casino underscores its strategy to create a new economy amid stiff competition from China and other Southeast Asian countries.

The plan to allow a casino has sparked a controversial public debate, with Singaporeans divided on the issue. Proponents say it will benefit Singapore economically, especially the city-state's tourism sector, while those opposed, including some religious groups, worry about social ills such as problem gambling and bankruptcy.

Some legislators have called for a referendum to allow Singaporeans to decide on the issue, or even a free vote by legislators in parliament, which is dominated by the ruling party.

The government has received 19 proposals from bidders all over the world since inviting companies in December to submit their concept plans to build an integrated resort that could include a casino.

Even though many forms of gambling, such as lotteries, are legalized here, casinos have been banned in the past and the government had strongly opposed in recent years any proposal to allow one here. However, it eventually agreed last year (2004) to consider allowing the setting up of a casino.

Singapore-based economists say the government is likely to go ahead with the plan to allow a casino here because it is anxious to diversify the economy, which has been largely based on high-tech manufacturing and financial services, by promoting new areas of growth or expanding those with more potential for growth such as tourism.

''We will continue to promote in a more focused way certain key and promising sectors of the economy. Tourism is one such sector and the proposed integrated resort including possibly a casino is part of our overall set of initiatives to promote tourism,'' Prime Minister Lee Hsien Loong told parliament.

But he also added that ''the casino will neither be the panacea to the challenges facing us -- boosting growth, creating jobs or raising revenues.'' While brushing aside calls for a referendum or free vote in parliament, he said the government will make a careful decision after weighing all the pros and cons within the next six weeks.

In recent years China's emergence as an economic powerhouse combined with higher business cost in Singapore has seen a hollowing out of labor-intensive and low-technology industries in Singapore, with many factories relocating to China or other Southeast Asian countries. Singapore has also been facing fierce competition from neighboring countries such as Malaysia and Thailand in trying to maintain its position as a transport hub in the region.

In the past year, talk of remaking the Singapore economy has accelerated with plans to venture into new areas such as promoting the city-state as an educational hub and medical hub, and most recently it has even begun to step into Islamic finance and banking. In many of these areas, it is clashing with neighboring countries that have similar ambitions.

''As other countries begin to catch up, Singapore needs to move ahead constantly to sustain its competitiveness,'' said Mukul Asher, professor at the new Lee Kuan Yew School of Public Policy.

''The casino will allow diversification of the economy. Singapore is just trying to have as many pillars for the economy as they can and they see casinos as one of the pillars that will sustain future growth,'' he said.

Chan Kok Peng, chief economist at BNP Paribas Peregrine's Singapore office, said: ''The competition is very intensive, in the past Singapore had benefited from the inefficiencies of other countries in the region but now these countries have run up the efficiency ladder. One of the easiest ways is to move into an area where competition is not so crowded.''

And the attraction of casinos is that unlike factories, which are more vulnerable to restructuring and relocation, casinos tend to be more entrenched investments. ''You don't move a casino from here to China the way you would move your factory,'' Chan said.

Economists say it also would make Singapore a more attractive place for tourists, especially tourists from China, which is now one of the fastest growing sources of tourists for Singapore.

Earlier this year, the government announced an ambitious 10-year plan to boost the city-state's attraction as a tourist destination with the aim of doubling the number of visitors to the country to 17 million by 2015, triple tourism earnings to S$30 billion ($18.5 billion) and create 100,000 jobs.

The number of visitors to Singapore last year jumped 36 percent over the same period in 2003 to hit 8.3 million, marking the first time visitors here topped 8 million and generating S$9.6 billion in tourism earnings.

The casino would also be a boost for related sectors such as retail and hospitality and offers the potential to create more jobs than many of the high-tech manufacturing plants in Singapore.

Some say a casino would also provide a lucrative new source of tax revenue for the government, which ran into budget deficits in three of the last four years, and give it greater leeway to reduce corporate taxes further to maintain economic competitiveness.

Note: Copied from the internet to give an understanding.