Singapore thrived on chokepoints. Now they’re a threat

Stand on a clear day atop Singapore’s Marina Bay Sands hotel, and you can see the city-state’s promise and peril in a single glance.

In the foreground, a flotilla of ships lies at anchor, a physical reminder of how Singapore grew rich servicing the immense volume of global trade squeezed through the chokepoint of its narrow strait. On the horizon, you can just make out the coastline of Indonesia, a country with almost 50 times Singapore’s population and 2,500 times as much land. Its proximity is a reminder about how dependent that prosperity remains on good relations with Singapore’s much larger neighbors.

Also Read: India, Singapore eye 2,000 MW power corridor


Such issues are top of mind right now. For weeks, the view has been obscured by a pall of haze drifting across the water from wildfires on the Indonesian islands of Borneo and Sumatra. Singapore passed laws a decade ago to combat this recurring public-health catastrophe, as we’ve written, but has struggled to enforce them amid intransigence from its neighbor. Just days after the city announced measures against 10 Indonesian companies over the blazes this month, Jakarta started cutting pipeline supplies of natural gas to Singapore.

The decision may have a perfectly innocent explanation. Singapore has shifted aggressively toward liquefied natural gas and away from Malaysian and Indonesian piped energy in recent years, anticipating that its neighbors will use more of their own supplies as their economies expand. A key link allowing Indonesia to divert gas locally was completed just weeks ago, and the affected exports represent less than 2% of daily demand.

But recent comments from Jakarta’s energy distribution minister don’t inspire confidence. He warned neighboring countries to “be careful” about annoying Indonesia if they don’t want their exports cut off.

The whole episode is another unpleasant reminder of the vulnerability underlying Singapore’s prosperity. For more than two centuries, it has thrived as a free port, in a world where chokepoints to trade have been progressively dismantled. The city was established by the British to bypass the Dutch stronghold in Java, and its most important nation-building projects in the 1960s and 1970s repeated the model by making it a key node of emerging commercial networks, from oil refining, to container shipping, to long-haul aviation.

Throughout all that, however, Singapore has remained acutely aware of the chokeholds its larger neighbors control. Political separation from Malaysia in 1965 raised fears of water supplies being cut off. A costly program of desalination, recycling, harvesting and reservoir-building would now allow near-self-sufficiency in a crisis.

Also Read: Singapore launches first LNG term supply tender, weighs third import terminal

The same can’t be said for energy. Even LNG supplies could be severed easily by a naval blockade. Nuclear power has been considered on and off for years, but comes with its own challenges: You could fit almost the entire nation inside the 20-kilometer (12-mile) mandatory-evacuation zone established after the Fukushima Daiichi disaster. Plans underway to install 4 gigawatts of solar panels by 2035 could leave about 5% of the country under silicon and glass, and still meet barely a 10th of electricity demand.

Separate plans to develop renewable projects and transmission lines stretching to Vietnam, Laos, Cambodia, Malaysia, Indonesia and even Australia would at least diversify electricity suppliers. But those connections could, in theory, be cut off with the flick of a switch. Singapore’s driving role in establishing the power grid now taking shape across the Association of Southeast Asian Nations can best be seen as an attempt to spread the risk across a web of mutual dependencies.

That’s the hopeful vision. In a world of multilateralism, peace, and trade, small maritime republics can grow fabulously wealthy as nodes for global commerce and capital. Venice, an inspiration to Singapore’s founding generation, followed that model for centuries.

The worrying part is what came afterwards. As Europe's commercial order gave way to an age of revolution, mass armies and nationalism, Venice's wealth proved little protection against the larger powers surrounding it. Napoleon extinguished the thousand-year republic in 1797, and it was traded back and forth like a bargaining chip between France and Austria for decades before being subsumed into the modern Italian state in 1866.

We could be entering a similar moment. The rising force in international relations is the chokepoint maximizer, looking for leverage over computer chips, critical minerals, intellectual property and trade flows to subdue its rivals. This year’s conflict over the Strait of Hormuz is a prime example. With barriers rising to commerce, migration, and capital, free ports like Singapore are in lonely waters.

“If there were no international law and order, and big fish eat small fish and small fish eat shrimps, we wouldn't exist,” founding father Lee Kuan Yew mused in a 2007 interview. “A siege? Control of sea lanes? We'll just starve.”

Lee’s successors must hope the great-power conflict brewing today is a passing storm, rather than a permanent shift in the global climate.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of The Economic Times.)