[The Dubai Miracle]
1. Each time I return to Dubai, I see new developments. Some of the developments are out of this world like a ski centre in desert country. After Sep 11, this Sheikhdom received huge inflows of money from Saudi Arabia, Iran, Russia, India and elsewhere. Once upon a time, the Dubaians said they learnt from Singapore. Now, with a smile, they say they have overtaken Singapore which, in some ways, they have.

2. Yesterday, on transit in Dubai on our way to Riyadh, we visited the site of the Dubai Mall which was designed by a Singapore team for the Emmar Group. When completed, it will be five times the size of Vivocity, our largest mall. One entrance will provide a drop-off for very well-heeled customers. If you don't drive a Porsche or better, please use some other entrance. Dubai is becoming a playground for some of the wealthiest people in the world. The Burj al Arab hotel (don't know how many stars it gets) is luxurious beyond belief. At the main entrance were parked, maybe, ten Rolls Royces. No one knows how long this boom will continue.


Photo credit: wikipedia.org

3. In all countries, income distribution is stretching out. Increasingly money flows where it wants to, not where governments want it to go. The rich can choose where to live and play, and some come to Dubai. We want them to come to Singapore too. Our IRs should make us more attractive.

4. Our advantage is a better functioning system which enables Singaporeans to earn a premium over the 'international rate'. But there is a limit to that premium. If we over-price or under-pay, the investment goes somewhere else. With hundreds of millions of hungry Chinese, Indians, Vietnamese and others joining the global marketplace, many workers in more developed countries including Singapore come under downward competitive wage pressure. In Dubai, most of the workers are from India and the Philippines. They outnumber the locals.