Japan's Business and Economic Relations With Singapore

Japan and Singapore have similar goals of business and economic prosperity, both having experienced periods of rapid economic development. They share very similar traits, that have facilitated their very good relationship.

Both are an independent island-states in Eastern Asia that vary dramatically from their surrounding countries, both economically and culturally. Both have risen from hard downfalls during the Second World War, which brought both shame and discrimination. Finally both have, or had, strong rising economies since the reconstruction after The Second World War, and can be a good model for lesser developed nations surrounding them.

Despite the Japanese Occupation of Singapore, an event which is difficult for both nations to forget, the countries have developed good connections with each other. These connections account for both trading agreements and foreign workers. In Singapore, many Japanese expats develop residencies due to the growing Singaporean economy. With the “lost decades” Japan has been enduring, many find work elsewhere to broaden their opportunities and escape the economic peril, one of those locations being Singapore. Similarly, Japanese companies find great business within Singapore, as the country finds multiple benefits in buying Japanese produced products. As the relationship develops, both countries will see further benefits that prove the two are good business and economic partners.

From 1942 to 1946, during the Second World War, Japan occupied Singapore. Prior to this event, Singapore was well known for being a British colony, and was one of the most valuable assets the British had in their fight against the Japanese in East Asia. The Battle of Singapore was, according the British Prime Minister Winston Churchill, “the worst disaster and largest capitulation in British history”. The Japanese committed numerous atrocities against the Singapore locals, killing thousands systematically in the Sook Ching Massacre, a method of elimination for anyone who appeared to be anti-Japanese.

Singapore was forced to use the Japanese language, with schools only allowed to only teach in Japanese and hand out Japanese textbooks. Movie theatres were only permitted to show Japanese films, particularly those of propaganda, trying to influence Singaporeans into thinking that Japan is the superior race, and that Allied forces were essentially a joke. The Occupation also lead to scarce resources, increasing the prices of basic necessities dramatically as the war progressed, mainly due to hyperinflation. The Japanese instituted a command economic system, in which there were restrictions on the demand and supply of resources. On August 15th 1945, after the bombing of Hiroshima and Nagasaki, Japan surrendered, marking the end of The Second World War. Singapore, being dependant on the British, was in a state of anomie when the British hadn’t arrived yet. With weakened Japanese troops, also with no place to go, there was widespread riots, lootings, and revenge killings. It took 5 years of chaos before the Singaporean economy returned to its pre-war state.

So how can Singapore, after such a traumatic and humiliating occupation, costing the lives of many innocent Singaporeans, have good relations with Japan?

In 1959, a number of Singaporean locals from different ethnicities, particularly those of Chinese backgrounds, demanded an appropriate apology from Japan. However, Singapore was still part of the British Empire, and the Japanese Foreign Ministry declined the demand since they had already settled war reparations with the British in 1951, which accounted as an apology to Singapore as well. As unfair as the situation appeared, Singapore developed and officialised its independence in 1965, and shortly after in 1966 the Japanese government agreed to pay S$50 million in compensation. It wasn’t until 1993 that the Japan stated an official apology for the atrocities committed during the war to Singapore. Singapore, being a country that envisions future development a lot more than the past, began increasing its GDP through its already established trading industry, a system that has been a huge advantage for Singapore for centuries. Through this the nation developed good relations with other countries, which eventually included Japan.

The Japan Singapore Economic Partnership Agreement, or JSEPA for short is a trading agreement between both Japan and Singapore, established in 2002. During that time period, Singapore was in the phase of developing a new commercial trade strategy. In order to appease the city-state’s larger international economic policy, establishing “like minded” trading partners would be an effective and beneficial way in achieving new trading opportunities. Through this development, the JSEPA was established.

This was Japan’s first Free Trade Agreement, and was with a country that has already had a strong trading history, marking a major milestone in Japanese relations with Singapore. The establishment laid a solid foundation for a firm economic linkage and integration between both countries. The JSEPA eliminated tariffs on goods covering 98.5 percent of trade between the two countries, meaning that tariff-free market access has been granted to an extensive range of products. The JSEPA is also beneficial for business commuters and residential workers. Singaporeans and permanent residents of Singapore are guaranteed entry and stay in Japan to work and to administer their investments under fairly liberal conditions. Similarly, Japanese professionals are able to practice their careers in Singapore, thanks to Singapore’s economy and the relationship with Japan.

Singapore is a country which is home to an astonishingly large assortment of cultures, and Japan has it’s own community within Singapore. These 27,525 Japanese expats, recorded in 2013, consist mostly of corporate employees and their families, along with many Singaporean citizens of Japanese ancestry. Writing from personal experiences of living in Singapore for 11 years, an essence of Japan can be easily found within the small Island. I never actually realised how common Japanese immigrants appeared within my life in Singapore, and how much they have impacted me. These Japanese residing in Singapore see the opportunity of benefiting from Singapore’s growing economy, considering that Japan’s is currently not at an incline.

My dentist of 11 years, including his dentistry company, is almost completely Japanese. Various doctors, who have helped me with the occasional but not plentiful illnesses I’ve had through my childhood, were Japanese. When I built my first desktop computer, the shop owners who helped me were Japanese. With a good assistance in proper construction, this desktop helped me with the various animation works that have gotten me into college. I’ve even had a high school recommended art teacher, who barely spoke any english, help me in creating my portfolio during my university applications. Even despite the language barrier, she was actually the best art teacher I’ve ever had, which shouldn’t be mentioned to the high school art teacher who recommended me to her. It comes to show how common it can be to encounter Japanese immigrants living and working in Singapore.

Various famous Japanese chains located in Singapore have honed an exceedingly large amount of popularity and success. Japanese Retail chains, such as Takashimaya and Isetan, both very popular in Japan, share as similar popularity in Singapore. Both have outlets in the central shopping districts of Singapore, dominating some of the largest and most recognizable buildings, which is partially due to these Japanese outlets in the first place. Uniqlo, having multiple outlets around the world, have 22 in Singapore. Their fashion is commonly worn in Singapore, due to the simple designs that can be appropriate for Singapore’s harsh humidity. Japanese food chains in Singapore, such as Pepper Lunch and Mos Burger, also have gained large popularity within the country.

Japan and Singapore have had a long history together. Starting from a bitter experience of the Japanese Occupation of Singapore during the Second World War, the relationship between the two countries has gradually developed to the point where the Japan Singapore Economic Partnership Agreement was introduced. Japan guarantees entry and stay for individuals from Singapore, which also accounts vise versa. In Singapore, famous Japanese chains are very profitable and respected, selling their unique products that are suitable in most cases for a constant and rapidly developing country such as Singapore.

Before its crash in the 1980’s, resulting in the shame of the “Lost Decades”, Japan experienced an “economic miracle” that many see as a world model. Singapore has been constantly progressing with strength post Second World War, but didn’t really experience the same “economic miracle” until quite recently. Now that Singapore is in the spotlight for it’s economic prosperity, Japan’s relationship with them can be largely beneficial. Not only that, but the relationship can be beneficial for Singapore as well, as the country could potentially learn various aspects of what allowed Japan to enter their previous “economic miracle”, and what specific errors should be avoided. As both countries envision multiple goals ahead of them, their relationship will assist them in their future economic security, and can leave a bond that will remain long lasting.