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Cheap Labor Pushes Singapore to Gamble on Casinos

22 March 2005

SINGAPORE – As reported by Bloomberg News: "Singapore, which fines chewing-gum importers as much as $122,740 and bans Playboy magazine, is relaxing its opposition to another vice: gambling.

"The island-state plans to build its first casino, reversing a four-decade ban, as it seeks new industries to replace manufacturers that are moving to lower-cost China and India. Las Vegas casino operators Harrah's Entertainment Inc., MGM Mirage and Wynn Resorts Ltd. were among the companies that submitted bids for the project on Feb. 28.

"Singapore, with an aging population of 4.2 million, has no choice but to loosen regulations and broaden its economy, says Andy Xie, chief Asia economist at Morgan Stanley in Hong Kong. Prime Minister Lee Hsien Loong, 53, says the casino project is part of Singapore's plan to stay competitive.

"…Building casinos may not be enough to fuel growth in a nation where tourism-related businesses account for just 6 percent of the economy. Singapore's efforts to lure more visitors also face competition from Macau, which has gained an early lead as Asia's gambling hub.

"…Factory wages in Singapore, a former British colony at the tip of the Malay peninsula, are more than 10 times China's.

"…That's driving away companies such as Maxtor Corp., the world's second-largest maker of computer disk drives.

"…Singapore's dependence on exports -- their $82 billion value last year, excluding oil, was equal to 90 percent of GDP -- leaves the nation vulnerable to economic slowdowns in the U.S., its No. 1 market.

"At the same time, buyers in the world's biggest economy are turning increasingly to Chinese suppliers…"

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