Singapore Government Press Release

Media Division, Ministry of Information & The Arts, #36-00, PSA Building, 460 Alexandra Road, Singapore 119963, Tel: 3757794/5

SINGAPORE GOVERNMENT STATEMENT

On 12 Oct 96, an Australian Television Station, Special Broadcasting Service (SBS), aired a programme called "Singapore Sling", as a segment of its "Dateline" programme.

2 The programme referred to an investment by the Government of

Singapore Investment Corporation (GIC) in the Myanmar Fund, which is a

direct investment fund devoted to projects in Myanmar. It reported that the

Fund has stakes in companies owned by one Steven Law, a Myanmar national,

who was alleged to be involved in the drug trade together with his father, Lo

Hsing Han. It said that 6 weeks after the Myanmar Fund was listed on the Irish

Stock Exchange, GIC "went from being a core shareholder to having no

shares at all". Another company, Ince & Co, then appeared on the share

Dateline journalists had been unable to trace the anonymous owners of Ince &

Co. (See transcript attached.)

3 The programme thus insinuated that through the Myanmar Fund, the

Singapore Government was secretly collaborating with major drug producers

and traffickers in Myanmar to help them launder drug money. This was why

GIC had concealed its participation in the Fund. It said that given the

Singapore Government's harsh attitude to drug abuse and trafficking, this was

hypocritical and raised important questions of integrity, even if it was not

illegal.

4 The Government immediately investigated the allegations in the

Dateline programme. The Myanmar Fund was launched in 1994. Its

investment manager is Kerry Investment Management (Jersey) Limited

(KIMJ). KIMJ is owned by Kerry Financial Services Limited, Hongkong,

which belongs to the Robert Kuok group. GIC holds a 21.5% stake worth

US$10 million in the Fund, and is thus considered a "core shareholder". Other

shareholders include Air Liquids International, and beneficial interests held by

nominee companies such as Coutts & Co (an old British bank) and Swiss

Bank Corporation.

5 GIC is a passive investor in the Myanmar Fund. It is not represented on

the Board of Directors of the Fund or on the Board of KIMJ. One GIC officer

sits on the Investment Committee, because GIC is a core shareholder. But

investments decisions are made by KIMJ, the manager of the Fund, not by the

Investment Committee.

6 There is nothing mysterious about Ince & Co. GIC keeps its securities

with custodian banks world-wide. This is a common practice of most

investment corporations. In this case the custodian bank is Morgan Guaranty

Trust Company in New York, and Ince & Co is the company set up by

Morgan Guaranty to hold shares in its custody. This is why GIC's shares in the Myanmar Fund are registered under the name of Ince & Co.

7 GIC's investment in the Myanmar Fund is therefore completely open

and above board. The Myanmar Fund's stakes in the two hotels and one

company identified by the programme are straightforward investments in bona

fide commercial projects.

8 On 26 Oct 96, LTG (Retd) Winston Choo, Singapore's High

Commissioner to Canberra, wrote to the Special Broadcasting Service to

protest against the preposterous allegations. (See attached.)

9 On 31 Oct 96, the SDP and PKMS held a press conference to call on

the Government to deny these allegations. Asked whether the SDP had

verified any of the allegations, Dr Chee Soon Juan said that "We are not here

to verify any of the facts. … We are not here to conduct investigations

ourselves. Investigations were carried out by this and in this programme. It's

been aired. We want the Government to categorically deny all these

allegations."

10 But the "Singapore Sling" programme had featured Dr Chee telling the

Foreign Correspondents' Association in Singapore: "Why we engaged with

the SLORC when they are in some way or another connected with drug

trafficking that's going on in Myanmar. And when drug traffickers pass

through, come through Singapore, when they are caught, we hang them. It is a

moral question that I think we have to ask ourselves."

11 Although Dr Chee gave a full synopsis of the programme at his press

conference, he failed to state that he had himself appeared in it, and that SBS

has used his words to support its attack on the Singapore Government. This

gave the lie to his pretence that he was not endorsing the programme's

allegations, but was merely drawing the public's attention to an attack on the

Government.

12 Dr Chee also demanded that the Government state categorically that

GIC no longer holds shares in the Myanmar Fund. Why should he make this

demand, unless there is something wrong in GIC owning the shares?

13 On 30 Oct 96, while in Canberra for a Joint Ministerial Committee

meeting, the Minister for Foreign Affairs and two other Singapore Ministers

held a joint press conference with the Australian Ministers. An SBS reporter

and other Australian reporters were present. None of them raised the "Singa-

pore Sling" issue. The SBS reporter asked a question, but on a different

subject.

14 SBS therefore had the opportunity to raise the issue directly with our

Ministers in Canberra, but did not do so. Yet Dr Chee called a press

conference in Singapore to give further prominence and credence to SBS'

allegations and innuendoes. He has joined up with an Australian TV station,

SBS, to discredit the Singapore Government.

15 This is the third time Dr Chee has joined foreign interest groups to

attack Singapore. During the Flor Contemplacion incident, Dr Chee declared

that the SDP was neutral between the Singapore Government and the agitators

in the Philippines, instead of defending Singapore's sovereign right to enforce

its laws. In Williams College in September last year, Dr Chee supported

Francis Seow and Christopher Lingle at a forum when they attacked the

Singapore judiciary.

16 Dr Chee claimed at the press conference that he was highlighting this

matter urgently, "to uphold the good name of our country". If this is his

motive, he should get the SDP MPs to move a motion calling for a

Commission of Inquiry on GIC's investment in the Myanmar Fund. There can

then be a full debate in Parliament.

17 The Government welcomes such an open inquiry, and will support the

motion. At the Commission of Inquiry the SDP can bring evidence, including

that of the Australian TV station SBS, to show that GIC had acted immorally,

and that by GIC investing in the Myanmar Fund, the Government was

colluding with drug traffickers. If the SDP does not do this, then this is yet

another instance of Dr Chee allowing himself to be used by foreign groups to

discredit Singapore.

2 November 1996

C O P Y

HIGH COMMISSION OF THE

REPUBLIC OF SINGAPORE

26 October 1996

Mr Malcolm Long

Managing Director

Special Broadcasting Service (SBS)

Locked Bag 028

CROWS NEST NSW 2065

Fax: (612) 9430 3054

Dear Mr Long

"SINGAPORE SLING"

1 My attention has been drawn to a recent telecast by SBS of a segment "Singapore Sling" of Dateline (12 Oct 96) which suggested that the Government of Singapore Investment Corporation (GIC) has made investments in the Myanmar Fund with the knowledge and intention that this supports the drug trade.

2 Dateline's innueados are preposterous. Our laws against drug trafficking are among the world's toughest. Drug traffickers face the death penalty. The law is applied without discrimination; Singaporean and foreign drug traffickers have been executed. Even thouse apprehended while on transit through Singapore with drugs meant for other destinations (including Australia) are dealt with under these laws. Our laws also provide for the seizure of assets of those convicted of drug trafficking. It is therefore absurd to suggest that the GIC would undermine our efforts to keep Singapore drug-free by knowingly supporting or condoning activities connected with the illicit drug trade.

3 The GIC invests in a wide range of assets around the world, not only in rapidly growing developing economies but also in the United States, Japan and Europe.

4 Dateline implied that GIC camouflaged its involvement in the Fund by registering its shares under the name "Ince & Co". There is no mystery to this, GIC keeps its securities with custodian banks world-wide, in this case Morgan Guaranty Trust Company in New York, to which Ince & Co belongs. This is a common practice of most investment corporations. The GIC's investment in the Myanmar Fund is transparent and it has publicly disclosed that it has an investment of 21.5 per cent worth US$10 million in the fund.

SIGNED

LT-GEN. (RET) WINSTON CHOO

HIGH COMMISSIONER IN CANBERRA

17 Forster Crescent, Yarralumla, Australian Capital Territory 2600, Australia

Tel: +61-6-2733944. Telex: AA 62192 SINGAWA. Fax: +61-6-2733260 SHC CBR

"SINGAPORE SLING"

TRANSCRIPT OF SEGMENT FEATURED ON "DATELINE"

SATURDAY 12 OCTOBER 1996 AT 7.30 PM, SBS

Report prepared by Mike Carey.

Paul Murphy (Presenter of Dateline):

In June, Singapore's Senior Minister and elder statesman Lee Kuan Yew suggested that Burma's Aung San Suu Kyi should stay behind her fence as a symbol of democracy. He went on to say that the only institution capable of holding Burma together was the military junta the SLORC. Singapore companies have targetted Burma and perhaps Mr Lee was concerned that any change in Burma's power structure could place those joint ventures in jeopardy. Even his government's own investment corporation the GIC has been involved. But what is the price of investing in a country which is the home to drug barons like Law Sit Han who produced the majority of the world's heroin and which has a government criticised for human rights abuses of the worst kind. How far should a country like Singapore go to get in on the ground floor. Mike Carey reports on Singapore's connections with the shadier side of Burmese business.

Mike Carey (MC)

From Marina Mandarin Hotel, Singapore is shining and upright. A model of corporate probity in a world of jungle capitalism. According to the Transparency International's 1996 survey of international business opinion, Singapore is the least corrupt country in Asia.

SM Lee Kuan Yew

"We set up a system to ensure mutual vigilance to maintain high standards of integrity and competence. But I believe and I've always believed that more important than institutions is the culture of honest government and an honest society that we have established."

This programme is not about illegality, more about hypocrisy. Several years ago, Singapore began its campaign to go regional, to secure its future by investing in neighbouring emerging markets, China, Cambodia, Vietnam, India and more particularly Burma. Singapore is now Burma's largest trading partner and investor. In its efforts to anchor the Singaporean economy to the next generation of tigers, Singapore has developed some unusual links. Dr Chee Soon Juan, Leader of the Singapore's opposition Democratic Party, is alarmed by his country's association with the Burmese military regime the SLORC.

Dr Chee Soon Juan

"Why we engaged with the SLORC when they are in some way or another connected with drug trafficking that's going on in Burma. And when drug traffickers pass through, come through Singapore, when they are caught, we hang them. It's a moral question that I think we have to ask ourselves."

Singapore and Burma have a symbiotic relationship. Burma gets investment and the backing of clean, green Singapore. Singapore gets short term profits from trading and tourism and a long term foothold in the resource-rich golden land. When Burma's Prime Minister, Sr. General Than Shwe made an official visit to Singapore last year, few realised the depth of the friendship. Recently Burma's Hotels and Tourism Minister said, "we owed so much to the Government of Singapore for strengthening bilateral economic cooperation at the time when negative issues on our country are spreading all over the world". After 18 months' of research, Dateline can now show that Singapore is not only dealing with the Burmese military regime, the SLORC. The Singapore Government had business links with an investment fund which extended an option to an opium warlord.

In Carpenter Street, old Chinatown, local residents watched an outdoor opera, part of the Hungry Ghosts' Festival. In opera as in life, there is the public performance but a lot happens hidden away backstage. The trail that links Singapore and Burma starts here. Carpenter Street is also the home to Kuok Singapore, part of the multi-billion dollar Kuok Group. Robert Kuok started out in sugar and palm oil. Now he has huge interests in the Shangri-La hotel chain, soft drink bottling, the media and financial services across the Asia-Pacific. The Kuok Group was one of the first to realise Burma's potential. It soon secured a major share of the edible oils and raw materials trade, then set out to build two hotels in the capital Rangoon, the Shangri-La and Traders. To finance these and other ventures, it set up the Myanmar Fund with Thailand's Ho family in 1994. I first met Halpin Ho, who is a director of the Myanmar Fund in Rangoon last year. He showed me around his hotel construction site.

Halpin Ho, one of the Directors of Myanmar Fund

We are going to dismantle this one and we are going to build the traditional bungalow Burmese style. The Myanmar Fund is a fund that we jointly pursue together with Kerry Securities in Hong Kong because you know Burma or Myanmar is just opening up and many of the banks, they are not familiar, so when we have projects, we need financing, so we set up this first fund to finance economic development projects.

The Myanmar Fund Limited is a truly international creature. It is incorporated on a tax-free Channel Island of Jersey. While the fund is registered in Jersey, it is listed on the Irish Stock Exchange in Dublin.

Tom Healy, Chairman of the Irish Stock Exchange

The main reason funds come here now is that we are the biggest listing centre in the world for new investment funds, so we are probably setting the world standards, so if people want a respectable listing centre, we tend to be the number one choice.

Just two of the Myanmar Fund's investment in Burma make interesting reading. It has a 5.5% stake in the Traders Hotel and the same percentage in the Shangri-La. A prominent Burmese business family also has an interest on these projects. Law Sit Han is Chairman of both the Asia World Company and Kokang Export, Import and Construction. His son Steven Law is Managing Director and they are both Burmese nationals. Law Sit Han or Lo Hsing Han as he is better known, was the first modern opium warlord in the Golden Triangle. He was the man the Americans love to hate.

Bertil Lintner, Far Eastern Economic Review

US narcotics adviser Nelson Gross called him in the early 1970s "the king-pin" of the heroin traffic in Southeast Asia and he continued, "Lo Hsing Han is an international bandit responsible for growing proportion of Asia's and America's drug caused miseries".

In this photo, Lo Hsing Han is next to Lt-General Khin Nyunt, now Secretary One of the Burmese military regime the SLORC and this is Lt-General Khin Nyunt being presented to Singapore's President last year. A document obtained from the Thai office of Narcotics Control Board could not be clearer. It claims "Lo Hsing Han is a drug trafficker in the Golden Triangle. General Khin Nyunt is termed his 'supporter'". It goes on "in February 1993, Lo Hsing Han received the privilege from Brigadier Lt-General Khin Nyunt to smuggle heroin from the Kokang Group to Tachilek without interception". Australian Federal Police Specialist Rod Duncan gave this interview to Dateline last year.

Rod Duncan, Australian Federal Police Specialist Lo Hsing Han, that is correct. He is one of the major drug producers and traffickers and his major sphere of operation is in the northern part of the Shan state, long-term operator. In terms of drug operations, the area Lo Hsing Han and his organisation, including the political and military side of his organisation which he is a part, they control a vast area of land and therefore a lot of primary production. They actually dictate how much opium would be cultivated by the ethnic minorities in that area and they also control a wide range of refineries.

When in Singapore, Lo Hsing Han always stays at the Kuok Group's Shangri-La. His son Steven Law comes to Singapore quite often too. While Steven Law was recently denied a visa to enter the United States on suspicion of involvement in the drug trade, in Singapore he has built a sizeable portfolio. Two of his companies, Golden Aaron and Kokang Singapore are located here in Shenton Way, a prestigious address in Singapore's business hub. Another firm, in his wife's name, is registered at a suburban house. We decided to check out his company headquarters. For a successful businessman, he maintains a low profile. His company's name was not listed downstairs nor on the 10th floor.

MC Hello, how are you.

Wife Hello, you are from?

(Mrs Steven Law/Cecilia Ng)

MC From SBS Television from Australia

Wife Oh

MC Wanting to speak to Mr Steven Law about, if possible, his recent

America business about the visa.

Wife Visa about what?

MC The American business

(Mrs Law introduced)

MC Oh, hello, how are you. About, you know, the story about the refusal

of the visa.

Wife How you come to know that?

MC It is in the newspapers.

Wife In Singapore?

MC Yes.

Wife Because we are hurrying back to Yangon, we are leaving for airport

now. Our flight is 5 o'clock. Yes.

We set up at Changi Airport and waited, hoping to get an interview but he was late, almost missing his plane. Apparently Steven Law is the first prominent Burmese citizen refused the US travel document on suspicion of link with the drug trade. While he was told a US visa was out of the question, in Singapore, he can come and go at will.

MC Hello, Mr Law, I met you before, Mike Carey. I met your wife

today.

Steven Law Ya.

MC Have you got anything to say about this visa business.

Steven Ah, it's a small thing. I need to rush to the airport. Where are you going to?

MC I just came out to see you and if possible...

Steven Oh, I'm already late, 5.30.

MC So, ok, but are you sure that you are going to fight the visa thing or what are you going to do.

Steven I'm a businessman now.

MC No drugs? No involvement in drugs?

Steven No, no, no involvement. Ok, can you excuse me, I need to rush.

MC Ok, bye, have a good flight.

The next part of the journey takes us to Burma, the golden land. This is the magical Shwedagon Pagoda in Rangoon. Its stupa is clad in 8688 solid gold slabs. The very tip is encrusted with over 5400 diamonds and 2300 rubies, sapphires and topaz.

For the Laws too, Burma has been a golden land. As the organisational chart shows, their major joint venture partners are various Kuok Group companies such as Shangri-La, Traders, Kuok Singapore and Kuok Malaysia. They are also busy building many projects for other Singaporean firms. The Law family's two major enterprises are the Asia World Company and Kokang Export, Import and Construction. Dateline has obtained this profile prepared by the Law family's Asia World Company (AWC). "The AWC is instrumental in the structuring of the Kuok group's Traders Yangon and Shangri-La projects, the company holds a 10% option on those projects". The 1995 Myanmar Fund report confirms a shareholders' agreement to grant a 10% equity in the Traders Hotel to Kokang, Export, Import and Construction at any time before the hotel opens. On the Shangri-La Hotel itself, the Asia World profile says the Shangri-La Rangoon will be the biggest of all investments made by the Asia World Company as US$200 million is in the appropriation of the project. Dr Sein Win is Burma's Prime Minister in exile and colleague of democracy leader Aung San Suu Kyi. In Australia earlier this year, he raised serious questions about drug money spilling into legitimate business in his native Burma. He was particularly worried by the millions of dollars generated over the years by Lo Hsing Han and Khun Sa.

Dr Sein Win, Burma's PM in exile

Well, it is difficult to say exactly but when it comes to those guys who we know they are drug lords for over time and they have invested heavily in hotels and all those business, then we have a very strong suspicion that these are the money laundered, these are the drug money. You name this Law Sit Han, he has a hotel business and is very close to the generals, especially Khin Nyunt, so we have a strong, strong suspicion.

Now the last piece of the puzzle, the Singapore connection. Raffles City Shopping Centre is quintessential Singapore. On the 38th floor is the head office of Singapore's most secretive financial institution, the Government of Singapore Investment Corporation, GSIC. No Singaporean academic or economist would be interviewed about the GSIC for this programme, so I turned to Dr Gary Rodan, from the Asia Research Centre at Murdoch University in Western Australia.

Dr Gary Rodan, Asia Research Centre, Murdoch University

The track record of the GSIC is one of, er, being quite successful in financial terms, so it's certainly very careful about choosing its partners. It would appear to be, with very few exceptions, one would have to say from the information available that the decision-making appears to have been very astute in financial terms. I don't think they make decisions lightly. The evidence would seem to be that the GIC is very well-informed and careful about how it invests its money.

Singaporeans should know what the GSIC does with their money. Most of the $100 billion in reserves, invested by the GSIC in other companies, were accumulated through Singapore's compulsory superannuation fund. However, the operations of the GSIC are effectively a state secret. It is not required to publish annual returns nor report to Parliament.

Dr Gary Rodan

Although there is accountability, but it is internal. It is not public accountability in the general sense, except that there is an indirect reporting through the Budget. I don't know any detail what the GIC is up to, to know whether they have anything to hide. I think the point that some of the critics of the secrecy or apparent secrecy of the GIC would make, is that no one is in a position to say one way or the other whether that this is the case.

However, there is one GSI investment we do know something about. Shares in the Myanmar Fund were listed and trading began on the Irish Stock Exchange in early November 1994. The fund's largest shareholder at the time was the Government of Singapore Investment Corporation with 500,000 shares or 17.2%. And the GSIC's involvement was a matter of public record. More than that, the fund's document show that GSIC played a role in managing the fund. "After the placing, Mr Eddie Taw Cheng Kong will represent the Government of Singapore Investment Corporation, as the core shareholder, on the investment committee. The committee will determine whether investment proposals are viable and whether they should be approved for investment by the fund". But then something interesting happened. In just 6 weeks after listing, the Government of Singapore Investment Corporation went from being a core shareholder to having no shares at all. Instead, another company, Ince & Co, appeared on the register with 17.2%, the same level previously held by the GSIC.

Tom Healy, Chairman, Irish Stock Exchange

Our requirements are such that when a fund becomes aware that somebody has sold a part of the fund, more than 3%, that they must inform the Irish Stock Exchange immediately. This wasn't done in this case. We became aware of it only in the annual report for 1994 was submitted to us a couple of months ago.

While the Government of Singapore Investment Corporation is no longer listed as a shareholder, Myanmar Fund director, Jeremy King, is under a different impression. He told me by phone from Hong Kong that he believed the GSIC remained a shareholder. He added it was still on the Myanmar Fund's investment committee, although he said, the committee was not formally constituted. This firm understanding by a Myanmar Fund director is hardly consistent with the disappearance of the GSIC holding from the register. Dateline tried to contact the current owner, Ince & Co, but on the share register in Jersey, their address is given as c/o the Morgan Guarantee Trust Company of New York, Post Office Box 1479, Church Street Station, New York. It's what bankers call a street address, and you can't get much more anonymous than that. If the Government of Singapore Investment Corporation is still involved with the Myanmar Fund, as Jeremy King believes, then the propriety of such a link must be questioned. While there is nothing illegal about the Fund extending a 10% option to a company associated with drug lord Lo Hsing Han, it does raise important questions of integrity.

Dr Sein Win, Burma's PM in exile

They may say that it is a legitimate to make business when businessmen come and have a joint venture. But if you have a legitimate business with the drug dealers, then it is a very very funny case. We know the background of Lo Hsing Han or we know about the background of Khun Sa. Their background is not a rich parents or they get from some trade to get them money. So, if they, even if they invest, where do they get the money. From the drugs.

All Singaporean companies must be licensed here at the Registrar of Companies. We went to find out what's on record about the unobtrusive GSIC. Each time I typed in a variation of Government Investment Corporation, the computers at the Registrar of Companies kept repeating "no data available". At the counter, I was told, this is not for public checking. One has to write a letter. The next day, I was given a print out of the GSIC's basic profile. The Directors include the former Prime Minister and now Senior Minister Mr Lee Kuan Yew; his son, Deputy Prime Minister, Brigadier-General Lee Hsien Loong; respected politician, public servant and businessman, Mr S Dhanabalan; GSIC Managing Director, Mr Lee Ek Tieng; the Finance Minister, Dr Richard Hu and Deputy Prime Minister Tony Tan. It's Singapore Inc personified. It was generally believed that the Prime Minister of the day would be Chairman of the GSIC. However, Prime Minister Goh Chok Tong isn't on the Board.

Dr Gary Rodan

At one level, it is not surprising that Lee Kuan Yew would continue to be the Chair of the GSIC, after he's moved out of the Prime Ministership and become the Senior Minister because one of the things that Lee Kuan Yew has done a lot more of since he's been the Senior Minister, is to travel abroad to play a very high profile role in the attempts by the Singapore Government to promote off-shore investment in general from Singapore, not just involving the GSIC.

I first saw the response to the questions raised by Singapore's investment in the Myanmar Fund from Mr Lee Kuan Yew, who is Chairman of the Government of Singapore Investment Corporation. He is too busy at the moment and he declined. Then I sent a list of questions to the Managing Director of the GIC, Mr Lee Ek Tieng. He refused to answer those questions. So next we approached the Deputy Prime Minister Brigadier-General Lee Hsien Loong. His staff said that if the GSIC would not comment, then it was inappropriate to ask a Board Member to do so.

Drug traffickers are always executed early on a Friday morning at Singapore's Changi Prison. In fact on the 27th of September, 6 were hanged in one morning, taking the 1996 total to 35. In 94, 54 were executed, and last year 52, that is one person a week hanged for drugs. Singapore's penalties are some of the toughest in the world, including a mandatory death sentence for anyone convicted of possessing 15g of heroin or 500g of cannabis. Take the case of 28-year-old Indonesian, Abu Hari Hami. His boss was a marijuana supplier and Abu Hari was unfortunate enough to take a package from him and hand it on to an undercover police officer. Mr Abu Hari was convicted for possessing 590g. His appeals were dismissed, and now there is only the petition for clemency.

Dr Sein Win

That is what that makes us very surprised. That is, when you look at this, the bottom line is the small people got caught and was hanged and the big fish go on and swimming very well.

Meanwhile the Myanmar Fund has taken a 25% option in another Law family company, Asia World Industries Company. The parent Asia World Group has won the $33 million deal to upgrade the road from Lashio in the mountainous Shan state to the Chinese border in Luixi. A Singapore-based consortium, Sinmardev, will build a cargo port southeast of Rangoon at Thilawa. The

Shangri-La will build 2 blocks of service apartments next to the hotel. The

Myanmar Fund would have a 5.5% equity. Traders' Square, multi-purpose commercial development, adjoining the hotel, would be finished in 1999. The Myanmar Fund will take 5.5%. There is no slowing in Singapore's push into Burma. As each week passes, more supporters of democracy leader Aung San Suu Kyi are detained or jailed, as Singapore pursues its policy of dealing with the military regime. This is called constructive engagement and its proponents claim it will eventually lead Burma to greater openness, freedom and eventually democracy. Democracy activists argue that it only serves to bolster the regime, conferring legitimacy on the illegitimate. Singapore may learn it is not just good enough to be clean and green at home. The island state's reputation will be made or lost by those it chooses as its regional partners.

Paul Murphy:

Mike Carey with that report. Kate Gunn provided the research and production assistance and Andrea Lang was the editor.

(Please note that this is not an official transcript obtained from SBS Television.)