Singapore: The Lion City lightens its touch

Singapore has recently stepped up a gear in its drive to become Asia's premier international financial centre -- unveiling a raft of initiatives to stimulate the domestic capital markets, encourage greater participation from international borrowers and investors and establish the island state as the leading regional hub for fund management and investment banking. Some say the renewed drive has been sparked by the Asian crisis, which has drawn attention to Singapore's relative strength and stability and left many Asian economies with vast financing needs. Others say it is because the Singapore government misjudged the likely effect of Hong Kong's handover to China, and is having to battle harder than ever to compete with its long-standing rival to the north. Whatever the motive, there is no doubting the extent of Singapore's ambitions, the progress that has already been made and the speed with which the government is prepared to act to facilitate its aims. But what is less clear is whether a city famed for its authoritarian attitudes can ever develop the laisser-faire culture necessary for international capital markets to thrive -- or whether there is enough business available to justify international financial institutions stepping up their presence. Jackie Horne reports.