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Tue, Feb 01, 2011
Reuters
Key political risks to watch in Singapore

Here is a summary of key risks to watch this year:

Race, religion and migrants

Prime Minister Lee Hsien Loong has identified addressing racial tension as a policy priority.

Considerable progress has been made towards improving race relations since deadly riots in the 1950s and 1960s, but some tensions remain.

The government has repeatedly tried to cool mounting social discontent over foreign workers and immigrants.

The migrant issue is expected to be hotly debated ahead of the general election as more Singaporeans feel migrants are taking low and mid-level jobs away from them. The issue is complicated by demographics.

The majority Chinese population is growing at a slower rate than minority Malays and Indians.

Labour shortages mean the country relies on immigrant workers for many jobs, but the 2009 recession and cultural differences have made many Singaporeans wary of migrants.

What to watch:

- Any sharp rise in racial tensions or unrest. This is unlikely, although there is a small chance that rising religious tensions in neighbouring Malaysia could spill over.

- Growing public discontent about migrant workers. Last July, Prime Minister Lee said Singapore would need 100,000 extra foreign workers to deal with rising labour costs and falling labour supply. He later cut that number to 80,000.

Security

Militants have long had Singapore in their sights. A Jemaah Islamiah (JI) plot for multiple attacks was uncovered in 2001.

Security and policing are far ahead of neighbouring states, but the 2008 escape of al Qaeda-linked militant Mas Selamat Kastari from prison was a lapse that showed security is not infallible.

In July, a 20-year-old Malay Singaporean conscript was served with a two-year detention order without trial on evidence he had become "deeply radicalised" by Islamic extremists through Internet sites supporting armed jihad.

The arrest raised concerns about the potential of Singapore's armed forces by militants.

The port and shipping lane in the Malacca Strait remain two key potential targets, and an attack on them could cause global disruption.

Last March the navy issued a warning of possible militant attacks on oil tankers.

While such an attack could deal a blow to the export-dependent economy and its reputation as a safe haven, the overall risks remain low.

What to watch:

- Assessments of strength and tactics of Jemaah Islamiah and its offshoots. Most analysts believe the main JI movement has abandoned attacks on civilian targets, while a violent splinter group was badly weakened after the death of its leader Noordin Mohammad Top. If this changes, the threat could rise.

- Markets would not suffer prolonged losses from any militant attack unless it signalled the threat level would remain significantly higher. Given the port's importance to Singapore's economy, the impact of a major attack on the facility would be more serious for markets.

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