Embeddedness and Restructuring: Case Studies from Singapore

Abstract

Free market ideology has continued its hegemonic reign notwithstanding considerable opposition. Under capitalism, the relationship between the political and economic realms is intricate. This inquiry on corporate restructuring in Singapore between the late 1990s and the early 2000s scrutinizes how a dominant state collaborated with the multinational corporations to reconstitute their accumulation regimes to outlast the business cycles. Based on six cases, the findings underscore the critical role of the state on the subject of restructuring. The peculiar configuration of the relations between the state and labour in Singapore shaped how they negotiated the restructuring process with the companies. While those involved reckoned that training, research and technology were pivotal, the foregoing were not the panacea that optimistic consultants had made them out to be. The interactions among capital, labour and the state remained the underpinnings of solutions.

Key Words:

• Multinational corporations
• MNCs
• restructuring
• free market
• embeddedness
• Singapore
• capitalism

Notes

¹ The CPF is a compulsory savings scheme into which an employee and employer make monthly contributions to provide income for retirement. Contribution rates from employers are currently 14.5%, 10.5%, 7.5% and 5% of the wages correspondingly for employees aged 50 and below, 50-55, 55-60 and above 60. On the other hand, employees aged 50 and below, 50-55, 55-60, 60-65 and above 65 years pay, respectively, 20%, 18%, 12.5%, 7.5% and 5% of their salaries (Central Provident Fund Board, 2008).

²Under the Skills Development Levy (SDL) Act (Cap. 306), it is a statutory requirement for employers to make contributions for employees who fall beneath the salary ceiling. According to SDF EasyNet (2008), “[t]he SDL is also payable for employees such as casual, part-time, temporary and foreign workers rendering services wholly or partly in Singapore.” With effect from 1 September 2005, the new legislation has raised the upper limit for SDL contributions from S$1800 to S$2000. The levy rate remains at 1% and a minimum of S$2 is payable where remuneration is less than S$200. The SDF is under the Workforce Development Agency (SDF EasyNet, 2008).

³US$1=S$1.43, 15 September 2008.

⁴The names of these case-study firms are pseudonyms.