From the cool green towers of Singapore to the new democracy of Timor-Leste, the countries of south-east Asia hold both peril and promise in the quest for sustainable development

If there’s one characteristic that unites the widely divergent nations that make up south-east Asia – Brunei, Burma, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand, Timor-Leste, and Vietnam – it is growth. These nations’ growth rate has averaged 3-6% over the past decade, and is credited with lifting millions out of poverty, creating a new middle class in places such as Indonesia, and attracting the world’s attention and investment.

That growth is considered attractive and desirable, yet in the sustainability equation it definitely has some downsides. Stephen Groff, an Asian Development Bank vice-president, told a recent sustainable development conference: “It is quite clear that in many cases, the welfare of future generations is being sacrificed to support growth.”

Groff named food and energy security, inclusive growth, and environmental sustainability as the three critical challenges facing the region of 11 countries and more than 600 million people. All the nations of south-east Asia face these challenges, and yet they are all at very different stages of development.

That makes the concept of “green growth” popular as a way to transform the fledgling economies as well as the advanced ones. Green growth is a concept that also ties to goals and programmes from the World Bank and USAid, which is important for many of the less-developed countries of the region.

Innovation dash

In Singapore, a small, highly urban enclave of just 276 square miles and a population of more than five million, it’s easy to see one version of sustainability at work. Singapore’s centralised government has worked very hard over more than two decades to foster economic growth with a vibrant high-tech manufacturing base – for example, a third of the world’s hearing aids are made here. Now this densely populated city-state is also aiming to lead in innovation – big data, e-commerce, 3D printing, green building and water management.

Singapore is a popular site for Asian corporate headquarters. Most multinationals have moved manufacturing to cheaper south-east Asian neighbours, yet 44% of multinationals with Asian operations have headquarters here, compared with just 13% in Shanghai. General Motors, for example, recently announced it would shift international operations back to Singapore from Shanghai.

Because of Singapore’s urban density, growth, educated populace, and lack of natural resources, it is almost a microcosm of the problems that nations eventually face as they relentlessly advance in a market economy.

Singapore is chasing green growth studiously. It ranks high on green city lists, and has had a “sustainable blueprint” in place since 2009. The city-state has developed into a leading innovation test ground in south-east Asia – companies from Daimler, the Smart carmaker, to Electrolux with advanced vacuum cleaners, come to Singapore to try out “smart city” products.

Singapore has also had fantastic success in sustainable construction, with the highest rate of green building retrofits and renovations in the world (alongside the UK).

Tan Seng Chai, chairman of the sustainability committee at Singapore’s largest developer, CapitaLand, says the company has lots of evidence for how sustainability is bolstering its bottom line.

“The group registered cost avoidance in excess of S$35m (US$28m) for energy and water utilities since 2009,” he says.

Singapore tries out the new and novel in environmental technology – bamboo-based skyscrapers, for example, and vertical farming to ensure food security.

Singapore is also generally pushing the envelope on water security, taking a four-pronged approach by carefully conserving local catchment water, importing water, reclaiming water, and planning numerous desalination projects. NEWater is the brand name for wastewater that has been treated by Singapore’s Public Utilities Board so that it is clean enough to be drinking water. By 2060 Singapore hopes 55% of its water capacity will be NEWater.

Sustainability hub

Constant van Aerschot, director of the Singapore chapter of the World Business Council for Sustainable Development, says Singapore is on course to be south-east Asia’s sustainability hub. Corporate sustainability reporting increased 77% in 2012; three Singaporean companies are on the Dow Jones Sustainability Index.

Contrast, however, Singapore’s situation with that of the spanking-new country of Timor-Leste. Timor-Leste (formerly East Timor) became the region’s first new country of the 21st century in 2012, gaining its independence from Indonesia.

Almost 40% of the 1.1 million population of Timor-Leste – the eastern half of one of the islands in the Indonesian chain – live below the World Bank’s $1.25 poverty line. That makes its citizens’ annual average income less than the average Singaporean’s monthly income of US$4,900.

As in all less developed countries, the UN’s Millennium Development Goals and participating programmes play a huge role in how development proceeds in Timor-Leste.

The country has only recently transitioned from the effects of its violent quest for independence from Indonesia to steady infrastructure and economic development. Timor-Leste is lucky that it has oil reserves, and has amassed a $14bn oil fund, which the Norwegian government assisted in setting up.

The fund is being used for roads, water and electricity infrastructure development. Of course, oil income is a two-sided coin, as it is non-renewable – it gives the Timorese significant development funds but they must use them to develop away from dependency on a fossil fuel economy, and quickly.

Knut Ostby, the UN resident coordinator in Timor-Leste, says he hopes that governance structures set up in the country will prove rugged enough – corruption as in neighbouring Indonesia is an ongoing problem.

“Like in many other countries, the fight against corruption needs to be continuous and long term,” Ostby says.

Timor-Leste’s low-lying coastal geography makes it – in common with much of south-east Asia – highly susceptible to the negative impacts of climate change. Yet mitigation and adaptation are not easy to dovetail with poverty alleviation. Engineering and consulting company Tetra Tech in its work with USAid is one company that has tried to help the local population establish important land rights as well as understand low-carbon ways to manage property.

Ostby says programmes such as the UN’s Reducing Emissions from Deforestation and Forest Destruction (UN-REDD) are also helping the Timorese embrace sustainable forest management. In addition, a unique partnership between the government, the UN and a private food company Timor Local has tackled hunger and malnutrition via manufacturing a new food supplement called Timor Vita – a mixture of soy, corn kernels, oil, sugar and micronutrients.

Ostby says the government’s determination will be essential to make growth sustainable. “To avoid mistakes from other developing countries, Timor-Leste needs to insist on strong national ownership and leadership in the development process – correctly insisting that development be demand-driven rather than supply-driven.”

That is the only way to ensure that growth is more inclusive, and greener.

An Asian EU?

The chasm between Singapore and Timor-Leste is wide, and may grow wider in 2015, when 10 other south-east Asian nations create the Asean Economic Community, an EU-like structure that allows labour to flow freely and eliminates import taxes.

Timor-Leste has applied for entry into this new political and economic entity, yet there are doubts among the original 10 about infrastructure, civil society participation and human resources capacity in the newer nation.

Whether or not Timor-Leste is included in Asean – the Association of Southeast Asian Nations – and its structures including the Asean Economic Community, pursuing a common sustainability goal in the disparate Asean nations is daunting.

Singapore’s progress is a result of its natural resources and urban density, but also to strict command-and-control governance that is not a hallmark of the other nations. As Asean moves more to an EU-style open market, international supply chain greening and global consumer pressure will be key to keeping sustainability top of mind.

“The new Asean Economic Community will have a huge impact in our region,” says Nick Pisalyaput, sustainability professor at the Sasin Graduate Institution of Business Administration in Bangkok, speaking to German broadcaster Deutsch Welle. Pisalyaput sees danger in the newly opened nation Burma being “pillaged” and says he hopes western consumers will demand responsible business practices through global supply chains.

Nessim Ahmad, director of environmental and safeguards in the regional and sustainable development department of the Asian Development Bank, sees a big role for ADB in sustainability progress.

ADB, Ahmad says, helped fund 57 environmental projects in 2013, which he says was almost half of the projects the bank funded and 40% in terms of amount lent.

“We also try to practise what we preach,” Ahmad says. “We installed the rooftop solar project of 571 KW at ADB headquarters – the largest rooftop solar system in the Philippines. We also switched to 100% renewable energy, allowing us to cut our annual carbon footprint nearly 50% with an emissions reduction of 9,500 tonnes of CO2 equivalent.”

Ahmad adds that the biggest stride ADB sees so far in addressing the region’s development goals is poverty alleviation. But the bank also sees rising inequality even though ADB has adopted inclusive growth in its strategic growth plans.

Islamic values and Islamic financing, especially in Indonesia, may play an increasing role in furthering sustainability regionally. For example, a recent Islamic fatwa was issued in Indonesia forbidding citizens to trade in endangered animals.

Singapore may be called upon to play a bigger role in fostering sustainability among its Asean neighbours. The WBCSD’s Von Aerschot says Singapore is happy to share successes yet is also careful not to presume that its approach will work elsewhere. In green building, at least, there are signs of successful proselytising – Singapore’s green building standard forms the model for similar standards taking off fast in both Malaysia and Indonesia.

“As one of the first listed companies in Singapore to voluntarily publish annual sustainability reports in 2010,” says Tan Seng Chai of CapitaLand, “we hope our efforts and achievements will spur other corporations to begin or accelerate their sustainability efforts.”

Singapore – fast facts

Area 697 sq km
Population (2014 est): 5.57m (2014 est)
GDP (PPP):  US$339bn (2013 est)
GPP (PPP) per capita:  US$62,400
GDP composition:  agriculture 0%; industry 27.3%; services 72.7%
Export partners: Malaysia 12.3%; Hong Kong 10.9%; China 10.8%; Indonesia 10.6%; US 5.5%
Import partners: Malaysia 10.6%; China 10.3%; US 10.2%; South Korea 6.8%
Energy generation by source:  fossil fuels: 99.8%; nuclear 0%; hydro 0%; other renewables 0.2%

Timor-Leste – fast facts

Area 14,900 sq km
Population (2014 est): 1.2m (2014 est)
GDP (PPP):  US$25bn (2013 est)
GPP (PPP) per capita:  US$21,400 (2013 est)
GDP composition:  agriculture 2.6%; industry 81.6%; services 15.8%
Export partners: oil, coffee, sandalwood, marble
Import partners: food, gasoline, kerosene, machinery

Source: CIA World Factbook (PPP = purchasing power parity)

April Streeter is an associate with One Stone. A Certified B Corporation, One Stone has a global team offering sustainability consultancy and communications expertise, based in Stockholm, Edinburgh, Sydney, Portland and Washington DC.

green growth  Singapore  south-east Asia  sustainable innovation  Timor-Leste 

Responsible Business Summit Asia 2015

May 2015, Singapore

Ethical Corporation's Responsible Business Summit Asia is the regional prominent meeting place to find out where business leaders and innovators are headed around their sustainability and CSR strategy - so you can be a leader too.

comments powered by Disqus