World Bank Sees Big Risks In Singapore Biomed Drive

"Singapore's multi billion-dollar campaign to develop a biomedical sector and create new sources of revenue is failing to yield any significant payoffs so far," two prominent World Bank economists said. The economists, authors of a new book about industrial policy in East Asian cities, said Singapore has only a 50/50 chance of succeeding, but the move is a gamble it must take to maintain economic prosperity in the face of growing competition from low-cost neighbors such as China.

'We don't see the pay-off yet. The real pay-off is when Singapore companies are turning profits and going for IPOs,' Shahid Yusuf said on a call from his office in Washington DC. 'The pressure is building for Singapore to have some success stories,' he said, noting that Singapore did not have any internationally known drug companies. Over the last 5 years, Singapore has plowed more than S$3 billion ($2 billion) into its biomedical sector, official data show. Some estimate as much as S$5 billion has been committed. "¦ 'Around the world, biotech is still more promise than profit as of yet,' said Yusuf. Despite the lack of success so far, the authors highlighted the potential for huge dividends later. Kaoru Nabeshima said the pharmaceutical industry held great potential for economies such as Singapore, India, China, South Korea and Taiwan. "¦ But the risk of a fizzle is high. "¦

Yusuf and Nabeshima said that Singapore should diversify its portfolio to include implantable devices such as cardiac pacemakers, diagnostic instruments such as influenza test kits and vaccines, which bring in profits in 5 years rather than 10. Pressure to roll out new products fast may also work against the country. Scientists could be too focused on commercialization and labs may jealously guard intellectual property, unlike in the US where products are often discovered in university labs rather than by privately-funded research. But Singapore does have certain leverage as it has already attracted some major pharmaceutical firms such as GlaxoSmithKline and Pfizer. They have become major exporters but big swings in output can make economic growth volatile. "¦" [Reuters News/Factiva]

By World Bank