For several years in the early 1990s, Latin passion was on full display on silver screens across the world. Pedro Almodovar Caballero got the ball rolling with his dark comedy, Tie me up! Tie me down! The fever was further reinforced by Bigas Luna’s “Trilogía Ibérica”, a trilogy of films presenting the juxtaposition of old and new in Spain together with the odyssey of emotional contrasts of erotic desire and food. Along the way, the directors picked up numerous industry honours, and the stars of these films, Antonio Banderas and Penélope Cruz, won international fame and made the successful crossover to Hollywood.
In a way, the stories told by the films are a release of Spain’s own imagination, creativity and desire following the death of dictator Francisco Franco Bahamonde in 1975. A democratic system took its tentative steps and was only consolidated in 1982 when a transfer of power took place.
In hindsight, it is hard to fathom that happened more than three decades after Singapore was able to directly vote for legislative representatives in 1948. After all, Spain, with more than 45 million people, has a long, rich history, culture and industry perhaps most represented by Seat cars of old — earning it the second largest carmaker of Europe title. Its overall economy of US$1.4 trillion ($1.89 trillion) is more than three times larger than Singapore’s and is ranked the 14th largest in the world and fourth in the EU.
In a way Spain bears some similarities to South Korea in Asia, whose democratic system was relatively new as well — former general Chun Doo-Hwan allowed elections only in 1987. South Korea’s economy has only grown stronger since in numerous aspects, overshadowing Japan. Samsung phones command a leading global market share, LG white goods dot households across the world, and Hyundai cars are commonly sighted. And the soft power of K-pop and K-drama permeates cultures and languages.
We know of Spanish fashion from giant Inditex which owns Zara and Mango. Some Singaporeans carry the colours of Desigual or buy Manolo Blahnik. But few of us will know Movistar, a Spanish telco that dominates Latin America and parts of Africa. Banco Santander and Banco Bilbao Vizcaya Argentaria (BBVA) are banks who, like Christopher Columbus of old, found the New World in the Americas, but are only thinly represented in Asia — even if Las Filipinas was claimed by Ferdinand Magellan for Spain’s King Philip II back in 1521. Of course, the Portuguese met the Spanish in the Philippines later on and we then figured out the world was round, not flat. But we (or at least I) do not know enough about the Latin Spanish-speaking world.
Here are some facts. Spanish is the native language in 20 countries, accounting for 7.5% of the world’s population — double that of French; although France has arguably done better to promote itself through its Alliance Française global network, I am told amongst Singaporean students today, Spanish is an increasingly popular third language, eclipsing Japanese and Korean. That may be prescient. If Singapore were to find new markets to trade with, the Latin world — which has always seemed a bridge too far — might just be one of them, with its huge population and market.
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High heels and matadors
That was the thesis of the Spanish hosts of a small delegation of eight Singaporean C-suites referenced in my column in Issue 1023(Feb 21, 2022) who spent a recent week in Barcelona and Madrid. There were plenty of touristy cultural and historical sights, and challenging yet incredibly delicious three-hour lunches and dinners, but our meetings with representatives of Spain’s economic agencies, media groups, tech and trade associations, and venture builders were both engaging and interesting. I left the country marvelling at its vibrant start-up scene, advanced manufacturing prowess and inroads made by its biotech hubs.
We visited the Barcelona Supercomputing Centre, launched just last December. Sited under an old chapel, the MareNostrum 5 (MN5) supercomputer runs as fast as 380,000 laptops. It can process in an hour tasks that will take a “normal” high-performance computer 46 years. It also has more than 50 times the capacity of what we have in Singapore!
Supported by European High Performance Computing Joint Undertaking, this silicon powerhouse anchors and enables R&D of the new gold of the future — data and AI and applications, including digital health and nuclear medicine. Or more simply, it is a bet to make European-designed chips for national security. Catalunya (or Catalonia) itself also has the densest ecosystem for life sciences in Europe specialising in intelligence genomics and accounts for 3.4% of its GDP.
Spain is a beneficiary of the post-Brexit shifts, specifically for multinationals that need to have a Continental Europe headquarters for regulatory reasons. For example, it is interesting to see UK’s AstraZeneca invest heavily in Spain. With the city of Algeciras, the third largest port on the Mediterranean with a close exit to the Atlantic, business from Asia with a pivot or leg in North Africa or distribution to Southern Europe may find Spain a good hub to land. Its focus on green transition and digital transformation together with social cohesion is complementary to Singapore’s interests and desired future growth directions.
Such developments build on the strong grip Spain already has in certain global events, ranging from the Mobile World Congress (usually in late February) to the Smart Cities Expo World Congress in November, a model emulated by Singapore with our version of World Cities Summit in June. It is no wonder that Spain — with its better climate and quality of life, and lower cost than Northern European cities — is emerging as a hotbed of innovation and start-ups beyond high fashion and bullfighting tourism.
Spaniards who had decamped for higher-paying jobs in Germany or other parts of the EU are increasingly returning to buy up real estate or start new businesses. High-value creatives who seek their own Brexit from the UK no longer buy a holiday or retirement home in Andalusia or Majorca. The ones who stay in London’s Canary Wharf fly direct to Málaga. Once famed as a nice Mediterranean city and the birthplace of artist Pablo Picasso, it is known now as a back office and innovation centre for the likes of Citibank, and a hotbed for fintech start-ups. Co-working and co-living — perhaps the future for Millennials and Gen Zs — are already in full swing as digital nomads find themselves a home in any number of its historic cities. Aside from global sports brands like Real Madrid and FC Barcelona, even the America’s Cup has sailed into Spain.
With a strong 2.5% 2023 growth in an otherwise anaemic Eurozone, the Spanish economic renaissance has been supported by young educated locals and digital nomads. In a sign of greater international trade, international hotel chains Rosewood and Four Seasons have anchored in Madrid. It is not surprising that amongst our delegation are representatives from two Singapore Exchange S68 -listed groups having a good look around: one runs niche hospitality resorts and another oversees over 170,000 rooms. The Bulls look like they are extending their run from Pamplona.
Tie Me Up! Tie Me Down!
We used to assume that Singapore’s bilingualism is a key to our success in that we can be that bridge between East and West. That holds when we define the West as the Anglo-Saxon West, given our historical colonial and Commonwealth links. However, such historical ties are probably less valuable than the common legal and tax systems, and most importantly the trust in Singapore’s neutrality, reliability and efficiency in doing business.
In a world that is evolving into friend-shoring economic blocs, the Latin world with its second largest native-speaking population may be another bridge to which we have to establish, and soon. One example is the trade passing through Mexico, from autos to tech, to meet the high demand stemming from the US barriers to entry for goods directly sourced from China.
Whilst we are familiar with global companies and brands listed in New York, and (for some of the conservative among us) London, we are less familiar with the US$133 billion Inditex, US$74 billion Iberdrola, US$68 billion Santander, and US$57 billion BBVA. Beyond these top four listcos in Madrid, a host of others like Cellnex Telecom, Naturgy, and Telefónica are comparable to the market sizes of Singapore Telecommunications Z74 , DBS Group Holdings, Thai Beverage Y92 and Wilmar International F34 .
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The challenge for many of us, even in the institutional space, is that Spain does not feature in many of the indices dominated by US-listed companies, nor is there much non-English stock coverage. And even purely through asset allocation weights are low, much like Singapore.
However, those with local knowledge know there are steady gems and opportunities for growth in public as well as private investments if our entrepreneurs embrace the opportunities. One hopeful thesis is that if we can somehow build a Latin bridge, can we also play the role of a hub for Asia similar to the Anglo-Saxon West for China?
Well, annual bilateral trade between China and Spain has reached EUR43 billion ($57.8 billion) in recent years. In 1HFY2023 alone, Chinese exports to Spain hit EUR22.3 billion — six times more than Spanish exports to China. As our party wondered if there was room to re-export the non-Jamon parts of Spanish pigs through Singapore, I was not surprised to find that on the ground there are second- and third-generation Chinese in Barcelona (whom I encountered 20 years ago when I first visited), or that Chinese tour groups are not back in force. The queues at the Global Blue tax return counters in town and at the airport are mainly made up of FIT (free, independent travellers) this time. After all, the Chinese have for the past decade been able to buy cheap EU residency visas in Portugal for the cost of buying an apartment there.
Olives and olive oil are not essential commodities for Chinese consumers yet. But in central Madrid, I had superb Szechuan food and dumplings. A host of supermarkets, shops and restaurants on the street where I stayed had Spanish proprietors speaking to me in Mandarin (I stuck with English). Even the nail bars and “massage” parlours had (possibly illegal) Chinese immigrants coming out of their shops, asking “Mister do you want”. On Madrid’s Gran Vía, an Orchard Road equivalent, a famous historical building could not be missed with its red and gold “Feliz año nuevo Chino” (Happy Chinese New Year) greetings.
I can’t help but reflect as I return that if we don’t embrace the opportunities still available, with the passion and creativity of the Almodovar films of old: tie these up and lock them down, we will come to regret it. As a start, I hope my next trip there will be direct on Singapore Airlines C6L .
Chew Sutat retired from Singapore Exchange after 14 years as a member of its executive management team. During his watch, the exchange transformed from an Asian gateway into a global multi-asset exchange, and he was awarded FOW’s Lifetime Achievement Award. He serves as chairman of the Community Chest Singapore
