Six years after leaving a diplomatic posting in Singapore for Australia and two years after returning from the Asia Pacific to Europe for good, a trip through Malaysia with an extended stay in Singapore confirms old answers but also raises new ones, in line with democratic, economic and social changes within the old Federation of Malaya.

One perennial question concerns the character of the Lion state. Is it a special case based on size, history and geography or is it a sort of lab where you witness 'en miniature' what Asia can look like when released from traditional bonds and if no major interruption brings the rise of the Asia Pacific to a halt?

Any foreign envoy who has served in Singapore will have tried his hand at this one. Their answer will most often come down on both sides of the question, and not just because they are diplomats.

Like other Asian states before it, including most of its South East Asian neighbours, Singapore is slowly and belatedly moving towards a more open political system. To be sure, 'the Party' still dominates. The old man is still alive, his son is securely in the driving seat and the family is still untouchable. But the rapidly increasing middle class, especially the younger generation who know 'Kampong life' only from visits to less developed parts of neighbouring countries, is restless. Rising inequality, the great blemish on Asia's growth story, is in evidence in Singapore too. It's on a higher level than next door, of course, but bad enough that the vote percentage of the governing party is probably fixed on a downward trajectory. Prime Minister Lee Hsien Loong, in a recent FT Weekend portrait, talked about a possible future coalition government; his retraction in the next day's Straits Times appeared unconvincing.

In many countries, including in Southeast Asia, a coalition government would not be considered unusual. Not so when Singapore's PAP (People's Action Party) is involved. It has governed the country alone since independence. But the times in which the PAP always knew best are apparently over. According to all political observers I talked to, Singaporeans and foreigners alike, PAP's policies have taken on a decidedly populist edge, ranging from the seizure of hallowed golf courses hitherto reserved for the rich to entry restrictions for foreign workers.

Thus, with regard to future political developments, the question of whether Singapore is a special case or an Asian forerunner takes on special significance. The answer will either echo through the continent (democracy is indeed inevitable after the material hunger is stilled) or be shrugged off by larger countries who put democratisation in Singapore down to 'over-Westernization'.

Temasek is one of Singapore's two sovereign wealth funds. As it is also a relatively open transnational company (at least compared to other large SOE's and parastatals in Asia) it can be considered a bellwether for investment behaviour by serious Asian capital. Temasek has recently shifted some of its investments from the international financial sector to more visible engagement in the production of consumer goods, thus placing its bets on a global rise of the affluent consumer. It is also buying into African equity, confirming that continent's positive outlook as a rapidly rising market. Here again, whether a Singaporean move signals a much larger Asian follow up is of considerable interest.

Due to its tiny size, there are two areas where Singapore is particularly dependent on international cooperation in general and on willing neighbors to lend a cooperative hand in particular. First is the environment, where the Dutch are busy counseling their fellow lowlanders on how Singapore can cope with potentially rising sea levels.

But intricate engineering feats will not be enough with regard to Singapore's air pollution problem, which stems from slash burning for rubber plantations on neighboring Indonesian islands. Earlier this year, haze from across the Straits once again made Singapore's skyline disappear and a bad pollution day in China's industrial heartland look tame in comparison. Despite the much ballyhooed bilateral cooperation between Jakarta and Singapore, the pollution gets worse every year. The Indonesian Government's ability and will to move against the rubber barons is more than uncertain, but as a thoughtful old friend who is dedicating his professional life to green causes remarked to me, 'we in Singapore are just as guilty since it is us attracting the industrial interests behind the fires to our shores with all kinds of fiscal perks and loopholes'.

On a more upbeat note, bilateral cooperation seems to work quite well with regard to the Iskandar Development Region just across the causeway between Singapore and Malaysia. The advantages for both sides are evident. Kula Lumpur provides the one precious good Singapore does not have (space), in exchange for ceding some sovereignty to attract what its neighbour has in abundance: capital, know-how and due process of (commercial) law. Once again, the question is whether Iskandar Malaysia will serve as a path breaker for trans-border cooperation in other parts of the Asia Pacific.

In a totally different development sector, Singapore continues to be a shining but unfortunately lone Southeast Asian example of religious peace and basic racial harmony. This is admittedly an easier task for tiny Singapore than for giants such as Indonesia. It is furthermore true that the positive result in Singapore have only been attained due to robust social engineering.

However, there is no question that the creeping Islamisation of everyday life in Indonesia, Malaysia and to an absurd extent Brunei (re-introduction of lapidation!), raises justified fears both within national minority communities in those countries as well as with those from the outside wishing to live and invest in these promising emerging countries.

It would be ironic indeed if the vicious circle well known from the Middle East were to be repeated in Asia, where Islam is traditionally less austere: a downward spiral where autocratic and deeply corrupt regimes, having lost all credibility with their own citizens, embrace an orthodox interpretation of religion, only to be swept away later by the forces they encouraged.

Photo by Flickr user William Cho.