Wednesday 20 November 2013

Five facets that explain Singapore's success

By Henri Ghesquiere, Published The Straits Times, 18 Nov 2013

MANY in Singapore understand the multiple ingredients behind the city- state's impressive ascent. But how can we best present this complex recipe to outsiders, be they nations, firms or individuals, so that these audiences benefit from it?

In a recent Straits Times op-ed piece, Professor Kishore Mahbubani, dean of the Lee Kuan Yew School of Public Policy, lists "seven pillars" that support the "soft power" that emanates from Singapore's striking achievement.

I suggest a framework that cuts Singapore's success into five facets.

The first is keen long-term vision. Singapore's leadership grew out of frustration with colonialism, World War II trauma and subsequent struggle - at times violent - for collective survival. The overwhelming goal was to create a prospering, harmonious and secure community, on a par with the West, as quickly as possible. As minister Goh Keng Swee said: "We must strive continuously to achieve economic growth and should not be distracted by other goals." Concurrently, China under Mao Zedong pursued egalitarianism and remained poor.

The second is discipline. No Olympian climbs onto the podium without having applied discipline for years in pursuit of a distant dream. Singapore demonstrated discipline by employing delayed gratification. This involved hard work, saving and investing in physical, human and social capital to reap future benefits. Responsible fiscal policy built reserves and avoided off-loading debt onto later generations. The discipline of the market economy was embraced through international openness, competitive wage formation and a refusal to subsidise loss-making sunset industries.

A lean and meritocratic civil service imposed discipline by rewarding only for performance. Discipline was also inherent in the consistent application of the rule of law. In all: many disciplinary sticks but not without carrots as well.

The third ingredient is opportunity. Singapore created opportunities for participating in gainful economic activity. Quality education was made accessible for all depending on each child's abilities. Subsidised housing, basic health care, public transportation and training empowered workers. The People's Action Party belonged to Socialist International until 1976. In that year, membership was disallowed because of Singapore's alleged illiberal democracy. This happened despite the nation's success in creating equality of opportunity and raising living standards.

Singapore shared opportunities with foreign workers and investors in a mutually advantageous way at a time when international capital was shunned elsewhere as neo-colonial exploitation. There was also a relentless search for new opportunities in sunrise industries or higher-value-added processes.

Incentives, the fourth ingredient, are also important. Singapore's leadership is pragmatic, not utopian. It realises that humans are not saints, but social animals spurred by the yang of survival and the yin of inclusion. Self-interest governs our behaviour unless rules and price incentives align it with collective well-being. Other countries are more preoccupied with fairness. The Singapore Government has empathy, of course, but its prime focus is on averting unintended policy consequences. Soak-the-rich taxation is off the agenda. The specifics of health care and employment policy suggest wariness concerning both the possibility of welfare dependency (of the poor) and entitlement mentality (of the middle class).

The final element is Singapore's holistic approach. Its political leaders are "systems engineers". They do not complain or accuse but work instead to solve problems jointly and creatively. Meshing numerous policy areas assiduously reaps synergies and guards against errors. Achievements such as near-full employment, an attractive investment climate, non-corrupt government and harmonious relations across society require multiple pieces puzzled together attentively.

Facets one and five capture a long-term vision with clear priorities consistently achieved. Items two, three and four can be conveniently remembered as "I DO". This three-letter acronym refers to incentives, discipline and opportunities. As a solemn vow, both words have long stood for commitment. The phrase also reminds us that reports and committees are mere stepping stones. Implementation counts.


The writer is the founder of SingExcel Consulting.

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