Friday, 5 May 2017

'New model of governance needed' for Singapore to thrive: Peter Ho

IPS-Nathan Lectures 2016.17: Lecture III - The Paradox of Singapore and the Dialectic of Governance

Ex-civil service head says success depends on Govt working well with businesses, society
By Charissa Yong, The Straits Times, 4 May 2017

Unlike the top-down approach taken in the past, Singapore's future success hinges on the Government working well with businesses and society, said former head of the civil service Peter Ho yesterday.

"The view that 'the Government knows best'... is increasingly challenged in today's world, in which citizens and businesses can easily gain access to much of the information that governments used to monopolise in the past," he noted.

Given the new situation and other changes in the environment, Mr Ho argued that a new model of governance is needed.

He made the point in his third lecture as a Institute of Policy Studies' S R Nathan Fellow for the Study of Singapore, a position that requires fellows to give their ideas on public policy and governance in a series of lectures.

Singapore is already a leader in public policy, so it is no longer enough for policymakers to simply copy and adapt a model of governance from elsewhere, he said.

"For many of the emergent issues that we have to deal with, Singapore will have to evolve its own strategies and approaches."

He boiled down the reason for a new governance model to three factors.

One, the unfavourable conditions at Singapore's birth continue today, despite its success as a sovereign city-state.

"Our success in overcoming them may well have masked the deep challenges that remain, and remain mostly undiminished. This is the paradox of Singapore," said Mr Ho, a senior adviser at the think-tank called Centre for Strategic Futures.

These include Singapore's small size, making it vulnerable to climate change and rising seas, and its water scarcity, which not many Singaporeans grasp fully, he said.

Even Singapore's status as the world's second busiest container port is not secure, he told an audience of about 200 officials and students at the National University of Singapore.

The country is constantly being put to the test by regional competitors or technological advances like 3D printing, which will reduce the need to move goods.

Two, the world is complex and fast-changing, a challenging state addressed by Mr Ho in his previous two lectures.

This complexity means that trade-offs when deciding on public policies are much more difficult to make, because each option may lead to unintended consequences.

Three, citizens and businesses today have far higher expectations of the Government than before.

One reason is that after people's basic needs of food and housing are met, they demand that their more complex needs, like being empowered to reach their full potential, be addressed, he said, referring to Maslow's hierarchy of needs.

Another reason is that today's young adults, who are more educated, have known only the affluence and success of Singapore.

"What persuaded their parents and grandparents will not wash with the third generation," Mr Ho said, adding that fresh arguments and new ways are needed to communicate with this generation.

The Government can design better policies by looking at issues from the citizens' perspective, compared to using "the usual top-down approach", he added.

To its credit, the Government has found ways to engage the private sector and is starting to take engaging people seriously, he said during the question-and-answer session.

Mr Ho pointed to how the Government consults the business community in its wide-ranging economic reviews, and spent a year listening to people in its 2013 Our Singapore Conversation feedback drive.

But engaging people early is important, he said.

It is not as if they do not understand that decisions have to be made and which may not please everyone, he added.

"What they want is to be involved in the process, and it means the Government must engage early, not late in the day."

Little Red Dot or the Apple of Nations?
This is an excerpt from a IPS-Nathan lecture by Peter Ho, senior adviser to the Centre for Strategic Futures. The former head of civil service is the 2016/17 S R Nathan Fellow for the Study of Singapore. He talks about how citizen empowerment and changing expectations require governments to adapt. They must shift from a model of delivering 'government to you' and 'government of you' to 'government with you'.
The Straits Times, 5 May 2017

In 2010, my friend, the futurist Peter Schwartz, described Singapore as the "Apple of Nations".

He was not using apple in its idiomatic form, but favourably comparing Singapore as a nation to Apple the company, which was then - as now - an inspiring paragon of innovation.

Apple is famous for its innovative and revolutionary products. Many think that this year, Apple will become the first trillion-dollar company in terms of market cap.

It was high praise from Schwartz. But of course, it begs the question of whether we can truly be the Apple of Nations, or whether we are in reality just a Little Red Dot.

Schwartz, who is no rosy-eyed admirer of Singapore, also warned: "The difference between Apple and Singapore is that the people of Singapore don't know how good they have it. They don't know just what a remarkable entity has been created here. They don't share yet that sense of passion that the people at Apple do."

This concern was echoed in Prime Minister Lee Hsien Loong's 2016 National Day Rally speech, when he said: "What I would like to have is that we be blessed with a divine discontent - always not quite satisfied with what we have, always driven to do better.

"At the same time, we have the wisdom to count our blessings so that we know how precious Singapore is and we know how to enjoy it and to protect it."


Thrust into an unwelcome and unwanted independence (in 1965), the Singapore Government was in a hurry to turn the precarious situation around, and to transform Singapore into a "modern metropolis", in the matchless pledge of Mr Lee Kuan Yew in 1965.

So, it is not surprising that in the beginning, governance in Singapore was characterised by big government - if you will - through strong regulation, seeking compliance with policy rules, and maintaining as efficient a system as possible, in order to get things moving and to get them done.

Through this approach, the Government embarked on a number of major initiatives that helped to lay the foundations for Singapore's prosperity and stability.

These included a massive public housing programme; heavy investments in infrastructure - in public transport, our port and airport; and an activist, government-led approach to attract foreign investments and build up the capabilities to support higher value-added activities.

In these and many other policy domains, the visible hand of government was as critical as the invisible hand of markets.

The Government's interventions enabled new markets and industries to develop. They also helped to ensure that economic growth throughout the 1970s and 1980s benefited all segments of the population.


Today, citizens and businesses alike have far higher expectations of government than before. Access to information has increased dramatically in scope and speed as a result of the Internet revolution.

Social networking platforms like Facebook, YouTube and Twitter have empowered citizens to express their views. Virtual communities are beginning to shape the debate and context of public policy issues.

The view that "government knows best" that perhaps characterised the situation in the beginning is increasingly challenged in today's world, in which citizens and businesses can easily gain access to much of the information that governments used to monopolise and control in the past.


Today, the quality of government in Singapore is routinely listed at the top of a host of global rankings. That Singapore is already operating at the leading edge in many areas of governance means that it is no longer enough for Government policymakers just to copy and adapt from elsewhere.

For many of the emergent issues that we have to deal with, Singapore will have to evolve its own strategies and approaches. To achieve real breakthroughs, the Government will have to depend more and more on its own innovations.

And as a result, the Government will have to assume new levels of entrepreneurship with its attendant risks and uncertainties. A government that explores will also at times have to sacrifice some degree of efficiency in service of discovery. And it will need to become expert at conducting bounded experiments.

Indeed, the emergent, complex issues of the 21st century suggest the need for a new paradigm in governance - one that is Whole-of-Government, networked, innovative, exploratory and resilient in the way it confronts the challenges of our time - challenges rooted in complexity and accelerating change.

What is the appropriate model of governance for Singapore going forward?

The coming years will see a growing need for governance - which requires collaboration across the public, private and people sectors - rather than government acting as the sole, or dominant, player.

Today, the Government faces a myriad of complex public policy issues in which the trade-offs are much more difficult to make, because each could lead to unintended consequences and risks. Many of these public policy issues exceed the capacity of government working alone. Instead, they require the active contribution of private and people sectors.

A government-centric approach focused on efficiency and productivity will likely give way to a broader approach that leverages on the collective capacity of non-government actors, in order to achieve results of higher public value and at a lower overall cost for society.

How government interacts with the private and the people sectors will in turn determine how big a role each of these sectors will play. It is often overlooked that the Singapore Government has been a world leader in the engagement of the private sector.

A succession of five economic reviews - the Economic Committee of 1986, the Committee on Singapore's Competitiveness of 1998, the Economic Review Committee of 2003, the Economic Strategies Committee of 2008 and, most recently, the Committee on the Future Economy of 2016 - saw the public and private sectors coming together every few years to produce far-reaching policy recommendations for Singapore's long-term economic competitiveness.


A major factor that determines the size of our government has been our belief that free market forces should determine prices and economic outcomes. This is the approach that is the foundation of small government.

But in Singapore, faith in the market has not been uncritical or absolute.

Instead, the Government recognises that in certain cases, unfettered market forces can result in excessive volatility, negative externalities and under-provision of merit goods, like education, as well as public goods, like defence.

The economist Dani Rodrik outlined a framework that can be usefully applied to understanding how Singapore has chosen to blend the work of markets and government.
- First, the Government has sought to enable markets. This includes ensuring rule of law, property rights and public infrastructure - functions that most governments perform. In Singapore, enabling markets has also included industrial policy and capability development, subjects of some controversy in policy circles around the world, especially among proponents of small government that believe in the laissez-faire approach.
- Second, the Government has sought to regulate markets. This includes supervision of the financial sector, competition regulation and taxation of negative externalities, such as high charges for car ownership and road usage, and sin taxes on alcohol and tobacco products - and maybe in future, taxes on sugary drinks. But a key feature of Singapore's approach has been the shift towards lighter regulation accompanied by risk-based supervision, most recently exemplified by MAS' (the Monetary Authority of Singapore's) fintech regulatory sandbox.
- Third, the Government has sought to stabilise markets. This is the bread and butter of macroeconomic management. Singapore's basic approach in monetary and fiscal policy is not far different from global practices. But its efforts to address asset price inflation and credit crises are interesting examples of targeted interventions that harness market forces.
- Fourth, the Government has sought to legitimise markets. Globalisation, free trade and open markets lead to significant dislocations. Some of the sharpest debates over the role of governments centre on this: To what extent should governments facilitate adjustments, redistribute incomes or provide social safety nets, so as to maintain public support for market-oriented policies?

Complementing government and markets is the role that society will play in tackling the great challenges and wicked problems of the 21st century.

A key part of this governance process will be growing mutual engagement between the public and people sectors.

In his 2011 National Day Rally, Prime Minister Lee Hsien Loong underscored the importance of such engagement, pointing out that the nation needs to "harness diverse views and ideas, put aside personal interest and forge common goals". This is especially important because people's expectations have changed - and are changing, continuously.


I think there are a couple of reasons for this development. The first reason is that as government policies lead to improvements, the needs of the people change in tandem.

This is explained by Maslow's Hierarchy of Needs. Maslow's proposition was that after the basic physiological needs of a person are met, more complex psychological needs will have to be fulfilled.

At the top of this hierarchy of needs are the need for self-actualisation, which is to realise the individual's potential, and transcendence, which is helping others achieve self-actualisation.

So, if you accept this proposition, then after government has delivered on the basic needs of food, security, shelter, transport and health, expectations of the people are going to change, not in demanding more of the basic needs, but in fulfilling their more psychic needs in the upper reaches of Maslow's hierarchy, including social, emotional and self-actualisation needs.

The challenge for governments everywhere is that success in delivering the material goods of life - housing, food and so on - is no guarantee that it can be successful in delivering "the good life", however defined.

I suppose the reverse is true as well, although it is hard to imagine the good life without the basic necessities of liveability.


The second reason is what I term the third-generation effect. Singapore is now 51 years old and into its third generation of Singaporeans. The first generation of Singaporeans lived through the turbulence and uncertainties of Merger and Separation. The next generation started life on a firmer footing, but at the same time imbibed from their parents a sense of the vulnerabilities. But the third generation of Singaporeans have known only the affluence and success of Singapore.

For them, the uncertainties of the 60s and 70s are abstractions from their school history books. When their grandparents speak of the turmoil and danger that they experienced, they shrug their shoulders because it is an experience outside theirs. Of course, they are hardly to blame for this, and they certainly need not apologise for it.

Singapore's founding generation made the sacrifices in order that their children and grandchildren would enjoy peace and prosperity.

But clearly, what persuaded their parents and grandparents will not wash with the third generation. But as long as we are all in this together - and I hope that they feel they are in this together - the hopes and dreams of our youth must also appreciate the tough realities that endure. By all means, dream, but dream with your eyes wide open.

So, communicating to the third generation will require fresh arguments and different approaches.


Citizens today feel empowered, because of the social media and higher levels of educational achievement. Indeed, Singaporeans today are much better educated than their grandparents. In 1965, the cohort participation rate for university education was a minuscule 3 per cent. Today, it is 30 per cent.

The non-profit group Ground Up Initiative (GUI) points precisely to how attitudes are changing in Singapore. GUI operates a 26,000 sq m "Kampong Kampus" space in Khatib, with the aim of reconnecting urbanites to the natural environment. The group's founder, Mr Tay Lai Hock, said: "I think the top should set the example, but I also believe, you first and foremost, must take responsibility for your own life...Don't blame anybody. Don't blame the Government... I have a choice to decide that even though they have made this policy, I don't want to be a victim of their policies."


In 2011, the Land Transport Authority announced plans to construct a road that would cut through Bukit Brown, the oldest cemetery in Singapore. Heritage groups protested, while the Government maintained its position on needing land in land-scarce Singapore.

When Bukit Brown Cemetery was placed on the World Monuments Watch in 2013, one member of the group All Things Bukit Brown said: "I hope it shows that we are serious, that we want a seat at the table, just so we can present what we have heard from the community, what we have heard from the people who have encouraged us... You want development, but let's have a discussion, perhaps."

The Government has to deal with an electorate that feels empowered, demanding and actively seeks participation. In this regard, Our Singapore Conversation, launched in 2013, signalled the Government's commitment to listening to the people's views.


By looking at issues from the perspective of end-users - namely the citizen - the government is able to design better policies than if they were just developed using the usual top-down approach.

During the 2013 haze, experts had advised the Government to consider releasing another indicator besides the Pollutant Standards Index (PSI) readings: the PM2.5 readings, which measure particles smaller than 2.5 microns. This is because PM2.5 particles greatly affect people with heart disease, as well as children and the elderly.

When the haze began, the Government published the three-hour PSI readings and 24-hour PM2.5. But netizens and doctors pointed out that the PSI did not factor in PM2.5 readings as air quality indicators.

Members of the public also expressed concern that the PSI values appeared different from what they had observed. Singaporeans even resorted to taking their own real-time air quality readings with commercial equipment.

The Government said at first that it would be confusing for the public to have too many figures to read.

But in the end, because of persistence of the public, NEA (the National Environment Agency) began providing more information on PM2.5, and from June 20, 2013, publishing the PSI and PM2.5 figures hourly, six days after the haze began. And eventually, from April 1, 2014, Singapore moved to an integrated air quality reporting index, with PM2.5 incorporated into the PSI as its sixth pollutant parameter.


I have spent some time explaining how and why society in Singapore is evolving, and how government itself has to evolve in tandem. Put simply, it means a shift from the paternalistic and interventionist "government to you" and "government for you" to "government with you".

The imperative is for government to move towards a collaborative approach to policy-making, and be prepared to connect, consult, and co-create with the people and the private sectors.

Peter Ho's fourth and final IPS-Nathan lecture, titled The Future: Governance, Unintended Consequences and the Redemption of Hope is on May 17.

IPS-Nathan Lectures 2016.17Lecture IV - The Future: Governance, Unintended Consequences and the Redemption of Hope

Singapore 'can reinvent itself with new tech'
Even city-states can influence and shape their operating environment:Ex-civil service chief
By Charissa Yong, The Straits Times, 18 May 2017

Singapore may be small but with new technology, it can shape a future that transcends its physical size and enlarges its identity, the former head of the civil service, Mr Peter Ho, said yesterday.

Citing three countries that have re-invented themselves in the digital age, he urged Singaporeans to adopt a more hopeful view to balance the prevailing attitude that Singapore is a price-taker.

He made the call in his last lecture as the Institute of Policy Studies' S R Nathan Fellow for the Study of Singapore. The lecture series explores Singapore's future.

Ideas that can inspire Singapore exist in Estonia, Denmark and Luxembourg, Mr Ho said.

Estonia, with 1.3 million people, introduced e-residency. It now has 18,000 such residents who are not citizens of Estonia, but they can set up companies based in the Baltic nation.

This scheme helps Estonia generate business for its companies, from independent contractors to small companies with clients worldwide.

Denmark, with 5.7 million people, is mulling the creation of a Silicon Valley Ambassador to better engage digital companies such as Apple, Google and Facebook.

"This is almost as if technology was its own country, unlike the present," said Mr Ho. The idea is for the ambassador to work with big companies on issues such as privacy and fake news, and perhaps influence their positions.

Luxembourg, with fewer than 600,000 people, is creating a market by letting companies own resources obtained from space.

These are ideas to consider, Mr Ho told officials and students at the National University of Singapore.

Singapore does not have to be at the mercy of forces which it thinks are beyond its control. "Because we are a small country, we often speak as if the future is a car speeding towards us - we can swerve, or we can run backwards. But we cannot control the car."

However, "even small city-states can influence, shape, and even create, not just markets but also their operating environment", he said.

Mr Ho gave two reasons for his optimism. First, Singapore can experiment with policies and roll them out more easily because it is small. It can also correct its course quickly if a policy was wrong or misguided.

Second, Singapore has experience in responding to complexity and uncertainty, and can draw on it. As a newly independent nation, it eschewed import substitution, courted multinational corporations and chose multicultural meritocracy when its neighbours were going for the opposite.

But Singapore has to have the courage to seize this hope and reinvent itself, added Mr Ho, who is now a senior adviser at think-tank Centre for Strategic Futures.

"Just as Sir Stamford Raffles made Singapore a free port in 1819, welcoming traders from any country, Singapore in 2017 could welcome data from any country - a free data port," he said.

It could allow data centres in Singapore to hold data governed by the laws of another country, as if it was stored in the source country. This would allow local-based companies to harness insights from the data, he added.

Mr Ho noted that Estonia's e-residency hints at what it means to be a nation in a digital era. Quoting an Estonian official, he said: "Land is so yesterday. It doesn't matter where you physically live or operate. That is how the game will change.''

But a "virtual nation" faces the perennial threat of cyber attacks. To withstand them, Estonia is experimenting with "digital embassies'', where data is stored on servers in its embassies abroad.

Despite the risks, re-invention in the digital age is vital for the long-term survival of global hubs like Singapore. This is because changes in technology, trade routes and geopolitics can gradually diminish a country's position as a global hub, said Mr Ho.

A red dot can and must shape its future
In his fourth and final lecture on governance in a complex world, Institute of Policy Studies S R Nathan Fellow Peter Ho set out on Wednesday the reasons for his hope that Singapore can continue to rise above its size. Below is an excerpt of his speech.
The Straits Times, 19 May 2017

It was Singapore's great fortune to have had two remarkable visionaries in its short history of two centuries - Stamford Raffles, the founder of modern Singapore, and Lee Kuan Yew, the father of independent Singapore.

The question is whether Singapore should tempt fate, and leave it to luck that another great man will emerge to lead the nation to even greater glory. Or whether we should create the conditions that will allow Singapore to extend its exceptionalism for as long as possible into the future.

I am of course inclined to the latter, not just because I believe that passivity opens us to greater turbulence, and increases the likelihood of strategic shock. It is also because I believe that action creates hope. Hope is the fuel that energises society, but hope also needs action to become reality. As Bill Willingham wrote in the Fables series, "Hope isn't destiny. Left passive, it's nothing more than disappointment deferred."

Our founding fathers' grand vision and great hopes for Singapore were always accompanied by action. This is the difference between hope and paranoia - the latter has a crippling capacity to cause all action to be for naught, while the former propels reasonable, thought-out action with measured optimism.

The central question that is posed in this evening's lecture is whether Singapore is merely a price-taker, or whether it has the ability to influence and alter the factors that shape the future?

A thread running through all these four lectures - and this evening's in particular - is a hopeful view that even small city-states can influence, shape, and even create, not just markets, but also their operating environment. It is a belief in this view that hope can be redeemed for even a little red dot like Singapore.

As a parting shot, let me outline two reasons for this belief. First, I do not want to trivialise Singapore's very real constraints. But these very constraints are our opportunities.


Resource constraints matter more to us because we are small. We also have less room for systematic policy error in a world that is increasingly Vuca (volatile, uncertain, complex and ambiguous). But it is precisely our smallness that gives us agility, the ability to course-correct, and to iterate with more freedom and dexterity, than much larger entities. We have greater ease of coordination, to actualise the Whole-of-Nation approaches that I mentioned in my first lecture, since we can actually galvanise society within our small space. We have greater ease of implementation, and great ability to test, iterate, experiment and prototype, because we do so within limited geographical bounds. And as a small state, we have greater ability to course-correct if we happen to embark on policy at scale that turns out to have been wrong or misguided.

Second, we should remember that responding to complexity, uncertainty and accelerating change are not alien to us. It is in our very DNA as a country, and rooted in our origins both as a sea port founded by Raffles and as a nation led by Lee Kuan Yew and the other founding fathers.

No one expected us to survive but we did. We defied rules, expectations, stereotypes and existing categorisations when we eschewed import substitution, courted multinational corporations and embarked on multicultural meritocracy when most of our neighbours were mercantilist and communalist. Both Goh Keng Swee's vision of a thriving open economy and S. Rajaratnam's vision of being "Singaporean by choice and by conviction" were audacious, reflecting a unique brand of gung-ho political entrepreneurship. My belief in the redemption of hope should not be seen as something new to Singapore. It is within each of us, and with a little effort, we can reclaim it.

Of course, there are conditions attached. Prime Minister Lee Hsien Loong alluded to one of them when he spoke of his wish for a sense of "divine discontent", which I take to mean never being satisfied, never being complacent, that we have arrived.

Of course, it is hard to change the identities that we are familiar with - who we are, where we are, and what is within influence. Yet changing identities is part of what it means to grow.

You are not the same person that you were a decade ago, and hopefully you are the better for it. The winds of change provide an opportunity for us to reinvent ourselves.

We need courage and imagination. Courage to change the identities with which we have grown comfortable with, to rewrite the stories that we tell ourselves about ourselves, and imagination to come up with different identities. We should not feel that our success in future is derived from what we are today. If we can achieve such courage and imagination, then there is a basis to hope for a better future that is yet to exist.

This courage and confidence to embrace changes and opportunities together as a nation rest on our sense of shared agency, values and destiny - a shared future. A key source of Singapore's strength has always been our people's trust in fair competition and just reward for effort and achievements, compassion for the unfortunate, and a restless yearning for continuous progress. The points on trust and compassion bear emphasising. These have to be carefully fostered by the leadership because, without them, it would have been impossible for our leaders to forge consensus on far-reaching policies and tough trade-offs between different priorities, interests and groups.

From this interplay between internal hope and external forces of change, combined with vision and good governance, the future - our future - will emerge. As the 13th century Persian poet and scholar, Rumi, memorably wrote, "The garden of the world has no limits, except in your mind."

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