'Right strategy at right time for a country without resources'

The Straits Times, April 23, 2007


MM Lee read several extracts from foreign experts who commented on Singapore, its government and its development. Here are two excerpts:

SINGAPORE, INC

Mr Lee noted that Singapore was 'a very special country'. And special countries that could not logically have survived have drawn the attention of scholars who have studied this problem.

He then read the concluding passage from a book by Harvard Business School professor Richard Vietor, published this year and titled How Countries Compete: Strategy, Structure And Government In The Global Economy:

'Singapore has become a rich country, equal to the Organisation for Economic Cooperation and Development (OECD) average and better off than Spain, Portugal, Greece and Italy. It has remained secure in South-east Asia, amid countries far larger, and somewhat less stable, than itself. These achievements are indeed considerable.

'Singapore has done this through a combination of great leadership, effective developmental strategy and strong governmental institutions. Lee Kuan Yew, who led Singapore's development from 1959 to 1990, was indeed unusual - an intelligent, ambitious and honest leader who served for an entire generation. The strategy he adopted, of export-led growth based on foreign direct investment, was prescient - the right strategy at the right time for a country without resources in a globalising world...

'In fact Singapore is almost certainly the best example of a government that works - more than a quarter of Singapore's GDP and virtually all of its policy endowment is government-controlled. Effective macroeconomic management is a significant part of this. Nowhere else do we find such high levels of savings and investment directed so effectively at building the infrastructure, skills and institutions necessary for economic performance.

'Yet Singapore's future remains uncertain. While it continues to grow quickly and develop its biomedical resources, the challenges of becoming a knowledge-based economy in competition with the older and richer nations of Japan, Europe and the United States are immense.

'But Singapore has made its bet - that a government-led country can work as well as market-dominated capitalist states. Either way, Singapore has done it in the past and thus serves as an admirable model of what is possible. It remains to be seen if the country can continue in the future.'

Mr Lee then told his audience: 'Please remember that.'


STOCKHOLM AND SINGAPORE

Mr Lee read from another scholarly examination of cities: Cities Of Civilization by Sir Peter Hall, professor at the University of London.

'He's studied how cities flourished and then declined,' said Mr Lee, reading from a chapter titled 'The Social Democratic Utopia' which looks at Stockholm under the Swedish welfare state and Singapore:

'It may seem at first sight an outlandish comparison. The differences are many: not least in the fact that Singaporean policy has never claimed descent from the liberal tradition, on the contrary, rejecting many of its features as examples of western corruption; or the fact that in 1994, Sweden and Singapore stood at opposite poles on the percentage of GDP taken for public spending, 68 against 20 per cent.

'But Singaporeans, told that their system is an example of successful buccaneer capitalism, will reproach the observer: their system is socialist, they will say.

'It is in fact a variant of social democracy: the state guarantees social harmony, provides a high level of physical and social infrastructure; the private sector, in particular the major agents, are allowed to deliver the goods (or in Singapore's case, the services). So the similarities are uncanny.

'But with this further point of difference - Singapore so far has experienced no real crisis, no fundamental break in its remarkable economic progress.

'That could be because the government, conscious that this is a city-state completely dependent on the global trading function, has sought always to keep one step ahead of the action, moving the economy out of basic manufacturing into high-technology production and finally into advanced services, moving housing policy rapidly out of state provision into mass owner-occupiership.

'At some stage, Sweden tripped and fell; Singapore seems determined to avoid that fate. Did Singapore observe Sweden? It observed almost every other successful society and successful city, and it would be strange indeed if, long ago, it had not already heeded the lessons this chapter has sought to point out.'