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Singapore after Lee Kuan Yew

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In Brief

Singapore’s ruling party, the People’s Action Party (PAP), enters 2016 enjoying the comfort of a magnificent electoral victory in the 2015 general elections. In that election — the first since the death of patriarch Lee Kuan Yew — the PAP won almost 70 per cent of the popular vote.

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It was not the ruling party’s highest-ever vote, but coming off the back of the 2011 general election, in which the party scored its lowest vote since independence (60 per cent), it was a tremendous relief.

Since then there have been official efforts to puncture any nascent sense of complacency, both in Cabinet and among PAP supporters. But the government still enters 2016 knowing that it has another five years to fix the problems created by half a decade of policy and administrative errors that cost it so dearly in 2011.

The 2015 general elections showed that in the absence of a tried and tested alternative, Singaporeans are ultimately willing to forgive almost any policy or administrative failure. This leaves the government with a relatively free hand to tackle the rather formidable challenges on its desk. Significantly, many of the challenges it faces are municipal and small-picture in nature, reflecting the limited horizons of politics in the city-state. These include building new flats and railway lines; breaking the weekly cycle of train breakdowns; keeping a cap on both the rate of immigration and the cost of living; installing and spreading a new raft of welfare benefits without building an expectation of entitlement; avoiding man-made floods in downtown Singapore; and spreading health coverage while keeping costs down. These are the front line challenges in Singapore after Lee Kuan Yew.

Even in the international arena, the front line issue is remarkably ‘domestic’: stopping the haze from Indonesian forest clearance. The Singapore government has no direct control over this but the government is universally expected to fix it. Such is the burden of cultivating an image of being all powerful.

Lurking behind these small-picture issues (which are, of course, important in everyday life) lies a series of challenges that are very much big picture and long term. Most notable is finding new ways of doing business. So much of Singapore’s business model for the last half-century or more has been based on being ahead of the pack, but now the ‘pack’ is catching up.

The Port of Singapore rode the first wave of containerisation, but now everyone is containerised. Changi Airport set a new standard as a regional hub, but its edge has now been blunted by Dubai. Singapore pioneered export-oriented industrialisation, sucking in American capital and spewing forth goods for American consumers, but neither American capital nor the American consumer market is quite so rich these days — and in any case they have plenty of other options now.

In the early 1980s Singapore was also ahead of the world in investing in China, and made itself integral to a China-based international manufacturing network. Singapore is still integral, but Chinese growth has slowed to less than 7 per cent per annum, and — just as in the case of the United States — China has many more options now.

Singapore is now desperately in need of some new big ideas, but finding them is easier said than done. The government has seen these challenges coming since the 1990s and has made many attempts to build alternative sources of enterprise for the island, but with limited success. Its efforts to establish itself as a hub for biotech research have returned very little. Its attempts to become a regional education hub have suffered many failures, most notably the collapse of the University of New South Wales Asia in 2007. And the ongoing life of its educational successes (such as Yale-National University of Singapore College) depend entirely on the government continuing to pump big money into its ventures.

Singapore has had more success turning itself into a medical tourism hub, but this is the exception rather than the rule. Perhaps it is indicative of the problems faced by the post-Lee Kuan Yew generation that the government’s most successful ‘new economy’ venture is a pair of casinos — which is really not a very new idea at all.

In the meantime the efforts to limit the inflow of foreign guest workers is making it much harder to conduct business because the economy is still geared to the tired old model that relied on cheap and compliant labour.

Given these challenges, it is perhaps remarkable that one of the more significant dangers for the government is a return to the complacency that led it to this point in the first place. If the general election of 2015 was full of rainbows for the government, the biggest cloud on the horizon now is complacency. A nice problem to have, perhaps, but one that could prove inimical to good government Singapore-style.

Michael D. Barr is an associate professor of international relations at Flinders University and Editor-in-Chief of Asian Studies Review

5 responses to “Singapore after Lee Kuan Yew”

  1. “Singapore after Lee Kuan Yew” essentially happened 25 years ago when Lee chose to step down as Prime Minister – not when he died in 2015. Lee, who was a master of organizational leadership, systematically renewed his government by transitioning from power throughout the 1980s, replacing all other first-generation leaders by the mid-1980s and by stepping down as PM in 1990.

    The 2011 election results are over-sensationalized. Every other developed country can only dream of winning 60.1% of the popular vote. In the 1991 elections (held just after Lee stepped down as PM), the PAP also won only 61% of the popular vote. But in the 1997 elections, the PAP improved to 65% and in 2001 elections it won 75%.
    It’s misleading to sensationalize “the problems created by half a decade of policy and administrative errors that cost it so dearly in 2011” when arguably no other government in the world in that period had performed better in policy and administration than the Singapore government. After all, the PAP government has consistently been the world’s most effective government. Since the Lee Hsien Loong became PM in late 2004, Singapore’s score for “Government Effectiveness” in the World Bank Governance Indicators report has never been lower than 99.5 (2005, 2006, 2011, 2012, 2013) or perfect 100 (2007, 2008, 2009, 2010, 2014). For comparison, the Australian government scored between 91.8 to 96.1 during the same period – and it shows in Australia’s far worse national election results. The World Bank Governance Indicators report has assessed up to 221 countries for governance since 1996 (the dimension of “government effectiveness” captures perceptions of the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government’s commitment to such policies).

    For example, it is misleading to pretend Singapore’s “attempts to become a regional education hub have suffered many failures” based on the failure of the University of New South Wales Asia (which opened on 12 March 2007 and closed after just one semester on 28 June 2007). From descriptions in Wikipedia and The Australian newspaper (“UNSW Singapore campus doomed to fail”), it appears that this Australian university’s (a) lackluster name failed to attract students and (b) incompetent Australian executives failed to plan and manage the university’s start up more effectively. This Australian university has no subsidiary outside Australia’s New South Wales area.

    All things considered, Singapore for its tiny size is a successful regional education hub. Singapore’s six publicly-funded universities have 100,000 students and eight foreign universities have another 10,000 students. Many tens of thousands more students are enrolled in other colleges, institutes and polytechnics. According to the QS World University Rankings, Singapore’s top universities were ranked No. 12 (National University of Singapore) and No. 13 (Nanyang Technological University Singapore). The top Australian universities were ranked No. 19 (The Australian National University), No. 42 (The University of Melbourne), No. 45 (The University of Sydney), No. 46 (The University of Queensland) and No. 46 (The University of New South Wales). For Politics and International Studies, the National University of Singapore was ranked No. 14 and Nanyang Technological University Singapore was ranked between 51 – 100.

    Flinders University was ranked outside the top 500 in the QS World University Rankings. For Politics and International Studies, Flinders University was unranked.

    Considering its impact on the success of developing countries (e.g., China, India) as well as Singapore’s rankings in global competitiveness reports, Singapore has been extraordinary in transforming its business model to stay ahead of the pack. Watch this CNN clip on “Lee Kuan Yew’s legacy: A blueprint for China”
    https://www.youtube.com/watch?v=ilRwxpYOdAo

    Tom Plate: “Ruling party’s resounding win in Singapore elections reflects the success of its political model”
    http://tinyurl.com/z5r3ggg

  2. Lee Kuan Yew was ‘a once-in-a-century politician’, whose prodigious intellect and will transformed Singapore from a swamp, riddled with recriminating political intrigues, mindless sectarian violence and union bickering, to a First World economy with, arguably, one of the world’s highest per capita GDP, largest per capita foreign reserves and a pristine cosmopolitan City State, after the British gave Singapore its independence and withdrew her garrisons East of Suez (bar Hong Kong)in the mid 1960s.

    It is fair to say that “So much of Singapore’s business model for the last half-century or more has been based on being ahead of the pack, but now the ‘pack’ is catching up.” and “Singapore is now desperately in need of some new big ideas, but finding them is easier said than done.”

    This is because today Singapore is, arguably, a victim of its own success. The young folks, like their counterparts in Hong Kong, have been priced out of the sky-high housing market and sidelined with low wages.

    How many of them, even with a university degree, can afford to buy an apartment or can afford to get married and have babies, never mind about buying cars, which can cost FIVE times more than in Australia for a 1.6 litre model? Even highly-paid expats find it scandalously expensive to own a car in Singapore, because of draconian taxes.

    The Singapore per capita GDP was S$69,050 (Aust$67,275) in 2013 but according to the Ministry of Manpower’s labour force survey report, the medium monthly income of full-time employed residents in Singapore in 2013 was S$3,250, which meant that 50% of the labour force earned less than S$39,000 per annum in 2013.

    If one includes those cases whose gross incomes exceeded $39,000 but were less than S$69,050 per annum, the percentage of full-time employed residents earning less than the per capita GDP of S$69,050 could be much higher.

    Singapore, unlike Australia, has no minimum-wage policy. Low wages of nearly 2 million unskilled foreign workers continue to press wages down for long-suffering Singaporeans, despite Singapore having a First World economy.

    A survey on poverty attitudes by the National University of Singapore’s (NUS) Social Work Department, released in Sept 2013, showed that “66.4 per cent of respondents said there are jobs available for aid recipients who want to work. But 85 per cent said these jobs are not paying enough for them to support a family.”

    Singapore is also a Super-Aging Society and it’s birthrate needs to rise since the Total Fertility Rate in 2013 was only 1.19%, which was well below the replacement rate of 2.1%.

    In 2014, Singaporean citizens formed 61% of the total population of 5.47 million but if Singapore continues with a low birthrate on a generational basis, statistically, the population of Singaporean citizens (3.343 million in 2014) could drop by one-third in the next 50 years, a fate that may also befall Japan, another Super-Aging Society.

    The Singapore Government plans to increase the total population to 6.9 million, by bringing in more migrants, skilled and unskilled manpower but when that happens the paradox is that, with a low birthrate, Singaporeans will be the new minority in their own country.

    It’s time for Singapore to retool the economy which is “still geared to the tired old model that relied on cheap and compliant labour”and go up the value-chain to enable young, educated Singaporeans to earn enough to get married and have more babies so that Singapore’s next generation will be a more vibrant one.

  3. KTTN’s comments below suggest that Singapore’s success is threatened by two underlying dynamics: income inequality and a low birth rate. The former could mean that there is a substantial number of lower income workers with little chance to advance in the future. The latter means that fewer and fewer young people will be available to support the growing number of elders, let alone fuel the growth the economy will need.

    How will each of these forces be dealt with? Can wages be raised or taxes be shifted to help the lower income people earn more? Can this multicultural society tolerate, let alone integrate, more immigrants as a way to overcome the low birth rate?

    • Richard, if the Singapore government under Lee had put a cap on prices of goods and services, housing, etc., while paying good wages, maybe Singapore would not be facing a low birth rate and young people who are highly educated but are not paid handsomely considering the amount of sweat, blood, and time they put into their education.

      Singapore under Lee is a victim of its own success in not allowing unions or having strong workers’ rights plus being too business-friendly for wealthy people and corporations. It was the same for the USA prior to the Great Depression where even though the country was rich, the vast majority of people were poor. The biggest difference is at least the Singapore people have a chance to go to a university where prior to 1929, only 10% of American males could go to college and they were from the wealthy/upper middle class.

      You look at the USA, the USA has one of the lowest birth rate due to the rising prices of goods and services, shipping good paying jobs overseas, and having low paying jobs for the last 35 years. The last time, the USA had a low birth rate was 1935 due to the Great Depression of 1929.

  4. I have read your book “The ruling elites of Singapore”. The word ‘forgiving’ in your article above is an understatement. Most of the 70 per cent who vote for PAP is based on paranoid and emotional needs, not according to their logic. Example: I was there and witnessed the silent tension. I saw informers “reminding” their friend why PAP is ‘good’ despite the rising cost of living and their pension fund being used suspiciously without permission.

    Another example: A senior whom I befriended for sometime boasted why he voted for PAP but I remembered him cursing his current government. When I enquired further, his eyes became hysterical and filled with fear; he changed his subject instantly.

    2016, for me, is the mark of final chance for Singapore’s citizens’ decision as a democracy and they have chosen to sell their rights and freedom to the PAP. Thanks to them, Singapore is now a kingdom de facto from now onwards. Any future elections have become invalid since we all know who will be the winner.

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