Let me see how best to respond to these issues. My remarks off the cuff are inserted below: Cheers, Anthony
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Anthony P. D'Costa, Associate Professor Comparative International Development University of Washington Campus Box 358436 1900 Commerce Street Tacoma, WA 98402, USA Phone: (253) 692-4462 Fax : (253) 692-5718 xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx On Wed, 25 Sep 2002, Paul Phillips wrote: > This query was put to me by a colleague and former pen-l-er. > Anybody familiar enough with Singapore to suggest an answer for > this student? > > Paul Phillips > Economics, > University of Manitoba > > >> >Professor Vorst, > > >> > I am particularly interested in the last part of your lecture > >> >today, where you were comparing the economics of smaller countries to > >> >larger countries with regards to their imports/exports. I am very > >> >interested in the idea that a very small country, like Singapore, which > >> >imports most, if not all of their needs for maintaining life. Yet it is a > >> >thriving, wealthy country. Singapore is a wealthy country by most economic measures. It is a city state having been kicked out by Mahathir's Malaysia in 1967 or 1969. S'pore is largely Chinese (80+%), mostly from the coastal regions of China, some by marrying local Malays became Peranakans. They are culturally unique having a mix of both Chinse and Malay, not to mention their cuisine called nonya. So ethnic Malays comprise close to 20% and a small percentage of ethnic Indians, mainly Tamils from the southern state of Tamil Nadu, a good number of them being Muslims. Lee Kuang Yew was a clever man. Despite rising from a labor group he essentially marginalized them on precisely because he was aware of Singapore's vulnerability. Trained in cambridge UK (I believe) where he must have had tough time given his basic dislike of liberalism. S'pore was already an entrepot port, importing for processing before exporting. S'pore's export stats are often over 100% because of this double-counting. >From some fishing and ship repair activities, LKY jumped into the bandwagon of MNC based exports plus the usual subcontracted out work based on low wages (the new international div of labor argument) as it no natural resources to speak except if it can called that good deep water port facilities. But in order to provide a stable environment for FDI, LKY had a social policy that essentially recognized the importance of inter-ethnic balance. Mind you the Chinese are dominant in every way but LKY ensured that the other two minorities were not left behind. So there has been almost an unwritten policy of quotas (not liberal at all),where a % of the three ethnic communities are represented proportionately in govt, univs, etc. LKY also believed in meritocracy and bureaucracy (I can vouch for its effectiveness, given that I had to deal with immigration (the INS here is a shame)). LKY later appropriated Confucianism, justifying the hiererchical nature of government, the power of the state over civil society, believed in engineering society through economic incentives and penalties, but really relied on a legal system borrowed from England but implemented with an Asian falvor (flogging is real). S'pore is also known as "fine" city. In terms of policy S'pore followed the free trade route but by making best use of what it had, port facilities and its people. But there is a twist to all this it ensured free trade would work in its favor by education, eliminating any opposition (read leftist) to investments and wage demands, investment in infrastructure (I have not seen any other city that is so green, leaving aside the tropical aspect of it). It has excellent urban planning (although in its rush to modernization it hastily destroyed its wonderful China town with shophouses, later realized its mistake and saved a part of it. As wages rose with increasing demand S'pore was compelled to upgrade its industries. From textiles, garments, food processing it moved to mostly marine based industries, oil refining (I believe the largest in the world), port facilities, the entire island is a port, and high tech industries, realted to IT hardware. It's the largest hard disk drive producer. It emphasized science and engineering, universal education, very orthodox kind of education but very effective. I have taught their econ undergrads, they are very good even if somewhat quiet in class. How did manage it? First it caught everyone in the tax net even though the tax rate is quite low. It doesn't have social security but it does have excellent pension funds--20% your contribution matched by 20% by the state, that's 40%. This is a huge savings pool, which the govt allows the people to tap into to purchase flats (the main form of housing). About 80% of S'poreans have their own flat, a very number by most comparisons. As incomes have risen (based on education, the Malays are behind on this score mainly because of edu), flats are owned, the only real cost is food. But with cheap food sold by hawkers in food courts, in malls (S'pore is one big mall!), the cost of living is ultimately low and std of living is high. There is excellent pub transpt, buses and trains seamlessly run the length and breadth of the island, taxis are also very cheap by all OECD stds. Car ownership is expensive, you have to pay a entitlement fee that can more than double the price of car. But it is strange to see so many flashy jags and benzs. (BTW Tacoma also has a big jag ownership). It follows free trade and floats its currency but it has an excellent financial system. S'pore was not on its knees during the 1997 crisis. Its monetary board is very secretive but they seem to be on top of things. The sing dollar fell marginally in 1997, just when I had to reptriate my savings to the US! LKY's party People's Action Party (PAP) has ruled S'pore since its founding. It has excellent organizational structure and goes down to the grassroots level. The opposition unfortunately gets battered very easily either because the PAP uses its political clout, resorts to very British-like libel rules, and for all practical purposes the PAP has been delivering goods to the public thus making the opposition almost non-existent. > >> > > > Maybe, due to its small size, the logistics of running Singapore > >> >does not play a major role in its domestic spending. In this, I mean the > >> >social programs that many liberal-capitalistic nations pursue. This is true but as I said above it has been able to generate resources which it pumps back into the system fairly well. > >> >(i.e.: roads, transportation, health care, defense, etc,.) Believe it or not it does spend a lot of money on infrastructure. It's airport is considered to be one of the best and its flagship carrier one of the most efficient with the youngest fleet of aircraft. Basic health care is very accessible, there are different kinds of fees for hosp stays but the treatment does not vary. It spends money on defense too. I have heard it parks its F-16s in the US as it doesn't have space. Mahathir does irritate LKY (although they go back long ways) by threatening to shut water supply across the strait). S'pore is diversifying its water sources from nearby Indonesian islands. Yet it does > >> >invest allot of money in science, technology and education. As a result, > >> >Singapore has become an international hub for technology literally and > >> >figuratively. > > >> > So I guess what I am driving at here is, why does Singapore > >> >stand out internationally as a wealthy nation when most of the cards have > >> >been dealt against it? >From one point it appears that way. But they were able to ride with teh global capitalist expansion. Timing was good but also very pragmatic policies. Do you think that Singapore should become an > >> >international example on how to run an ideal nation? No, if you do not believe in benevolent authoritarianism. Most outsiders with any political inclinations have an uneasy time, not being able to speak critically of the govt. On the other hand, it runs pretty well. Crime is very low, most thieves get caught because of they really don't know how to steal! Women feel very secure in the city. But is also quite sterile with not much to do (it's too small, so you travel in the region). But it is a comfortable life for those residing and many from South Asia and elsewhere find S'pore quite appealing. It is of course I think one of the greatest places to eat! S'pore is a city state so its lessons are less applicable. But it can offer lessons of running bureaucratic organizations, fiscal prudence, education and so on. At the same time only a few countries can replicate the political grip of one party which is legitimized by performing well. That in itself may be a source of discontent. > >> > > >> > Or maybe I am just a whacked out kid that wastes his time > >> >thinking about such nonsense. > >> > These are useful questions because they help us tease out the multiplicities of experiences with considerable contingencies. > >
