Book summary: Singapore – from miracle to complacency

Summary: Nicholas Walton walked across the entire country in one day, to grasp what it was that made Singapore tick, and to understand the challenges that it now faces.?Singapore, Singapura?teases out the island's story, from mercantilist Raffles and British colonial rule, through the war years, to independence and the building of the current miracle. Singapore's second half-century will be just as exacting as the one since independence--as Walton warns, talk of a "Singapore model" for our hyper-globalized world must face these realities.

Introduction

David Skilling, the director of the Landfall Strategy Group consultancy, compared Singapore to a small vessel on a turbulent sea: it was forced to confront the waves, building experience and understanding of how to survive.

Vulnerability bred vitality. ?Singapore may have had vitality, but it would never escape vulnerability.

TUAS

The pre-Raffles history of the island was cloudy, but intriguing. During the fourteenth century it was known as “Singapura.”

Modern Singapore wears its age-old Malayan heritage lightly. This is in part because ethnic Malays are so heavily outnumbered in a multicultural population featuring a Chinese majority.

Singapore’s determination to be race-blind, mindful of the potential for dangerous divisions within its concentrated, linguistically and ethnically fragmented population, has been welladvised. But this critical difference in fundamental ethos had placed Singapore on a collision course with the rest of the Federation.

The collision duly happened. In August 1965, a visibly upset Prime Minister Lee Kuan Yew appeared on Singaporean television sets to announce that the little island was going its own way. It became that rarest of geopolitical entities: a reluctantly independent nation.

It is easy to see why even Prime Minister Lee was unnerved by independence.

Singapore did not look like a viable country. It had no hinterland, no ready market for whatever it wanted to sell, no place from which to draw labour, food and water.

Singapore’s small size gave it focus, and it gave the PAP real control over the levers of the state.

The population was motivated by their justified sense of vulnerability, making them more tolerant when the PAP tightened the terms of the country’s democracy.

Around the time that Singapore was celebrating—in effect— Malaysia spitting it out and getting on with life without the miniscule island, I asked a particularly astute and wise friend what might happen to his country if its miracle started to falter. He drew a breath and looked like he would rather I had not asked him the question.

Only after some prodding did he venture an answer. “Re-join Malaysia,” he muttered, under his breath.

His tone said it all: for Singapore this would be less a reunification than an admission of defeat.

BRAND RAFFLES

A couple of centuries after he stepped fatefully onto its shores, his name graced Singapore’s pre-eminent hotel (the glitzy upstarts over at Marina Bay Sands notwithstanding), its most prestigious schools, and— at least until around 2005—the business class offering of the world-leading Singapore Airlines

It denoted the very best in provenance and quality: not a bad legacy for somebody who barely graced the island with his presence during his lifetime, and whose name is indelibly associated with a British colonial past that many modern Singaporeans seem keen to play down, if not disparage.

Lee Kuan Yew’s influential Dutch economic advisor,Albert Winsemius, was especially keen to promote this link with the British past, sending the message that Singapore was a safe haven for Western capital, while wars and communist insurgencies raged on elsewhere in Southeast Asia.

This tipping of the cap to Raffles was also a reinterpretation of the colonial period, aligning it with modern Singaporean values.

Singapore was ideally positioned when Britain began to open up the potential of the Malay Peninsula, mining its mineral wealth and establishing vast plantations of rubber trees.

“Into this land God put first gold and tin,” wrote Rudyard Kipling, “and after these the Englishman who floats companies, obtains concessions and goes forward.”

The development of canned food in the 1850s and 1860s increased the value of the Malayan tin mines, while the invention of the motor car ultimately did something similar for rubber.

Singapore also proved itself to be a useful mustering point for Southeast Asian Muslims, making their Hajj pilgrimage to Mecca.

In short, Raffles’ vision for Singapore was dead on.

Raffles’ talent was strategic, seeing the map rather than the street plan. He recognised the island’s potential, then set about laying the foundations for exploiting it.

That involved establishing Singapore as a nineteenth- century global trading hub and free port, with the facilities and administrative set-up to outcompete regional rivals and bend the patterns of international trade towards its gravitational pull. Raffles’ commitment to free trade fitted with the philosophical direction that Britain was heading in.

No taxes were levied on commercial transactions until 1853, and only very small ones after that. This gave Singapore an enormous advantage over rivals (such as Batavia), which were bogged down with bureaucracy, corruption and discrimination.

Arguably, its commitment to free trade and non-disruptive administration still mark Singapore out from the rest of the region today.

JURONG: INSIDE THE INDUSTRIAL MIRACLE

The Jurong story, like the broader Singapore story, was not just about economic transformation of an island or a corner of it, but about the transformation of that island itself.

It total, Singapore is now almost a full quarter bigger than at the time of independence: in 1965 it was 581.5 sq km; by 2015 it had reached 719.7 sq km, and was still growing.

There is a deeply controversial aspect to magicking water into land. But much of what was being used was sand, which is rapidly becoming one of the world’s most strategic and contentious resources.

Sand—or, more specifically, natural aggregate—is the second most-heavily exploited natural resource after water. One remarkable measure of the astonishing progress made by China is that in the four years up to 2017 it used as much sand as the US did in a century.

Despite its ambitions for founding a twenty-first-century knowledge economy, Singapore is a major importer of sand, and much of it is used for land reclamation. It has the highest demand per capita: around 5.4 tonnes per inhabitant, per year. This has both an environmental and a geopolitical impact:

some suggest that Singaporean sand imports have led directly to the loss of twenty-four Indonesian islands, and a rise in tensions over fluid Southeast Asian maritime borders.

“Trust is Singapore’s most valuable resource, and we won’t survive if we don’t recover it.” Other countries do have oil and plenty of other natural resources, Tong Yee answered, but very few countries keep their word.

If Singapore said it would make Jurong Island a success, it would indeed be a success, and that counted for far more than any amount of black sticky stuff buried under the ground.

Singapore might not have much, but can at least keep its word. This understanding was at the heart of what Lee Kuan Yew and his colleagues in the PAP set out to achieve. They had to make Singapore an attractive place that foreign investors could trust.

Singapore became globalisation’s poster child. Between 1965 and 1987, external trade represented, on average, more than three times the country’s GNP. In 1987, 79 per cent of all ASEAN’s trade came through Singapore.

WEST COAST ROAD

The Housing Development Board was formed in 1960, and even before the spit from the Malay Federation it had transitioned from providing rental properties for the poor to mass owneroccupied housing.

There was a strategic motive behind this shift: Lee Kuan Yew believed this particular solution to the country’s housing would also give people a stake in the future, a sense of belonging, and a belief in a non-communist future.

There are challenges with the way the HDB system works. Retirees, who draw on their CPF rather than a conventional state-funded pension, are expected to be mortgage-free by the time they retire. This allows them to “right-size” to a smaller flat, freeing up cash. As this has not happened as much as the Housing Development Board hoped, retirees are now allowed to sell portions of whatever remains of their original ninety-nineyear lease back to the government.

The lease system itself is starting to cause rumblings of public alarm too, as people become gradually more aware that many ninety-nine-year leases are rapidly shedding value as they steadily count down.

HDBs are not necessarily the store of value that many owners and their children, seeing house prices soar, have comfortably—and complacently— assumed. This could spell serious problems for the government, which continues to insist that ownership will revert to the Board once leases expire.

If Singaporeans ever take to the streets, it is likely to be a furious protest about the money in their pockets, rather than any squeezing of political expression.

NATIONAL UNIVERSITY OF SINGAPORE - TOP OF THE CLASS?

On the face of it, however, Singapore’s education system is world-class, an accolade that isn’t confined to NUS and its great domestic rival, Nanyang Technological University (NTU). Singapore was a touchstone for academic excellence and was studied by a host of other countries as they sought to improve their own schools’ performance.

Remarkably, these results were achieved with relatively little money: Singapore only spent around 3 per cent of GDP on education, while Britain spent around 6 per cent, and Sweden, 8 per cent.

There is, however, a different truth that hides behind the stellar figures. Critics charge that an individual student’s success depends too heavily upon just one exam—the Primary School Leaving Examinations, taken at the age of eleven.

Success in this single exam means entry into a particularly good school, from which an onward path is charted to good universities and that lucrative-but-stable career in finance that every teenager with dreams yearns for.

The fear is that Singapore’s education system is often effective, but rarely enjoyable. In acknowledgement of this, the government brought in a new slogan—“teach less, learn more”—along with other measures that gave the kids more say in the subjects they had to study.

For all its garlands and successes, and beyond the human cost of this relentless educational pressure, critics of Singapore’s education system have charged that it is simply producing the wrong kind of excellence for a century where a different set of skills is needed. “Here’s the problem: content knowledge today has become a commodity,” says Tony Wagner, the expert in residence at Harvard University’s Innovation Lab. “The world no longer cares how much our students know. What the world cares about is what they can do with what they know.”

In strict terms, this was actually something that the Singapore system, at its best, was very good at doing: it had top teachers who were very adept at teaching concepts and helping students to apply them elsewhere.

Instead, it seems to be a factory that churns out mid-level workers for multinational corporations, sprinkled with the odd genius. Professor David Hung has expressed concerns that

the country’s system may not be producing the “talented innovators and mavericks” that flourish in knowledge economies.

She also brought some hard truths to the retreat. Despite its successes, neighbours such as Indonesia associated Singapore with conformity and a lack of entrepreneurship.

One American banker had told her that the reason foreigners would always be needed on the island was simple: “Singaporeans all think alike.”

CHANGI AIRPORT - GEOGRAPHY CHANGES

If anything in Singapore exemplifies the miracle of its first half-century, it is Changi.

Changi’s reputation is only enhanced by the airline that calls it home. Singapore Airlines, or SIA, is also consistently ranked as one of the world’s best. It built its reputation as a high-quality connector airline, particularly on the “kangaroo route” from Europe to Australia.

SIA was, in effect, Singapore’s strategy with wings: it leveraged geography and technology, and was globally competitive on price and quality.

Singapore’s geography may no longer be quite as advantageous for SIA as it once was. In the past, using the 747, Southeast Asia was the natural stopover between Europe and Australasia.

The Gulf has stolen a large chunk of this pie, thanks to a geographical inheritance—between Europe and booming East Asia—that has usurped that of Singapore.

The challenge that Singapore now faces is that its size means that it has little wiggle-room to fall back on as geography evolves. So much of its miracle leveraged its location, from Indian opium to Chinese electronics, and from Middle Eastern oil to a stable safe haven for multinationals in Southeast Asia.

Singapore’s geography may have fuelled its rise, but it has also been a source of insecurity. Small size always brings risks, and that nutcracker positioning, between Malaysia and Indonesia, has helped fuel the feeling of vulnerability that drove the Singapore miracle. It may now be far better friends with its immediate neighbours, but new security problems have arisen.

With such large—and, it must be emphasised, largely very friendly—Muslim populations in the immediate region, there is a real concern that fallout from conflicts such as that in Syria may wash up on Singapore’s shores sooner or later. The number of Singaporeans who have fought under the black flag of ISIS is thought to be well into double figures

Anything of this order would be utterly catastrophic for Singapore. It could devastate an economy that relies upon the presence of multinationals, its open links to the region and the wider world, and a totally safe environment for tourists and expats alike.

The country’s recent arms-length relationship with expats has compounded the feeling that their presence—on both sides—is not much more than a mutually beneficial economic relationship. They are mobile, and would disappear in an instant.—along with richer Singaporeans—on the first flights to Perth, Dubai, and London.

Even without such a conflict, Singapore’s diplomatic balancing act is becoming far more difficult. It has trodden a precarious line between Chinese and American interests, acting as a friend to Beijing while making sure the Changi Naval Base has been built to fit the exact dimensions of US Navy vessels. Singapore’s armed forces train in Taiwan and Australia, under Israeli guidance.

TANAH MERAH FERRY TERMINAL : LITTLE RED DOT

Complacency could also pose a threat to the vaunted—and undoubtedly highly effective—Singaporean style of government. The 2011 election was a sign that PAP legitimacy was not guaranteed. Further achievements would need to be trumpeted to the masses, and that nagging sense of inequality assuaged.

But what if that meant taking counter-productive measures, such as rolling up the red carpet that had been laid down for multinationals and their expat workforce? The government had a difficult balancing act on its hands.

The crucial fact about Singapore is that it is small enough to walk across in a single day, and that means that it simply does not have the strategic depth to absorb complacency and catastrophes, setbacks and stumbles.

If Singaporeans have lost their sense of vulnerability, then they need to check a map, read the newspapers, and rediscover it quickly.

THE WAY FORWARD?

Professor Mahbubani’s exhortations for Singaporeans “Success creates its own problems,” he said.

“Singapore’s fundamental challenge is the Kodak challenge."

In short, Singapore was becoming too complacent to make the brave and bold decisions that would keep it afloat on the high seas.

Professor Mahbubani condemned the current leadership with faint praise: he called the government “thoughtful” and noted their awareness of the need to make dramatic changes, but drew attention to their reluctance to follow through. You have a system that rewards you if you’re competent and do well. But if you take a risk, you might lose your comfortable income. Success creates risk aversion.”

Governments rarely do anything revolutionary unless faced with a crisis, I noted. “But that’s the problem! You define the problem precisely. You’re saying to me that only a crisis will move the Singapore government, and that’s the problem: they have to move before the crisis.”

“There won’t be a major implosion,” said Professor Mahbubani. “There’ll be a gentle, comfortable slide downwards. Gradually we’ll find that our neighbours become more competitive. They’ll do bolder, more imaginative things. There are lots of reasons why people will continue to use us. If you want to set up a law firm to service the region, obviously you do it in Singapore. Everything works here.”

But even that would not be enough in the long run. “We’ll just gently slide downwards.”

Before I left Professor Mahbubani’s office, our conversation briefly turned to the book that I had written about Genoa. There were similarities, I said, as the Genoese had been dealt an unpromising hand and were forced to come out fighting. But Genoa then lost its vitality, and scrabbled around for a purpose, crowded out by France and Spain, as the world shifted away. Then followed 600 years of slow and steady decline.

“Six hundred years of decline is not too bad!” he said, and shook my hand as I headed out of the door.