Conviction matters

Most autocrats drive their nations into the ground. Lee did the opposite. For three decades as Singapore’s prime minister, starting in 1959, he oversaw one of the most successful social engineering feats in human history. Lee turned a former British trading post in Southeast Asia into a gleaming city state where the per capita GDP exceeds that in the US.

After a brief merger with Malaysia, in 1965 the Republic of Singapore was born. Lee was PM until 1990 when he voluntarily stepped down, at age 67, to make way for a younger man. During this time he changed a developing country plagued with unemployment and poverty into a first class developed country and the cynosure of its neighbors.

Lee Kuan Yew's emphasis on growth, the thrust on making Singapore attractive as a destination for investment as well as the focus on drawing world class manpower; building state of the art infrastructure and excellent air and sea linkages; a low and transparent tax regime; clean and efficient bureaucracy; a strong regulatory and legal framework; a neutral diplomatic policy which has ensured it is an ally of the US as well as China; and developing a clean and green city, have ensured Singapore's stupendous economic success. These factors have led to the emergence of Singapore as a powerful and wealthy financial centre.?Lee is most remembered for his fight against corruption, standing up for multiracial meritocracy, power of conviction and signature style of authoritarianism

Lee’s beliefs and ideas went on to mould not just the development of a small new country with no natural resources to speak of, but also, some would argue, the personal lives of its citizens. Under his leadership, his government implemented policies and ran campaigns to compel and urge Singaporeans to save water, to keep Singapore clean, to have two children, and later, to have three if they could afford it, and to speak Mandarin, among many other exhortations. Lee's government banned chewing gum — one of many rules designed to keep Singapore clean, free from spitting and littering. Singapore is an anomaly. It’s a metropolis dominated by ethnic Chinese who all speak English. The cops don’t take bribes and government servants meeting private investors over lunch are paid for by the state.

Much of this success is credited to Lee’s vision, policies and power of conviction. Here is an incident that shows his conviction and grit to protect what he had help build: In 1980, Lee Kuan Yew told agitation pilots' union of Singapore Airlines (SIA) that he was prepared to ground the airline & start all over again. The dispute came about because the Singapore Airlines Pilots' Association (SIAPA) pushed SIA for a 30 percent increase in basic salaries and better working conditions. To get its way, SIAPA launched an illegal work-to-rule industrial action. Then Lee Kuan Yew stepped in. During an election rally this is how he retold, about what happened at the meeting with pilots' union:

"I can tell you that when I met the SIA pilots, I didn't meet them on TV, I met them face-to-face. Five feet across the table so they can see me, and see whether I'm still vigorous, able to campaign and take them on. Whether it's worth taking me on. And I offered them two choices. Either you stop this intimidation, which is what it was, bringing SIA right down. Disrupting services, ruining its reputation. Millions of dollars’ worth of advertisements and sales ruined within a matter of two weeks. I gave them a choice. Continue this and I will by every means at my disposal teach you and get the people of Singapore to help me teach you a lesson you won't forget.

And I'm prepared to start all over again. Or stop it! Get back to work, restore discipline, then argue your case. Took them 65 minutes and they decided ok it isn't worth the fight. Why? Because they know they'll lose.?They know that I'm prepared to ground the airline. They know that I can get the airline going again without them.

And let there be no mistakes about it. Whoever governs Singapore must have that iron in him. Or give it up. This is not a game of cards. This is your life and mine. I spent a whole lifetime building this. And as long as I'm in charge, nobody's going to knock it down."

This incident was widely reported in the international press and became part of the legend of Lee. “I spent a whole lifetime building this (Singapore/SIA). As long as I am in charge nobody's going to knock it down.” This is the conviction Lee had to defend his beliefs. The opposition was always there trying to knock it down.?

There will always be opposition in our lives too, some from people and some from events. It all depends on our convictions. Take the example of our personal finances. With ample liquidity pushing up markets of all kinds, we may question our conviction while doing the usual checks before investing. There are new technologies and new businesses which make life convenient for us, but before investing in them understand that the basic tenets of business don’t change. Every business seeks to make a profit. Some may say this time it is different. Some may say profits are not the only metric. These are challenges to our conviction. Then there are electronic mediums of exchange which masquerade as an asset class. Try and understand what you invest in. Just because it is break-through technology does not make a medium of exchange an asset class. These electronic mediums of exchange are most popular in the dark net/web, a place where all types of vices, crimes are facilitated. Mind you, the technology is break through but the use it is being put to is not so great, currently.

Some of the above mentioned instances may challenge our convictions when they make a lot of money for the investing public. But remember making money is hard, if it is seemingly easy to make, ask yourself why? Ask your self some tough questions after all it is hard earned money you are investing. When VCs and private investors invest in a businesses which offer discounts as a business model to acquire customers, it is essentially the transfer of money from rich investors to not-so-rich consumers. But when the not-so-rich consumer invests in the same business by subscribing to its equity offering it is reverse transfer of money from the not-so-rich consumer to rich investors. Is that so hard to understand? I may be wrong, but that is my conviction. Trying something new is good, but when it is about investing in markets where the risk of capital loss is always present, suspension of disbelief may be unwise. The key word here is investing (long-term) not speculation/trading (short-term). In investing conviction matters.

Source: bbc.com, asiafoundation.org, npr.org, wikipedia.org, pri.org, mothership.sg

Author: Ashish Joseph George, MMS, CFP. The views shared in this article are my personal views and don’t reflect the views of any organization. This is not an investment advice