[PEN-L:30575] RE: Re: Re: Singapore

[Bill Rosenberg <bill.rosenberg@xxxxxxxxxxxxxxxx>]

Singapore also has substantial government ownership of industry -
Government-linked companies, according to the WTO's March 2000 Trade
Policy Review of Singapore [sorry to quote such a source!], "some of
which are the largest in Singapore ... account for around 25% of the
market capitalization of the Stock Exchange of Singapore". It has a
strong strategic investment policy, the government aiming to encourage
high value-added manufacturing and services. Neither are things as
"free-market" as they are sometimes made out to be. There's a bit more
about this in a paper I put together regarding New Zealand's FTA with
Singapore (now signed) - see
http://canterbury.cyberplace.org.nz/community/CAFCA/publications/Trade/i
ndex.html

Though I think Lee Kwan Yew started off life as a socialist, that is
long gone and the picture I get (without having Anthony's direct
knowledge) is consistent with Anthony's - authoritarian state capitalism
which has been very successful in raising living standards.

Bill

> -----Original Message-----
> From: Anthony D'Costa [mailto:dcosta@xxxxxxxxxxxxxxxx]
> Sent: Thursday, 26 September 2002 17:12
> To: pen-l@xxxxxxxxxxxxxxxxxxx
> Subject: [PEN-L:30571] Re: Re: Singapore
>
> Let me see how best to respond to these issues.  My remarks off the
> cuff are inserted below:  Cheers, Anthony
>
>
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> xxxxx
> 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
>
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> xxxxx
>
> 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.
>
> >
> >