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Wednesday, March 25, 2015

What DAP Can Learn From Singapore To Rule Putrajaya?




Lee Kuan Yew (LKY) was a man who was respected, but importantly not loved by all. He used fear to stay in power. From the inception of Singapore’s independence – when it was expelled from Malaysia – the ideas of ‘vulnerability’ and ‘survival’ were used to justify decisions. He promoted the idea that Singapore had to have a strong armed forces, requiring national service in 1967, to protect itself as a nation surrounded by the perceived threat of its Malay neighbors. 

The enemies outside were matched by those inside, who had to be displaced and in some cases detained. Among the most controversial were the arrests of men labeled as communists in Operation Coldstore of 1963 and Operation Spectrum of 1987 (a.k.a. the ‘Marxist Conspiracy’) that targeted social activists who promoted greater social equality and were seen as challenging LKY’s People’s Action Party’s (PAP) authority. 

Many others from opposition politics, business to academia faced the wrath for challenging and questioning LKY, his PAP and the politicized decisions of its institutions, castigated in the government controlled media, removed from position, forced to live in exile and, in some cases, sued and bankrupted. In the relatively small city state, it did not take much to instill a political culture of fear by making a few examples.

A main point of contention goes that LKY sparred with Western critics over democracy and human rights, with LKY dismissing these ideas as not part of ‘Asia’s values.’ The debate was never about differences in values, but the justification of holding power in the hands of a few for nearly five decades. Singapore’s political model is at its foundation about the elites, with Lee, his family and loyalists at the core. In recent years, reports in Singapore have highlighted a growing trust deficit in the PAP government that LKY founded. The real deficit that defined LKY and became embedded within the party he molded is that he never fundamentally trusted his people.

The group that received the special focus of LKY’s distrust was the Malay population, who now comprise over 10% of the country’s population. Even as LKY matured as a politician, he continued to reinforce negative stereotypes of this community that rioted over their grievances in 1950, 1964 and 1969 when LKY was in his early years in power, and with whom he expressed hard judgments about their religion, Islam. 

In the heyday of Singapore’s economic miracle, the 1970s through the 1990s, the LKY PAP government worked to win over the trust of its people. It did so by providing for the basic welfare of its citizens, with an impressive housing program, affordable food prices, a living wage, job security, safety, education and opportunity. This involved hard work of LKY’s founding team of PAP cadre, as well as the sacrifice of ordinary Singaporeans. It also reflected the wise realization of LKY that fear was not enough to stay in power. There needed to be a healthy balance of deliverable. The LKY decades of economic growth translated into real rewards – at least through the 1980s.

Singapore’s trajectory of sharing the benefits of development has followed a pattern of diminishing returns, as the country now boasts the highest per capita of millionaires and is the world’s most expensive city, with a large number its citizens unable to save and afford the lifestyle promised in the nation’s early narrative. As much as LKY deserves credit for Singapore’s success, he also should be seen to be part of today’s shortcomings. 

Elitism has breed arrogance, and a distance between those in power and those governed. Most of the new leaders of the PAP have come from subsequent wealthy generations that do not fully understand the sacrifices of the country’s working poor – shocking in number – and the obstacles elderly and young people face in an era of high costs. Years of following the LKY’s example and being told that the PAP is made up of the ‘best and brightest’ has imbued a mindset of superiority, a lack of empathy, and frequent dismissal of difference in engagement with the public.

While LKY’s son Prime Minister Lee Hsien Loong has worked to win over support, he has suffered consecutive drops of support in the two elections he has led since he assumed office, failing to match the 75% popular vote height of the predecessor Goh Chok Tong in 2001. Unlike in the information controlled era of his father, Lee Hsien Loong is not able to effectively censor and limit public discussions in today’s wired and connected Singapore. His recent expansion of social services and incentive packages that provide small sums for pensioners, modest support for health and childcare and tax reductions for the middle class are a drop in the bucket for the growing grievances and costs faced by ordinary citizens.

This has to do in part with the challenge Lee Hsien Loong faces in dealing with his father’s legacy. In 2007 LKY claimed that he governed without ideology. This was not quite true. The ideological foundation of LKY’s pragmatic tenure was materialism. This obsession with money, saving it and forcing the public to save it in rigid regulated ways, assuring that government funds were only given to those ‘worthy’ and loyal and defining the value of the performance of his government ministers by pegging their salaries to growth numbers comprised the lifeblood of LKY’s state. 

With annual ‘bonuses’ to perform, there is a focus on short-term gains rather than long-term investments. The irony is that it is not even clear how much money the government of Singapore and its linked companies actually have. Singapore is one of the few countries in the world that does not follow the International Monetary Fund guidelines on its budget reporting. It also does not transparently report losses in many of the financial accounts of the government linked companies (GLCs). Lee Hsien Loong has had to tackle head-on the ingrained pattern of limited government spending on social welfare and services, as he attempts to move away from his father’s restrictive parsimony and secretive mindset that originated from a lack of trust in people.

Lee Hsien Loong also has to address the problems of a government dominated economy. Singapore Inc. emerged out of the political economy LKY put in place, with the government and its linked companies controlling over half the country’s economy and undercutting almost all domestic business. LKY did not trust local capital, and did not want to strengthen an alternative power center to his own. As such, Singapore’s economy is not a genuinely competitive one. It favors big business, especially property developers, and those allied with government rather than independent entrepreneurs. Those in the system have apparently disproportionately benefited from it, although the exact amounts and assets remain unknown. The accumulated assets of individuals remain hidden as the estate tax was removed in 2008. 

What is known is that workers have limited rights in the LKY-shaped political economy. A recent example is the sexual harassment bill passed in parliament that excludes employer liability. The harsh response to the bus driver strike in in 2012 is another. Much is made about the limited corruption of Singapore, but few appreciate that the country ranks high on theEconomist crony-capitalism index, an important outgrowth of the government dominance of the economy. The ties between companies and government are close, at times with government and family members on their boards and a revolving door that never really closes.

Singapore’s economy also favors foreigners. LKY was to start this trend, with the appeal to outsiders for capital rather than a focus on domestic business. Foreigners may have been easier to engage, as they could always be kicked out. Foreign investment has been extremely important in Singapore’s growth numbers initially in manufacturing and later in services. To maintain global competitiveness, keep wages low and maintain high growth numbers, Singapore also turned to foreign labor – cheap workers to staff their construction sectors and to work as domestic help and foreign talent to bring in ideas and the occasional sports medal. 

This prioritization of outsiders has fostered resentment. When LKY assumed office he worked to force a nation, but with his passing many in Singapore feel the government he left behind is working for others and undermining the fabric of the nation. The crowded trains, strain on services and displacement of Singaporeans in the job market and advancement have angered many, who now see LKY’s legacy as one that in fact left many Singaporeans vulnerable and worried about survival.

Singapore's problem is what do you do after you have hit full employment. Economy theory says you have achieved your policy objective and therefore you should relax.

At full employment, the policy objective then switched to the corporate objective which is to sustain the rate of growth of profit. In political terms, this objective is translated as GDP growth.

It was nor should it be surprising that the People's Action Party (PAP) has made sustaining the GDP growth the raison detre for its continuing mandate to rule Singapore. For the economy to grow after full employment, there is a need to import foreign workers and professionals. This deliberate infusion of more foreign people into a nation of migrants creates a new dynamics which the government of the day has to try to resolve.

The important point is that if sustained GDP growth is important for Singapore, then Singapore must find a way not to view the new influx of people as foreign workers but as new citizens. This, to be fair, the Singapore government is doing. But the newer people are in newer industries which are necessarily more productive than the older industries that the older citizens are stuck in. Herein lies the folder for the opposition. The important for Singapore today is the reconciliation and resolution of the generational gaps of migrants in Singapore, in a city state that is made up of migrants.

No one can take away LKY’s contributions. He lived a long meaningful life, and shaped the lives of all Singaporeans. This does not mean that there is agreement on what he left behind. Singapore now faces the challenge of moving beyond LKY’s ideas and shaping a more promising future for all of its citizens. An integral part of this dynamic will be moving away from fear, promoting more effective policies for inclusion in the economy and society and building trust. It starts with placing more trust in Singaporeans.

It is arguably the latter that is the hardest. LKY lived in an era where societies trusted their leaders. He was given the benefit of the doubt. The PAP remains a relatively closed institution, with the distrust of those not inside deeply embedded. Today in the age of social media and instant messaging there is not as much leeway to work behind closed doors. There is an urgent need to forge genuine dialogue, connectivity and understanding that moves beyond materialism, and reignites the sense of belonging that LKY forged in his early years.

Singapore today has become a more politically divided nation, with those who strongly defend LKY’s incumbent government, die-hard opponents and the majority in the middle. As the country marks its 50th year it moves toward a different narrative, the task at hand is to forge a new Singapore story, one in which LKY is a valued part of its past, but not a constraint on the dreams and aspirations of Singaporeans’ future.

Adapted from New Mandala and Blog Economic Policy

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