speri.comment: the political economy blog

Singaporean lessons?

Singapore is often held up as a model of development, and it does indeed carry some interesting lessons for other countries, both small and large, to consider

Dr Matthew L. Bishop, Associate Fellow, SPERI & Senior Lecturer in International Politics, University of Sheffield

Matthew BishopA question my Caribbean students often ask is: ‘why can’t we be more like Singapore?’  By this, they mean a small country with high levels of development, which is safe, clean, and generates growth and rising living standards for the vast majority of its people.

My stock response usually focuses on the fact that development comes in many forms, and Singapore hasn’t had anywhere near the same cultural impact on the world as Jamaica, Trinidad, Haiti or Cuba.  Trinidad alone has invented half a dozen distinct genres of music, including calypso, steel pan and soca, not to mention one of the world’s greatest carnivals.

Still, the point remains: Singapore has had remarkable economic success over the past few decades.  This is something that Lino Briguglio of the Islands and Small States Institute at the University of Malta once called the ‘Singapore Paradox’.  That is, a country which has registered very high rates of growth and development, despite being small and vulnerable to exogenous shocks.

Although this analysis is right, it has never been clear to me why this achievement is paradoxical. Size is actually a poor indicator of development: there are many wealthy small countries and lots of very poor larger ones.  Consequently, although small states remain vulnerable – in the sense of being disproportionately exposed to external environmental and economic threats – on account of their size, this does not preclude them from enjoying high levels of development.

I was fortunate to travel to Singapore recently for a conference and I gave these issues a lot of thought during my visit.  The nature of its success – although not easily replicable, for reasons of history and geography – does carry some important lessons, for Britain as well as the Caribbean.

The first relates to the character of the state, its relationship with the market, and the logic of the patterns of accumulation that this facilitates.  Singapore, like the other ‘Asian Tigers’, has been driven since independence by two intertwined tendencies: a highly interventionist state that purposefully shapes the contours of the country’s political economy in developmentalist ways, operating in tandem with an extremely open, freewheeling commercial brand of capitalism.  This is why it has worked so well: a state and market in symbiosis, rather than conflict.  In other words, while businesspeople are free to build fortunes and trade flourishes, the state retains an iron grip on certain critical functions.

One example is housing: I was struck, since my last visit in 2009, by how many enormous Housing and Development Board (HDB) apartment complexes are being built.  Just like in Britain, people can exercise a right to buy if they wish, often using money from the collective national insurance scheme, the Central Provident Fund (CPF).  And yet, with the state clearly unwilling to leave the housing of a densely populated territory to the vagaries of the market, these apartments are replenished continually.  Although HDBs rise high, they are not ghettoes: they are often in prime areas, and are well integrated with amenities for the people who live in them.

The second lesson relates to the nature of governance.  Although Singapore is, essentially, an authoritarian state, its governance is far better than that of many nominal democracies.  It regularly tops lists of countries with low levels of corruption; it has a well-developed set of anti-graft measures; and it frequently conducts high-profile prosecutions of white-collar criminals.

This reinforces the logic described above and stands in marked contrast to the kind of looting of the state evident throughout the Caribbean, where public contracts are the main driver of economic growth and tend to be directed, in clientelist fashion, to political acolytes.  Something similar is increasingly in evidence in the UK, too, as politicians with links to private health companies (to use one insidious example) gleefully dismantle the National Health Service.

The final lesson relates to capital, and specifically the development of human capital via an education system that is continuously reformed and upgraded ‘to keep pace with contemporary challenges’.  All countries, of course, pay lip service to such a goal, but Singapore has developed a genuinely world-leading higher education sector, with two universities in the top 50 of the QS World University rankings.  This is an astonishing achievement: it isn’t until position 141 (occupied by the University of Cape Town) that you meet any institutions from Africa or Latin America, and my employer, the University of the West Indies – which was established in its modern form in the early 1960s, just like the National University of Singapore (position 22) – does not even make it onto the list, something that has many clever people here in Trinidad worried and searching for solutions.

This capacity is complemented by what is perhaps the most striking feature of Singapore’s labour force: over a third of workers are highly skilled expatriates.  The discourse around immigration is entirely different to what one finds elsewhere: notwithstanding that there exists some tension, there is, nevertheless, a general recognition that, without these imported skills, the huge amounts of investment flowing into the economy would vanish, taking with it many of the highly-paid jobs that many Singaporeans themselves also enjoy.

Compare all of this to Britain: as Oliver Huitson evocatively puts it, the country is today ‘a low wage, low skill, low productivity economy with a poor education system’.  Moreover it is, he suggests, governed by ‘a state which focuses on short-term profit over long-term productivity and its economic model is essentially internal asset-stripping’.

For my Caribbean students, then, the broader lesson is that you can be like Singapore if you dramatically reform the education system along with the logic of the state, both extremely difficult given the embedded historical and institutional legacies that endure in this region.  Most strikingly, perhaps, you also have to convince people that foreigners are not stealing the (scarce) jobs of locals: rather, they bring human and finance capital with them, attracting yet more of both, thereby growing the pie for everyone.  This is, of course, a hard sell in most places with entrenched un- and under-employment.

A final question: even if you can be like Singapore, why should you want to?  For all of its virtues, bubbling under the surface are myriad tensions, linked to emerging patterns of inequality, increased exclusion and disaffection – especially of low-wage workers like domestic servants and migrant labourers – not to mention the endurance of capital and corporal punishment.  These are direct legacies of the dysfunctional elements of the authoritarian political settlement.

Singapore is also a remarkably quiet place, in a physical sense.  The kind of free and often highly extrovert expression, relentless noise and booming music that are omnipresent in the Caribbean have little place in what is a rather conformist, ordered – and highly materialistic – society.  As we’ve just enjoyed the 2015 Carnival season in Trinidad, that at least should give my students pause for thought.

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