Tuesday, March 24, 2015
Lee Kuan Yew
Lee Kuan Yew died yesterday at 91.
Lee Kuan Yew fought for independence for Singapore from the British which, together with Malaya, Sarawak and Sabah, created a new federation called Malaysia on 16 September 1963. He also fought for the independence of Singapore in Malaysia and finally got in on 9 August 1965 when Singapore was ejected from the Federation. The story of the development of Singapore after 1965 is the story of the greatness of Lee Kuan Yew.
The economics of the development of Singapore was fairly simple. Singapore has not much natural resources, so agriculture was not the way to go. The first means of survival was the development of the entrepot trade where Singapore became the hub for all shipments from Malaya, Sarawak, Sabah and Indonesia with the rest of the world. The development of the port was paramount. Singapore also built its economy on tourism with its duty-free shopping and the promotion of the charm of Singapore. Lee Kuan Yew made Singapore pristine for tourists. The next major stage of development was manufacturing, and capital was brought in to create high-paying jobs. Alongside that was the development of Singapore was an international financial centre, which took advantage of the management of money from Malaysia and Indonesia. He did not favour the current push of Singapore into the casino industry.
Lee Kuan Yew built Singapore on its comparative advantage of a strategic position in Southeast Asia, and created a rich and modern nation with its world-class efficiency, something which Michael Porter has coined as competitive advantage.
World-class efficiency is an excellent thing in the abstract because it is about everything performing like clockwork. For the whole system to work exactly how it was designed and to produce the desired results, no one is allowed to think or do otherwise, without threatening to destroy the system. Efficiency means everybody is taken care of, with a basic pay and housing and social amenities and an education system which is good meaning that it feeds into the operating system. No thinking outside the box.
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.
In this perspective, one must give very high marks to Lee Kuan Yew for having a vision and delivering that vision for Singapore and Singaporeans. He was focused and steadfast and the system he created was efficient in delivering his vision. In management terms, Lee Kuan Yew was an effective leader and an efficient deliverer of his results.
There were and are of course other visions which may or may not share with Lee Kuan Yew's view. This was and is normal. But these different views do not make Lee Kuan Yew's view less correct or less honourable. The test is in the results which were good. The test is in the way he delivered the results, and it was honourable. On all counts, one must give the greatest respects to Lee Kuan Yew for a life well fought and a life well lived. How we all envy him.
Posted by etheorist at 12:08 PM