Yen Low
We have many people to thank for getting Singapore out of the Third World – noticed that I did not say “into the First World” but I will elaborate on that later. Our forefathers who took a risk for greener pastures, the samsui women who built our buildings, the courageous men who stepped forward to serve… Public service was a calling that need not speak of dollars and cents. Teachers shared their knowledge; doctors healed the sick; government served the people. So we built a nation, with very little except blood, sweat and tears.
Out of Third World
Remembering the Samsui Women...
Not to wax lyrical, I’m sure it was a tumultuous period and there was a lot of ugliness. But my point is, we owe it to everyone, including the late Dr Goh Keng and the ex-samsui woman now collecting cardboard for a living, who contributed. The pre-PAP leaders won our independence at a timely juncture in history when the British were giving up their colonies.
The early leaders of PAP which remained in power since 1959, led us through the difficult early stages of nation building. It was during this period that we saw the institution of many policies that will later come to define Singapore, namely public housing, the central provident fund (CPF), and national service – the brainchildren of a very talented economist, Dr Goh Keng Swee. PAP fronted by Lee Kuan Yew heralded in a new era of prosperity, getting us out of the Third World. So by the 1990s, we looked forward to joining the ranks of the First World and aspired to “Swiss standard of living”.
We continued to maintain impressive GDP growth, sans the Asian economic crisis and the subprime crisis. GDP per capita was always among the top. The statistics may suggest a first world but it doesn’t feel that we have attained first world living standards when most people have to worry about aging, post-retirement and health care costs, despite saving a good 1/3 of their pay in CPF.
Input-driven economic growth
So what happened? We got out of the Third World, but never transited to the First World. It turned out that getting out of Third World was relatively easy, once we got the fundamentals right. Starting from a very low base, it was easy to grow several percentage points over the previous year’s performance, akin to a 50% improvement when you score 60 points on a test, up from 40 points on the previous one.
Much of our growth then was input driven. Improved basic healthcare lowered mortality and allowed more people to be economically productive. Girls were educated and eventually doubled the workforce. Foreign investments, sweetened with generous tax incentives, flowed in to provide jobs for the majority that our basic education had prepared for. These inputs, however, are one-time events. We cannot double our workforce every generation.
Increasingly, more countries also began to develop their economies using a similar strategy: improve education, health care, offer tax incentives to woo foreign investors. So we worked harder to wring more from our winning formula: further improve education, health care, make ourselves even more attractive to foreign investors.
To meet every new wave, we pour in money to attract MNCs of key industries and train more people to meet their demands. Unfortunately, we never grew local businesses to complement the MNCs. Case in point: the electronics industry. Our chips never shrank small enough to compete with the likes of Taiwan who have long surpassed us. The last of the hard disk manufacturers have also pulled out, retrenching many of our semi-skilled workers. Why?
Ask yourself where our finest engineering minds had gone to. The government – instead of working as real engineers – starving the local industries of talent. Government-linked companies with inherent advantages also made it harder for small local businesses to compete. It was only in the 2000s that government started to actively encourage local entrepreneurship.
So 50 years later, we are still very much dependent on MNCs and this meant that we have to continue to meet their demands for cheaper labour and lower taxes, etc. MNCs are for-profit corporations and are not beholden to providing any place, especially one that they have no national stake in.
Foreigners
The original intention of bringing foreign expertise was a good thing – MNCs to impart technological know-how and foreign talents whom locals can exchange ideas with and learn from. Singapore has always thrived on having many foreigners since its early days of being a port. So why is there a sudden problem with foreigners?
Our low birth rate has often been cited as the reason for needing more immigrants. I think it is equally preposterous to blame PAP for the two-child policy and our people for not having enough children.
The birth rate would have fallen anyway, as any developed country would and women join the workforce. The problem is that it becomes difficult to sustain high economic growth with aging population demographics. That is why most developed countries, such as Japan and Germany, post only modest economic growth, mostly driven by productivity gains. To counter that, Singapore decided to boost input-driven economic growth by increasing the population through immigration.
The floodgates opened to meet our target population of 6.5 million people, up from the steady state population of 3 million people. Foreigner policies were relaxed. The most significant of which is the S-pass to allow in semi-skilled foreign workers. Note that “semi-skilled” covers a broad spectrum of jobs. Companies recognize that they could lower labour costs hiring foreign workers as long as they maintain a certain foreign-local quota (varies with industry and some do not require a local majority).
Soon, coffee shops, shopping malls, engineering firms, and even hospitals are overrun with foreign workers. Because the aim is to lower labour costs and not necessarily to improve product quality, many of those hired, both foreign and local, are indeed “semi-skilled”. Not in tuned with the local lingo has also proven to be a barrier for many foreigners in their workplace. The result is a general decline in standards and productivity, exactly the opposite of what a developed country should be doing.
Conclusion
My point is: don’t be fooled by high economic growth for progress because there are many elements of a First World society that we need to work on: improve productivity, nurture a flourishing arts scene, encourage vibrant political discourse, and be an inclusive society (that includes welcoming foreigners).
Such things will not happen overnight. But there are things we can do now to nudge us in the right direction.
Come this election, you can have a say in where you want to go. The chance and right to vote did not come easy for many. After the elections, find your calling, rise above the dollars and cents and be the best that you can be. Nurture our talents, give them the best training/education and encourage them to chase their passion, be it engineering or styling hair, instead of always choosing the “safe” option of a cushy job. It is then that we can build a nation of our best, our own MNCs, befitting of a First World nation.
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Photo courtesy of the Good Paper.
