05 Aug Singapore’s Secret Sauce: Humble Leadership?
The Republic of Singapore was born on August 9, 1965 when it officially separated from Malaysia. The nation turns 50 this weekend. The island nation with a population of slightly more than 5 million and land area of less than 300 square miles (making it about 1/8 the size of Delaware) has been among the world’s most successful development stories.
Singapore boasts one of the world’s most successful economies by many metrics. It has averaged ~7% annual growth since the 1970s, has the third-highest GDP per capita in the world, and ranks second in global competitiveness according to the World Economic Forum (ahead of the United States!). Income per capita rose from ~$500 at its founding to over $50,000 today. It has been touted as the main alternative to democratic capitalism and serves as a role-model for many emerging countries.
But to think Singapore’s success can be easily emulated elsewhere would be foolish — if not dangerous. Some of the ingredients used in the Singaporean recipe may not be particularly useful in India or China, countries with populations more than 250 times larger than Singapore. Likewise, not all nations are can be located at a major intersection of global trade routes. But most nations can benefit from a deeper commitment to rule of law and liberal, open, anti-protectionist trade and investment policies.
So what lessons can we learn (and NOT learn) from Singapore’s stunning success?
First, Singapore demonstrates that “workfare” is better than welfare. Singapore has demonstrated the power of developing safety nets that emphasize self-reliance and inter-generational equity. This has proven remarkably effective at securing jobs. Singapore currently boasts an astounding unemployment rate of 1.9%. This is in part due to its philosophy that work is the best form of social assistance. To support this system, Singapore has forced savings – employees under the age of 50 are required to set aside 20% of their wages and employers must contribute an additional 16%, placed into accounts that address specific needs such as healthcare (7% of the 36% total goes towards this), helping Singaporeans budget for their own healthcare needs. By having each generation pay its own bills, the risk of long-term instability arising from an unsustainable pension system is mitigated.
Second, higher pay for public servants lowers corruption. Singapore’s Prime Minister Lee Hsien Loong made $2.4 million in 2012 (in comparison, President Obama’s salary of $400,000 is 17% of that!). This is a result of Singaporean founder Lee Kuan Yew’s 1994 policy that pegged the salaries of top government officials to what they would earn at the top of the private sector. Although there have been cuts since then, the pay often attracts the “best and the brightest” – and may serve as a possible way to deter politicians from personally skimming contracts for personal benefit.
But some of the points highlighted as key ingredients of Singaporean success have limited relevance outside of the city state.
For instance, the fact that autocratic control facilitated rapid development in Singapore is by no means an endorsement that dictatorships are the way to go. Lee Kuan Yew’s initial reasoning of creating a dictatorship was that since Singapore was composed of so many fractured immigrant groups, if democracy was implemented, everyone would just vote by ethnic group. But the reality is that Singapore may have just been lucky in getting an informed, enlightened, and magnanimous dictator. Assuming dictators are the way to rapid advancement over long periods of time may be naive.
Or what about public housing? Singapore is one of the only countries in the world with almost-universal affordable housing, despite land constraints. Over 80% of the population lives in public housing and 90% of Singaporeans own their own homes. One of Lee Kuan Yew’s basic beliefs was that a society that had something to lose would be more willing to defend itself, preserve itself, and work hard to promote itself. However, this model may be unrealistic for larger countries. Simply housing a quarter of India’s population would require 312.5 million dwellings, and a quarter of China’s population is almost 340 million people! Singapore itself, with a population .04% of that of China’s, is even now struggling to keep pace with its recent population increase. Singaporean-style public housing may not be scalable.
And as for education policy, the country’s policies seem to be working: Singaporeans consistently score in the top percentiles worldwide in math and science tests. Singapore’s education system has also been widely praised for its focus on teacher quality and development. Despite these positives, Singapore’s education does not consistently provide students a broad worldview. Singaporeans themselves have referred to it as the “creativity crisis.” And despite recent efforts by Singapore to adopt less siloed approaches to education, such as YaleNUSCollege, the first full-time residential liberal arts college in Asia, Singapore still has a long way to go. Singapore’s education policy may have helped it get to where it is, but it may not prove useful to get it where it wants to go. It needs to move beyond early specialization and towards a more even weighting between breadth and depth.
Singapore’s success may be attributable to a humble, open-minded, empathetic, and enlightened leadership that genuinely cared about the population, its well-being, and its future prospects.
Ultimately, Singapore’s successful transformation from swamp to modern economy may not have been about workfare, civil service pay, housing policies, or education systems. In fact, it may simply have been that the leaders of the country were humble and empathetic with the people they represented. They truly cared about the population, its well-being, and its future prospects.
Perhaps it was the race riots in the 1960s, or the humble beginnings in which Singaporeans lacked basic comforts, but the founding leaders were “more down to earth, more grounded, [and] less self-assured or arrogant.” The results speak for themselves.