Singapore's dynastic debate: Like father
like son? By Phar Kim Beng
On
August 12, Deputy Prime Minister Lee Hsien Loong, the
oldest son of Senior Minister Lee Kuan Yew, will
officially take over as the prime minister of Singapore
from Goh Chok Tong. The latter has been at the helm for
the past 14 years, but come next week, he will hand over
the reins before stepping into the role of senior
minister himself, replacing Lee Kuan Yew.
While
some, aware of the considerable reach held by the senior
Lee - the nation's first prime minister from 1969-90 -
have favored Lee Hsien Loong's appointment as a form of
dynastic succession, the phased transition of Goh has
done much to counter this perception.
Indeed,
Lee Hsien Loong, whose Chinese name means "emergent
dragon", was groomed as early as 1984 for a career in
politics, not by the senior Lee, but by Goh Chok Tong.
It was Goh, then a deputy prime minister, who
first encouraged Lee Hsien Loong to join public office,
a move initially resisted by Lee Kuan Yew for fear of
raising concerns about the practice of nepotism in his
administration.
Born in 1952, the younger Lee
studied mathematics and computer science at Cambridge
University and received a master's degree in public
administration from Harvard University's Kennedy School
of Government.
He began his career in the
Singapore Armed Forces and rose through the ranks to
become a brigadier-general. In 1984 he traded his
military position for a parliamentary post, serving only
six years before being appointed deputy prime minister.
In addition to this role, Lee Hsien Loong is currently
Singapore's finance minister and chairman of its central
bank.
While he is often seen as a throwback to
the more conservative days of his father, Lee Hsien
Loong has been quick to affirm that the present
generation of Singaporeans, being more exposed and
international in outlook, is different from that of his
father's time. This suggests a distinct change in
governing style that will require Lee Hsien Loong to be
less authoritarian than his father was.
Lee
Hsien Loong has been quick to stake his imprint on three
agendas. One of his government's top three priorities,
he has said, would be to boost Singapore's sagging
birthrate - which last year fell to its lowest level
since independence in 1965.
At 1.19 births per
couple, Singapore's birthrate in 2003 became the lowest
in the history of this ultramodern state. Should present
trends continue, Singapore's population, currently at 4
million, will be shrinking by 2020.
If the past
is any indication, Lee Hsien Loong's new cabinet is
poised to offer tax breaks and cash incentives for
Singaporeans to have more children. A new immigration
policy would also make it easier for professionals from
India, China and other countries to become Singaporean
citizens.
Lee Hsien Loong has also promised to
upgrade Singapore's relationship with China; the tie has
already seen Singapore's exports to the emerging Asian
powerhouse increase by 15% last year.
But this
move has encountered some difficulties of late, as Lee
Hsien Loong was accused of supporting the independent
forces in Taiwan when he made a private visit to meet
with Taiwanese President Chen Shui-bian on July 10.
The visit took a bad turn after Beijing claimed
Lee Hsien Loong was also accompanied by Tony Tan,
Singapore's defense minister, an accusation that
Singapore has vehemently denied. Beijing has put Lee
Hsien Loong on the defensive, affirming that Singapore
would have to "reassume all responsibilities" for the
visit.
Despite the setback, Lee Hsien Loong will
continue to woo China. He has also said he will pursue
"openness" and encourage more civic participation on the
domestic front. Critics, however, have long argued that
Singapore's pace of liberalization continues to be
glacially slow, and in the long run there may be little
that Lee Hsien Loong will actually achieve in the
political arena.
The ruling party has in effect
hobbled political dissent throughout Singapore's short
history by employing a range of electoral regulations
and court cases against opposition party leaders. Thus
Singaporeans have become too risk-averse to be involved
in politics.
As it is, the form of liberalization
that Lee Hsieng Loong speaks about would revolve on
allowing more women to participate in parliament, an
issue he has agreed to pursue with vigor.
Out of
a total 94 members of parliament (MPs), only 15 are
women - 10 elected and five nominated. As more women
distinguish themselves in their professional careers,
Lee Hsien Loong has promised to improved their access
and standing in parliament.
But in spite of Lee
Hsieng Loong's attempts to address these three issues, a
fourth is no less important: Singapore's overall
competitiveness in the international economy.
Since 1996 Singapore's authorities have
accelerated deregulation in the financial and
telecommunications sectors. Data from the US Department
of Commerce on returns to US companies show that,
compared with the Asian average, Singapore no longer
provides the superior rate of return it once did. Once a
premium economy charging premium prices, it is now a
less-than-premium economy - but is still charging
premium prices.
Although Lee Hsien Loong has
stated his determination to create a more flexible wage
structure, some analysts feel that such wage-centered
strategies may not suffice in reinventing the Singapore
economy. At best, such measures will merely be
perfunctory, because Singaporean wages to begin with
have not deviated from market levels. What matters more
are land, regulatory and transportation costs, which the
Singaporean government exercises considerable control
over.
According to Manu Bhaskaran, the head of
Washington-based advisory firm Centennial Research,
"Singapore's competitiveness problem is cumulatively due
to distortions in land prices [and its effects on wages
and rentals], high transportation costs resulting from
the government's forceful anti-congestion policies
[which drive up the cost of distribution and logistics]
and high regulatory costs."
Indeed, the prices
of major inputs - land, labor and capital - in Singapore
are substantially influenced by the government. This is
because the government, through its Housing Development
Authority, owns most of the land, effectively becoming
the monopoly supplier.
The incremental supply of
labor is controlled by the government through its grip
on foreign-worker inflows. Singapore's financial capital
is also heavily influenced by government, as the biggest
players are all government-linked companies with ties
that extend to the Lee family. Lee Hsien Loong's wife,
Madam Ho Ching, for instance, is the chairperson of
Temasek Holdings, Singapore's state-owned investment
company, and his brother Lee Hsien Yang is the chief
executive officer of Singapore Telecommunications Ltd
(SingTel). Lee Kuan Yew has also remained a key board
member of various government-linked companies.
Hence, without adequate measures to retrench the
role of the state, the economy under Lee Hsien Loong
will restructure in the manner it always has, with
companies laying off workers, cutting wages, squeezing
subcontractors' margins and forcing landlords to cut
rentals.
Aside from producing deflationary
headwinds in Singapore's economy, such moves are bound
to make Lee Hsien Loong appear even more aloof and
indifferent to the welfare of the average Singaporean -
a reputation he has been battling hard to disprove.
Meanwhile, some of the challenges facing
Singapore are growing due to Malaysia's and other
neighboring countries' plans to lower their operation
costs. These competitive challenges will encourage
further policy reforms to pare down the cost of
operation in Singapore.
But even then, to be
truly effective Lee Hsien Loong has to reconsider the
role of government in the economy, manifested most
profoundly in the form of powerful government-linked
companies such as Temasek, Sembawang and SingTel.
Without a bold and conceptual rethink of the
island state's economic and social policies, Lee Hsien
Loong will likely govern Singapore with the same
substance and essence of what his legendary father has
bequeathed. When that occurs, charges of dynastic
succession may well be too strong to rebuke.
(Copyright 2004 Asia Times Online Ltd. All
rights reserved. Please contact content@atimes.com for
information on our sales and syndication policies.)
