Singapore a poor model for
Myanmar By William Barnes
BANGKOK - When Myanmar's reforming
President Thein Sein visited Singapore in January,
officials there offered lessons on how to
modernize and attract foreign investment.
Singapore's eagerness to court Myanmar's ruling
generals has been a diplomatic feature of the
international community's two decades of trying to
crack open the reclusive country.
Now that
Asia's "next economic frontier" has started to
open up, Singapore - where Myanmar's senior
generals bank and seek
hospital treatment - is keen
to offer itself as a dazzling example of how to
become a first-world economy within a couple of
generations.
It's a siren call that should
be resisted, said Rodney King, the Australian
author of the controversial book Singapore:
Myth and Reality.
"Singapore is not a
good development model and not one a developing
country should follow. Singapore has basically
conned the world about its nation-building
achievement," said King. "It is frightening that
they should regard Singapore as a good model to
follow."
Years of robust growth in
Singapore were driven initially by waves of
foreign capital into the city-state and more
recently by the import of foreign workers, who now
make up one-third of the population. The
government's jealous husbanding of much of the
economy, meanwhile, has rendered impotent much of
the nation's faculty for creative business.
"Its entrepreneurial, innovative capacity
is quite small. It's got a very small local
private sector, unlike say South Korea and Taiwan,
where there are vigorous entrepreneurial cultures.
In Singapore, they don't really have that," said
King, who spent many years working in the
island-state.
It is unlikely that
Singapore says this in its diplomatic and
commercial outreach to Myanmar. Ashfaqur Rahman,
chairman of the Center for Foreign Affairs Studies
in Bangladesh, had no doubt what Singapore hopes
for when he noted how it shunned the previous
Western policy of making a pariah of the ruling
junta.
"The basis of this strategy was to
gain from a relationship which was essentially
economic. Singapore invested heavily in Myanmar
and traded with her. It even pushed other
[Association of Southeast Asian Nations] members
to allow Myanmar to join the regional
organization."
Myanmar citizens, who for
decades have been mired in corrupt economic
lethargy, are no doubt dazzled by Singapore's
success in turning a former modest British trading
hub into a confident modern nation with a per
capita income among the highest in the world.
Remarkably an island state with just 1% of
Southeast Asia's population still attracts nearly
half of its foreign direct investment. Yet this
success has come "at considerable costs in terms
of independent development, human rights, freedom,
and workers rights", according to an academic
paper published last year.
That part of
the economy not in foreign hands is dominated by
government-controlled institutions run by the
local nomenklatura. Keeping an every present watch
is the People's Action Party (PAP), which has run
virtually a one-party state since independence.
"One of the key features of the Singapore
model is that the commanding heights of the
economy are controlled by the state - directly or
indirectly. Burma [Myanmar] had all its state
enterprises taken over in 1962 by [the late
general] Ne Win, which has just dragged the
economy into the ground," said King.
"If
they were going to follow the Singapore model they
would be just repeating the mistakes that they
have already made. Singapore crushes individual
enterprise but [Myanmar] is going to need all the
enterprise it can possibly muster to get over 50
years of chronic warfare and political
repression."
King's criticism might have
less sting given Singapore's wealth were it not
also echoed by an increasing number of complaints
rising from within the city-state. Indeed, many
now question whether the "Singapore model" is
still valid. In last year's general election the
ruling party won its lowest share of the vote
since independence.
Productivity gains
have been notoriously weak for decades, hardly
what the casual observer might imagine from a
country regularly ranked as one of the most
competitive.
The American economist Paul
Krugman infuriated Singapore's founding father Lee
Kuan Yew 20 years ago by claiming Singapore's
growth could be explained by more of everything -
capital and labor - except efficiency.
Ever since the launch of the "Teamy the
Productivity Bee" campaign three decades ago, the
government mantra has been to focus on generating
greater added value. Despite myriad training
initiatives, worker productivity has barely grown
by 1% a year in the new millennium.
Growth
has been sustained by an inflow of foreigners that
has doubled the island's population since 1980,
with foreigners and non-Singapore born citizens
now representing three-fifths of the population.
"We've grown in the last five years by just
importing labor," said Lee Kuan Yew himself in
2010.
The country arguably hasn't
maximized that influx. "They imported all these
scientists and technicians from all over the world
but the outcome has been fairly modest. These
people have found working in a bureaucratic
structure quite stifling," said King. The
authorities "spend tons of money on resources but
the ambience isn't there really. They seem to be
able to attract talent, but when they get them
they can't operate the way that they want."
Equality gap Singapore shone in
the headlines again recently when one of
Facebook's founders, Eduardo Saverin, was revealed
to have given up his United States passport in
favor of residency in Singapore to "invest like
crazy."
Saverin joins an elite of
super-rich floating on top of an ordinary public,
many of whom struggle to make ends meet in an
increasingly expensive city. The bottom half of
the population experienced either falling real
income, or no gain in income, over most of the
last decade.
High inequality levels have
combined with falling social mobility, reinforcing
the grip of the privileged upper class to the
point where even the government recognizes this
threatens the social compact.
One of the
city-state's most respected economists, Professor
Lim Chong Yah, said in April that the city's Gini
coefficient (a measure of equality) of 0.47 was
approaching the "danger level" of 0.5 when
typically income inequality starts to tear at a
country's social fabric. He has advocated a
"shock" therapy of pay rises for workers and tax
penalties for the rich.
King estimates
one-fifth of the population lives in poverty as
measured by Organization for Economic Cooperation
and Development standards. "They have been able to
attracts lots of foreign direct investment … at
the cost of Singaporean living standards."
Singapore may now have passed some sort of
inflexion point. The first two generations of PAP
leaders have faded from the scene - aside of
course from the Senior Lee himself - and the
younger leaders do not seem to hold the power to
cow the population as in the past.
"This
has been a country of frightened, intimidated
people. In the 1950s and '60s, Singaporeans were
feisty, gung-ho people but Lee and co killed their
spirit," said King.
This past timidity in
the face of authority permitted a series of policy
mistakes followed by awkward U-turns. One notable
quirk came in 1970 when Lee discouraged big
families after deciding the population was too
high, only years later changing his mind to beg
(rather comically) Singaporeans to breed more
freely.
Over the years, careful observers
have pointed out that Singapore's "success" owed
much to being a small, compact island that made
political and social control relatively easy, so
enabling it to experiment with robust but
effective national development strategies.
By contrast, Myanmar is an infinitely more
complicated jigsaw of ethnic, geographic, economic
and historic problems in a space that is
one-thousand times bigger. "Vast, sprawling
countries like Indonesia, (Myanmar) and Thailand …
would find such strategies a great deal harder to
implement," said King.
To be sure,
Singapore's founding myth as a mosquito-infested
swamp of palm plantations and kampong dwellers in
1965 is a compelling one for underdeveloped
countries like Myanmar eager to learn the secrets
of rapid enrichment.
Nothing could be
further from the truth, however. In 1965,
Singapore was one of the most developed cities in
Asia in terms of industrial development, living
standards and literacy of the population, argues
King.
"Singapore's nation-building
success, such as it is, was based on a set of
highly favorable circumstances that are unlikely
to be found elsewhere," he said.
Singapore
surely must be praised for many things, not least
its relatively clean dealings in a region
benighted by corruption. But, if King's assessment
is correct, then Myanmar might be wise to examine
carefully the advice from an authoritarian state
of growing inequality struggling with low
productivity and rising social unhappiness.
William Barnes is a veteran
Bangkok-based journalist.
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