Is the Singapore Model Sustainable for Future Economic Growth?

Is the Singapore Model Sustainable?

Beijing-born Massachusetts Institute of Technology (MIT) political economist Professor Huang Yasheng had criticized Singapore 's state-linked enterprise model dominated by its two giant sovereign wealth funds GIC and Temasek Holdings as a sure-fire way to stifle the economy in the long run.

In a recent speech made at the Civil Service College, Prof Huang urged Singapore to rethink the Temasek model and warns that Singapore's state management model has milked this system for all it is worth.

The private sector is the best way to grow the economy. It has the most productive, most innovative and entrepreneurial culture. The state-owned enterprise system doesn't give you that. You are already hitting the wall. Retaining this strategy could mean sacrificing future growth that is possible only through a bigger, more dynamic private sector, he said.

Prof Huang felt that governments should not get involved in venture financing as they are using taxpayers' monies and questions how the government can defend its decisions to invest in failing individuals and projects.

Nine out of 10 investment projects fail. Does the government have such a high tolerance for risk? It's taxpayers' money, right? I don't think, politically, it's legitimate for the government to keep investing in failing individuals and failing projects. How do you defend these decisions, he asked.

Temasek Holdings is led by the wife of Singapore's prime minister Ho Ching. It had lost billions of dollars in failed overseas investments such as Thailand's Shin Corp, Australia's ABC learning, and U.S's Merrill Lynch. Ho Ching is an engineer by training.

GIC has been headed by Lee Kuan Yew since its inception in 1981, a lawyer by profession who has never worked in the financial industry before.

Prof Huang opined that Singapore should expand its private sector in order to compete with China and India :

Maybe a better way is for the government to fund more basic research and then allow universities, private equity firms, venture capital firms and rich individuals to take care of the rest. That is because even when the state sector is well managed, it is not as innovative as the private sector, he says. From a technological development point of view, you need a bigger private sector to compete, to come up with new products, processes and technologies, to better compete with India and China .

Under Singapore's state-model enterprise, civil servants are often placed in leadership positions in its major state-linked companies and research agencies. For example, the current head of A*STAR is Lim Chuan Poh, a former Chief of Army with no prior experience in the private sector.

Prof Huang felt that creative thinking is often in short supply with civil servants leading the charge due to the culture they are immersed in:

Civil service culture is about discipline. It's about execution. It's about efficiency. Entrepreneurial culture is about challenging the authorities, questioning the existing ways of doing businesses, moving away from the routines and norms. It's about the unconventional, rebellious and diverse. These values are almost polar opposites.

He also criticized Singapore's education system for not producing diversity in ideas and unconventional ways of solving problems and warns that Singapore risks going down in history as an economic has-been if it fails to exploit the potential of its private sector.

Prof Huang had hit the nail on the right spot about the macroeconomic problems plaguing Singapore “its one-dimensional political economy. However, he is not aware of the political implications of the Temasek model which serves two purposes: one, to ensure the continued political hegemony of the ruling party, or rather a select group of people and two, to keep the citizenry weak so that no alternative centers of power can emerge to challenge the status quo.

As entrepreneurs are fiercely independent, unconventional and rebellious by nature, they cannot be brought easily under control or co-opted into the system. Having a few rich self-make millionaires running around will pose a threat to the political elite, as Thailand's Thaksin Shinawatra and South Korea 's Lee Myuang Bak had shown.

Unfortunately, for a repressive, insecure and paranoid regime which is bent on complete control and dominance at all costs, it is unlikely to see the profound wisdom in Prof Huang's words and Singapore will have to pay the price for its ignorance one day when we are overshadowed completely by China and India .

MySinChew: A Malaysian, again? — Lim Mun Fah

A Malaysian, again? — Lim Mun Fah

JAN 15 — When the Singapore-Cambridge General Certificate of Education (Ordinary Level) Examination results were released last year, the country’s leading Chinese-language newspaper Lianhe Zaobao used the headline: Top O-Level student again a Malaysian”.

I was attracted by the word “again”.

Her name is Lai Kai Rou and same as top student last year Haw Sue Hern, she studied in SRJK (C) Lick Hung before going to study in Singapore.

The report stressed that in SRJK (C) Lick Hung, everything is taught in Chinese except for English subject. I would like to add that SRJK (C) Lick Hung is a Chinese primary school.

Lai, who has again won glory for the country, is one of the 17 foreign students among the 43 top O-Level scorers.

I must mention here that among the above-mentioned 17 foreign students, 11 of them are from China and six of them are Malaysians. The number is equal to 40 per cent of the 43 top scorers.

Singaporeans exclaimed in surprise. They wondered why there were so many foreigners among the top scorers.

“In fact, leaving home is no longer about the pain of ‘homesick’ but the freedom without fear!” At the same time, we also exclaimed in surprise. We wondered why so many top students have gone to Singapore.

Singaporeans were wondering why the top O-Level student was not a Singaporean and why Singaporean students were lack of spirit compared to foreign students.

Meanwhile, we were wondering why we always lose talents.

Lai said: “I like the freedom given by the peaceful Singapore, it allows me to move around without worry.”

In fact, leaving home is no longer about the pain of “homesick” but the freedom without fear!

Of course, a little girl’s way of thinking is relatively simple. For her parents (both graduates of the University of Malaya), studying in Singapore allows her to enjoy other freedoms. For example, the freedom of choosing a university, the freedom of choosing a major and the freedom of getting a scholarship based on academic results without the so-called quota system and colour distinction.

How many Malaysian students, like Lai and her younger brother, have been flocking to further their studies in Singapore right after they have completed their primary schools with the scholarship provided by Singapore every year?

And how many Malaysian students from Chinese independent high schools (second-class students and copycats for Singapore Minister Mentor Lee Kuan Yew and historian and academician Prof Emeritus Tan Sri Khoo Kay Kim) have been enrolled into prestigious universities of the Lion City every year and end up settling down while contributing to the prosperity of the country?

There are many shining stars who are originated from Malaysia in Singapore. For example, founder, Group Chief Executive Officer, and President of the Singapore-based Hyflux Group Olivia Lum used to be an orphan from Perak; and Chief Executive Officer of Jetstar Asia Chong Phit Lian was just a little girl selling pineapples at her own doorstep in Kulai, Johor when she was six.

The current Health Minister of Singapore Khaw Boon Wan is also originated from Malaysia. He used to study in the Penang Chung Ling High School.

In fact, there are too many similar stories to tell. — mysinchew.com

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My Comments (DQ):

As I have stated on countless occasions, we Malaysians must seriously consider what standards we wish to attain. 

Are we simply interested only in more of the same tired jingoistic national shibboleths of "Malaysia Boleh" or even "1Malaysia" and yet remain trapped within a melted down mindset of incorrigible ethnocentricity and self-interests, that we can no longer see beyond the horizon of challenges which are rapidly but surely sweeping us by. 

This competitive world can no longer tolerate profligacy, wastage and leakages. Certainly, it can no longer suffer fools and incompetency, despite many of our lawmakers bungling and inane antics and self-seeking performances...

We must strive for excellence and respect that only then can we at least have a greater chance of improving our crumbling state and institutions. 

Wake up Malaysians and fight the real war of national strength and power, and not simply indulge in mindless politicking and turf-protecting battles which only serve to weaken our foundations even more!

Nanyang Siang Pau: Topple Singapore?— Chen Jun An

Topple Singapore?— Chen Jun An
The Malaysian Insider
Saturday October 31 2009

OCT 31 — During an investment promotion trip to Singapore, Penang Chief Minister Lim Guan Eng was surprised to learn that 40 per cent of specialist doctors in Singapore's government hospitals were from Malaysia. He was amazed that Singapore valued talent that much and even suggested to the Malaysian government that if it wished to topple Singapore, it only needed to convince and attract Malaysian talent in Singapore to return home.

Tan Chia Yong, a columnist, had opined that if the government wished to attract talent to return home, it must not take short-cuts. Instead, it must assure them that they could expect a bright future if they were to remain in the country. However, he eventually lamented: “Singapore and Malaysia are separated by only a strip of water, while the Causeway is just 1.8 kilometres long. The geographical distance between the two countries is very short, but the psychological distance between these people and their motherland may be very great.”

For the moment, let's not talk about whether there is a great psychological distance between Malaysia's talent and their motherland. Lim's provocative suggestion to “topple Singapore” has left a bad taste in the mouth.

Lim had assumed the post of chief minister after the opposition became the ruling party following the March 8 political tsunami. It was thought that Lim's political thinking would be different, visionary and fluid.

Who would have thought that he remained trapped in the “Malaysia-Singapore Cold War mindset”? Remember former Prime Minister Tun Dr Mahathir Mohamad's remarks about skinning a cat? He had said: “There are many ways to skin a cat. There are also many ways of skinning Singapore.”

But any talk of “toppling Singapore” is a manifestation of an arrogant and antagonistic “Cold War mindset”! Would Singapore simply collapse if Malaysia were really to formulate various preferential policies to entice Malaysian talent to return home to serve their own country?

Don't forget that apart from Malaysia, Singapore has also recruited talent from China, India, Europe and other parts of Asia. Moreover, Singapore is about to build its fourth university, which goes to show that this tiny island state has spared no effort to cultivate talent.

During his investment promotion trip in Singapore, Lim only met people from the business and political circles, such as doctors, engineers and lawyers. He probably did not get to meet the Malaysian workers who have to ride across the Causeway early every morning to make a living in Singapore.

If Singapore were to collapse, what will happen to these people? Regardless of whether his aim was to provoke or ridicule, Lim should not cling to the “old mindset” or follow Dr Mahathir in wanting to “skin a cat” or “topple Singapore”.

On the contrary, he should firmly suggest that the two countries actively establish more mutually beneficial “economic zones”. This will help to rejuvenate their economies and attract more foreign investments so that talent from both countries can give full play to their expertise, while unskilled workers can also make a living.

It is true that there are many ways to skin a cat. But wouldn't such rampant “skinnings” result in streets strewn with cat carcasses? It should again be emphasised that the old “Cold War mindset” must not be tolerated! — Straits Times

This article was translated from a Chinese commentary published in the Frankly Speaking column in Nanyang Siang Pau on Oct 29.