Singapore's next frontier
The Washington Post, May 9, 2012
Singaporeans couldn't believe their ears.
"I'm sorry," said Prime Minister Lee Hsien Loong just days before the election a year ago this week that dealt the ruling People's Action Party (PAP) its worst setback in the five decades since the island city-state became independent.
"If we didn't get it right, I'm sorry," Lee said. "But we will try better the next time."
The unprecedented public apology may well have saved the PAP from a debacle. But the "new normal" ushered in by that vote (as well as a later vote for the more symbolic presidency, in which the PAP's choice won by just a few thousand votes) has upended politics in Singapore. While the PAP lost just six of 87 seats in its unicameral parliament, the party won only 60 percent of the vote, and some key ministers were sent packing. One year on, it's clear that public discontent has opened a new chapter in Singapore's development that deserves the world's attention.
Why am I devoting two columns to Singapore in The Post? As I noted last week, I've been fascinated by Singapore's remarkable achievements in rising from Third World to First via a series of savvy policies implemented by unusually talented government officials in recent decades. The era now unfolding in Singapore is a test of whether a tradition of sound governance under one-party rule can adapt to the stresses of globalization even as a now-educated and more vocal middle class forces a transition toward fuller democracy.
If Singapore can renew its economy, open up political life and better meet its citizens' needs and aspirations in the decade ahead, there will be important lessons for the world. If it falters under these challenges, different conclusions will be drawn. A lot is riding on the outcome, and not just for Singaporeans. China, many of whose leaders view Singapore's achievements under "soft authoritarianism" as a model, will be watching closely. So should the United States.
Public frustration in Singapore today has a number of causes. For starters, for all its growth, Singapore has become one of the world's most unequal societies. While its per capita income is among the world's highest, per capita consumption and wages as a share of gross domestic product—both better reflections of the ordinary citizen's lot—rank much lower. A massive influx of low-wage foreign workers in recent years—which has helped swell the population from 4 million to 5 million in just a decade (imagine adding 75 million people to America's 300 million and you get a feel for the disruption)—has put downward pressure on middle- and lower-income Singaporeans' wages. It's also created a sense in some quarters that Singapore may be heaven for the multinational elites who set up shop here but hellish for too many of the natives who serve the food or sweep the streets.
Even Singapore's ambassador-at-large, Tommy Koh, a soft-spoken senior statesman with whom I spent an hour recently, calls Singapore's widening gap between the rich and the poor "socially unconscionable."
Compounding the problem is growing frustration that the government, long fabled for its competence, can't seem to make the trains run on time anymore. Literally. The shiny subway system has seen an unusual number of breakdowns and delays in the last year, likely driven by the surge in population and usage—but also, critics claim, because the system was privatized and milked for profit at the expense of maintenance. A series of floods in shopping and residential areas have likewise exposed inadequate planning.
Then there's the soaring cost of living. Housing prices have increased beyond the reach of many young couples. The price of so-called "certificates of entitlement," used to ration the numbers of cars on the road and thus keep traffic manageable, has risen at times to the point where, all-in, a compact Chevrolet can cost more than $60,000. Monies set aside by individuals in Singapore's forced savings plan are often proving inadequate for retirement needs as lifespans lengthen and the cost of catastrophic medical episodes soar.
These economic stresses produced a backlash against the world's most generous pay for public officials—a practice I generally admire because in the United States we can't attract top folks to agencies like the Securities and Exchange Commission without worrying that they'll go easy on those they regulate in hopes of landing a plum job on Wall Street afterward. In Singapore these days, sentiment has soured: With foreigners taking our jobs, the subways jammed, the streets flooded and costs on the rise, who do these guys think they are—paying themselves a million dollars or more a year! Or so the thinking goes.
As with other authoritarian regimes, the advent of social media and political Web sites has given these grievances an outlet that government is ultimately powerless to suppress. The result, I'm told, is that even the single national newspaper, the Straits Times (which is heavily influenced by the government), was fairer to the opposition in the last election lest it lose credibility in the eyes of the public.
What's more, frustration has reached the point where the opposition Workers' Party has been able to recruit some impressive talent. In the past, those ambitious for public service naturally joined the PAP—in a one-party state, there was no other path to power and impact. This pattern also let the PAP dismiss its political foes as not being up to the job of governing. That's why heads turned when Chen Show Mao, a 50-year-old Davis Polk lawyer and former Rhodes Scholar with degrees from Harvard, Stanford and Oxford, came home after a legal career in New York, Hong Kong and Beijing and joined the opposition.
"Certainly, my friends in the PAP are in a better position to formulate policy and implement policy in the short term, and therefore, have a greater impact on people's life, people's livelihood over the short term," Chen told one interviewer. "But I think what I am doing is just as important. Perhaps more important over the long term, and that is to help build up a credible opposition that in time is capable to form an alternative government."
So where is the "new normal" headed one year after the wake-up call? The PAP appears to be responding aggressively. It talks of a "Singaporeans First" policy in employment and is cutting back on foreign workers. A commission to review government pay was promptly set up, and top officials will have their pay slashed by about 35 percent. (Singapore's prime minister will still earn about $1.75 million and ministers $800,000). In addition, half their bonuses will be linked not just to GDP growth but to growth in median income and the incomes of the lowest quintile of earners. (Only in Singapore do the technocrats respond with such tailored, business-like incentives, which a wonk like me can't help but admire). The government is pushing a productivity improvement agenda and goading business to share the fruits of these gains with workers, the only way to sustainably raise pay. A new subway line will be built or extended every year for the next seven years.
There's more, but you get the idea. If Prime Minister Lee went into the last election with an apology, his actions afterward have been a long way of saying "we heard you." The question is whether it will seem like enough. "If you have one of the best-educated middle classes in the world," says Kishore Mahbubani, a former diplomat who's now dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore, "the terms of engagement are going to change."
It's not the place of a foreign columnist to offer suggestions for Singapore, especially based on limited and imperfect understanding. But as an admirer from afar of all that Singapore has achieved to date, I'd humbly offer two thoughts to consider as this new era proceeds.
First: Encourage media outlets or independent institutes to do regular polling of the public mood. There's no analogue today to the Washington Post/ABC News poll (or its myriad American counterparts) in Singapore. I'm told surveys may be done privately by the PAP, but public, independent, high-quality surveys might bring a constructive transparency to the conversation now underway. Do citizens think Singapore is on the right track or the wrong track? Do they trust government to do the right thing (and how is this sentiment trending)? How do citizens rank the issues they want government to address? Do they think the opposition would be capable of governing? Singapore's leadership wouldn't want to become a slave to polls, like too many Western politicians—but neither should leaders be surprised by or out of touch with public sentiment. For a government devoted to measurable results, there are useful metrics and insights here worth developing.
Second, build on Singapore's legacy of policy creativity to redistribute income and promote upward mobility in ways that still honor the country's skepticism toward Western-style welfare states. Every advanced economy is finding that globalization and rapid technological change are widening the gap between the rich and the rest. It's difficult to maintain political legitimacy, and sustain support for the continuous economic change that fuels growth, without assuring that the benefits of growth are more widely shared. Singapore's founding generation of leaders rebelled against the Western welfare state model because they deemed it a path to national bankruptcy as well as a disincentive to work. Doubtless they had a point. But times change, and Singapore might do well to update its thinking here. Its sound fiscal management puts it in an enviable position to make prudent adjustments to its social compact. And the nation's well-deserved reputation for policy innovation means Singapore might come up with smart new ways to reconcile the tension between individual responsibility and social provision from which everyone from China to the United States might learn. Yale professors Bruce Ackerman and Anne Alstott's 1999 book "The Stakeholder Society," which proposes a universal $80,000 endowment at age 18 funded by a modest wealth tax—and in lieu of many other welfare provisions—might be an interesting source of inspiration.
I'm rooting for Singapore. Every nation is work in progress. This mighty island country has already taught the world a lot. It has much to teach—and to learn—still.