Transcript: An Investigative Interview: Singapore 50 Years After Independence – 45th St. Gallen Symposium

You never know.

Anyway, I advise those of you who are interested to watch through the night because this is not an election that’s going to be settled quickly. It’s going to be fascinating and I’m planning on staying up all night, so I’ll be really talking a lot of gibberish tomorrow.

Anyway, that’s by the by because we’re not talking about medium-sized nations that think they’re great like Britain. We’re actually for the next 45 minutes talking about a small nation which knows it’s small. But as proved, that small can be very, very effective and indeed beautiful.

I’m talking about Singapore, which within, really within one generation turned itself from, as the cliché goes, a third world nation state into very much a first world power in one generation. Singapore’s economic achievement is truly deserving of the phrase “economic miracle.” You know, if one thinks back to its beginnings as an independent nation in the early 1960s and thinks to where it is today and how it got there, it is the most extraordinary story. One that I think we can learn a lot from and to do some of the learning today.

Please give a very warm welcome to the Deputy Prime Minister and the Finance Minister of Singapore, Tharman Shanmugaratnam. Please give him a very warm welcome.

THARMAN SHANMUGARATNAM: Thank you.

Singapore’s Success: Converting Disadvantage into Advantage

STEPHEN SACKUR: Tharman, it is a pleasure to have you here and to be able to have a conversation with you. The St. Gallen theme, as you know, is all about size and scale and about this notion that sometimes all of us, in different forms, political, economic management, can learn a lot from small. And obviously, Singapore is a small nation that has achieved extraordinary things. So if one looks as an overview over the last 50 years, if you could define one thing that has been of paramount importance behind Singapore’s rise, what would it be?

THARMAN SHANMUGARATNAM: An attitude of mind. We took advantage of disadvantage. We converted permanent disadvantage into continuing advantage. And that’s a very fundamental attitude of mind.

What disadvantage did we have? We were not a nation that was meant to be. It’s a diverse group of people coming out of colonial migration patterns, very different origins, very different belief systems and religions. We were small, no domestic market. Decolonization happened suddenly and the British withdrew their military forces quickly and it impacted a very large part of the economy.

We were surrounded by much larger neighbors to our south, about 50 times the size of Singapore, and at the very outset objected to the very formation of Singapore and Malaysia. We had every disadvantage you could think of for our nation, and we did not expect to survive. We were not expected to survive.

But that to Lee Kuan Yew and the pioneer team of leaders was converted to advantage because it forces you to realize that all you have is yourself. The world owes you nothing. You’re a piece of granite rock. Fortunately, it’s granite, by the way. Not even a waterfall or mountains that allow you to have a little bit of hydroelectric power. Nothing. Just a group of people of different origins who are willing to work hard and had to fend for themselves and make themselves relevant to the world.

And that mindset—thinking of yourself as not having the advantage of size or history and that you’ve got to create it for yourself—turns out to be a phenomenal advantage.

Comparing Singapore’s Path with Other Post-Colonial Nations

STEPHEN SACKUR: So as an achievement of collective will, I mean, I think back to the timing, you know, the early 60s, there were a lot of Asian nations that were emerging at that time from colonialism, you know, one can think of—

THARMAN SHANMUGARATNAM: And African and Caribbean, of course.

STEPHEN SACKUR: But if we just think about Asia and your experience within Asia, you know, you had nations which I think economists were predicting would be truly powerhouse nations back then. You know, Indonesia, the Philippines, Burma, Myanmar, all of these were tipped for the top. And yet of course we saw all of them in their different ways, really struggle in the post-independence period. So was it just that Singapore had a—maybe it was size that allowed you to find a collective will that those other larger nations could not forge?

THARMAN SHANMUGARATNAM: Well, I think it’s a very difficult question, but let me put it this way. People think of Singapore as an economic success. That’s what sort of catches attention very easily, per capita GDP and so on. But what was really interesting and unique about Singapore was social strategy and most especially the fact that we took advantage of diversity, different races, different religions, and melded a nation where people were proud of being who they were, but were Singaporean first and foremost.

The Role of Lee Kuan Yew and Top-Down Social Engineering

STEPHEN SACKUR: Was it melded from top down? And we can’t get away from the figure of Lee Kuan Yew himself. It wasn’t there at the beginning. He imposed it.

THARMAN SHANMUGARATNAM: The natural workings of society would not have led to that happening, right? Not just in Singapore, but anywhere in the world. The natural workings of society would have just as easily and more likely have led to mistrust, discomfort, bigotry and what we see in abundance in many countries in the world today.

The most intrusive social policy in Singapore has turned out to be the most important and it has a level of intrusiveness that doesn’t come comfortably to the liberal mind.

STEPHEN SACKUR: What is it?

THARMAN SHANMUGARATNAM: Housing estates. 85% of Singapore lives in public housing. It’s not public housing that you are familiar with in the UK. It’s not like your council housing, because when it’s 85%, it covers the lower income group, the middle income group, the upper middle income group. These are middle class housing estates.

But every single block of flats, block of apartments and every single precinct requires an ethnic balance that’s intrusive because you’re constraining—

STEPHEN SACKUR: It requires an ethnic balance in the sense the government—how many of each ethnic grouping are given?

THARMAN SHANMUGARATNAM: So once a particular ethnic group gets beyond a certain quota in that block or that precinct, the resale market has to adjust. You can’t just get more and more of the same people concentrating themselves in the same neighborhood. And I think this is, you know, when it was first done, I don’t think we knew how important it was going to be.

STEPHEN SACKUR: I mean, it sounds extraordinary.

THARMAN SHANMUGARATNAM: It was authoritarian. So it was. And it was intrusive and it turns out to be our greatest strength because once people live together, they’re not just walking the corridors together every day, taking the same elevator up and down. The kids go to the same kindergarten, the kids go to the same primary school, because all over the world, young kids go to school very near to where they live and they grow up together.

The lessons coming out of Baltimore, the lessons coming out of France’s large cities, the lessons coming out of all our societies show that neighborhoods matter, place matters, where you live matters. It matters much more than economists thought. It matters tremendously in the daily influences that shape your life and the traps you fall into.

Democracy and Authoritarianism: The Singapore Model

STEPHEN SACKUR: But I dare say, and this is where we get into a conversation about Singapore that isn’t, as you say, just about extraordinary growth rates and economic success, but is about the way in which the body politic works. To some of us sensitive flowers in the west, the authoritarianism that underpins that approach to managing a society feels uncomfortable to us.

THARMAN SHANMUGARATNAM: Yeah, so that’s caricature. I mean, even the Economist, which is not exactly a cheerleader for Singapore, would say, as it just did in its editorial form of obituary when Mr. Lee Kuan Yew passed away, that Singapore has free, fair and regular elections. We are a parliamentary democracy. Not in exactly the same mold as Britain or the United States, certainly. No, we are a parliamentary democracy and an elected government makes decisions which it feels are in the best interest of the country today and for the future. And we are accountable for it.

STEPHEN SACKUR: Yeah, I mean, it’s a democracy of sorts. You don’t have a genuinely free, truly liberated press.

THARMAN SHANMUGARATNAM: Not in the British sense, no.

STEPHEN SACKUR: Well, not in any—I mean, but in the—much as I’d like to take credit for the notion of a free press, it’s not a British idea.

THARMAN SHANMUGARATNAM: I didn’t mean it entirely as a compliment, but as a description.

STEPHEN SACKUR: But as a description, you are missing page three of the Sun newspaper and that’s the great loss, I agree, but actually there is a serious point when journals that are respected and have a role to play, like, you know, the Far East Economic Review, for years and years are hounded by government.

Press Freedom and the Right of Reply

THARMAN SHANMUGARATNAM: The rules are very clear and simple. Singapore is an extremely open society by virtue of the number of foreign publications that are circulated, you know, well over 5,000. The fact that Singaporeans are probably more than any other society, broadband penetrated, the fact that they’re English educated and have access to a whole world of information on the Internet. It’s an extremely open society. There’s no doubt about it.

We are unconventional in requiring in our laws that we have the right of reply when foreign publications publish something that we feel is false or misleading. We just have the right to reply. And when publications, as you know very well, refuse to publish a reply, we impose restrictions on them that affect their advertising revenues. Unconventional, you might not agree with it, but the larger point is this.

I think we all need some humility. We all need some humility on the ways that best advance a liberal order. To take Lord Griffith’s point this morning, a liberal order, economically, socially and politically, we all need some humility as to how we achieve that, not just for today, but for tomorrow. How do you sustain it? How do you best sustain it?

The most thoughtful observers in the west are of the view that you need some buffers, you need some margins of safety and you need some compromises on some liberties in order to achieve others. And the freest possible media is not the only liberty we aspire to. I do think it’s a good idea, by the way, it appeals to my ideals. But it’s not the only liberty you aspire to.

You do aspire to a liberty of being able to walk the streets freely, particularly if you’re a woman or a child at any time of the night. You aspire to the liberty of living in a city that’s not defined by its most disorderly elements. You aspire to the liberty of having an opportunity for an education and a job, regardless of your race or your social background. And you aspire to liberty of practicing your own religion without fear of bigotry or discrimination. Those are very important liberties in many societies and they’re lacking in many societies.

Immigration and Demographics

STEPHEN SACKUR: Well, I think we’re getting into a very interesting area and Singapore to me is the sort of body politic which we in the west struggle to define in a way, because maybe we have a slightly sort of simplistic binary approach to this. We either want, you know, we look at free societies like I suppose mine or Western European or the US models. We would say free societies and then we would look at a China, for example, and we’d say a not free society. You know, they have capitalism of a sort, but they certainly don’t have democracy. And we’d say not free and dysfunctional politically.

You sit in neither camp uncomfortably, as far as we’re concerned. We can’t really pigeonhole you. But here’s a thought for you. Maybe your system is coming to a crossroads or a turning point because the digital age is changing things somewhat. You know, the information flows and the top down approach that your society has taken perhaps don’t fit so easily into a digital age. And I just wonder, you know, when there are theories about the relationship between political economy and innovation and long term sustainable economic success through innovation, whether Singapore is going to have to change and whether the authoritarian model, if you don’t mind me using that word, is going to have to be reviewed and fundamentally adapted. What do you think?

THARMAN SHANMUGARATNAM: Lee Kuan Yew would never have expected that Singapore would remain what it is today forever. I don’t expect, and I don’t think any of my colleagues in government expect it’s going to remain this way forever. It has to evolve. We start with the cards we are dealt with. We start with history shaped choices. And the history I described briefly earlier on did shape choices. It shaped social choices, it shaped political choices. But we must never be trapped by our history. We have to keep evolving.

And it is a worthy ideal to aspire for a system where individuals are well educated, are good judges for themselves of the information they read on the Internet, on the media, are able to make their own minds up. I think that’s a very worthy idea to aspire towards. But how do we do it in a way that’s self sustaining? And to think that you simply, if all forces are let loose, whether it’s the media or anything else, that you’re able to achieve the liberties that matter most to people, safety, freedom of religious belief, the freedom to aspire in life and achieve what you want through hard work.

STEPHEN SACKUR: But it’s a very important liberty. Simplistically put. Is there going to be room for more individualism in Singapore in the future?

THARMAN SHANMUGARATNAM: So if you look at Singapore today compared to not even 50 years ago, 10 years ago, it’s a vastly different place. It’s a vastly different place. Singaporeans are educated, discerning, skeptical and critical people. They know what’s what, there’s no doubt about it. And Singapore continues to evolve. It’s a function, of course, of the fact that we’ve had some success in education. It’s a function of the fact that, as you say, it’s a digital world, it’s an open world, so there’s no doubt about it.

But let’s not think that we are all moving teleologically towards that destination that you now see in the United States or UK. We’ll all have to evolve and we all need some humility as to how we progress democracy.

STEPHEN SACKUR: But will Singapore always be the kind of society where the government says, ultimately you can’t live there because the quota for your particular ethnic grouping has already been reached, you’ve got to go and live there? Is it going to be that kind of society forever?

Ethnic Integration and Social Cohesion

THARMAN SHANMUGARATNAM: That’s imponderable. I think it’ll be naive to think that you can lift it and people will automatically gravitate towards diverse neighborhoods. And you won’t, in fact get the reverse. Because if you look at the most advanced democracies, that’s exactly what’s happened. You have, you have in the United States, you have in France, you have in Germany, you have even in the United Kingdom. In the United Kingdom, half the Muslim population lives in your bottom 10% of neighborhoods. Did it happen because of some random chance? Or does it happen because that’s the natural workings of society?

We have to address these facts honestly and realize that, look, human beings aren’t perfect. Everyone has biases, discomforts, a sense of liking or distrust for each other. And there is a role of government, elected representatives to unify people. And it doesn’t happen through speeches. It means you need mechanisms, you need instruments. They mustn’t be too constraining on individual choice. But you do need to constrain something and you end up a better society. Or don’t you? That’s the test, not whether the government is right. Do you end up a society that people feel more comfortable in? That’s the real test. It’s easy to talk about Singapore, but quite frankly, this is a challenge we all face.

STEPHEN SACKUR: Oh, absolutely. I mean, listen, I know full well that the sorts of issues that come out of making an ethnically diverse nation work are extremely important to a whole bunch of nations far beyond Singapore, not least my own. But it seems to me you are now facing some of the problems that other nations have faced for quite a long time.

Let’s talk a couple of specifics. One, immigration. Big issue in Singapore today. In fact, one could argue it’s one of those issues which is prompting a new kind of very active, passionate debate where opposition is actually coming out onto the streets using the Internet in ways that we haven’t seen before. Because your government looks at the demographics of Singapore, looks at the need to keep growth going, and thinks our own people aren’t having many babies. We are going to have to manage continued immigration into the country to the tune of, I think by 2030, the plan was to turn a population of what, 5.3 million into 6.9 million.

THARMAN SHANMUGARATNAM: Not a plan. But it wasn’t a plan.

STEPHEN SACKUR: It was mooted anyway. And it drew an awful lot of opposition from native Singaporeans. So what are you going to do? You know, you’ve got this problem, you need the numbers. But Immigration, like in so many nations around the world, is now a whole hot and difficult political issue. What are you going to do?

THARMAN SHANMUGARATNAM: So it’s a challenge that many countries face and small countries face it more than others. Switzerland faces it in a very pointed way. Another small country that not only needs people for the sake of numbers, but its companies need talent and specialized skills to compete internationally. But we are a society. We are not just St. Gallen or Stuttgart or San Diego. We are a country, we are a nation. And that means it has to be a nation that people feel is their own. It’s got to have social mores and a tone that people feel as Singaporean, but with an openness that allows us to take advantage of the skills and expertise and track records and networks of foreign individuals.

So staying open, but remaining Singaporean at the core is what we have to achieve. And it’s a matter of balance. It’s a matter of balance.

STEPHEN SACKUR: Are you going to bring in this new, what, 30% of your population by 2030 or not?

THARMAN SHANMUGARATNAM: So we already at one third of our workforce that is foreign and we hope to keep it there as long as we can without letting it rise indefinitely. And that’s something we implement through labour market rules. We’ve got levies, we’ve got quotas and so on. But you can’t have a free for all. You can if you are one city in a larger country. But we are a country by ourselves. And you need a balance. And integrating foreigners in our society is just as important as thinking about the numbers, just as important as thinking about the quantity. You’ve got to integrate people as well as you can. And Singaporeans have to feel that, yes, this is my country, but I’m proud to be working in a world class team.

Government Spending and Social Policy

STEPHEN SACKUR: Now, another challenge you face is on the size of government. You know, you’ve talked already with me about the investments made in housing, for example, and that’s going to increase. I know it’s a huge part of the public budget. Education, you know, we all, I mean, British politicians are in the election, they say we’re failing in education. Look at Singapore and they cite your amazing exam record and your numbers of skilled graduates and the way in which you skill up your people so you invest huge amounts in education.

If you look at the figures, you know your government is actually an advocate of massive state spending. I mean, that’s the way you run your country. And because you’ve got such a successful economy, you’ve managed to do it without, you know, with budget surpluses until last year where you just fell into a deficit. And I don’t know whether you are worried that looking forward, particularly if you mix demographics with the size of your government and the ambition of your government, you are going to run into real problems.

THARMAN SHANMUGARATNAM: So I think we are a very interesting case of a country that has low government spending, by the way, by most standards, as a percentage of GDP, low taxes.

STEPHEN SACKUR: As long as your GDP keeps climbing.

THARMAN SHANMUGARATNAM: Yes, but our starting point is not a bad one. We’ve got relatively low government spending and revenues, but we are able to achieve the social outcomes that countries with much larger spending do. And how do we do it? I think one of the very important lessons of the last 50 years is that traditional concepts of welfare and social expenditure and government intervention have led to a weakening of private initiative and personal responsibility. Not because that was the intent. It never was the intent. It was never the social democratic intent to weaken private initiative and family responsibility.

I mean, look at the Scandinavian countries. They’re one of the, they used to be amongst the most hard working countries in the world. The Swedes were incredibly hard working, industrious people.

STEPHEN SACKUR: You’re using past tense.

THARMAN SHANMUGARATNAM: Are you Swedes?

STEPHEN SACKUR: I’m lazy or what?

THARMAN SHANMUGARATNAM: Present active tense. And I don’t, you know, they’re a good society in many ways, so I didn’t mean to—

STEPHEN SACKUR: Well, Swedes get the chance to point on this.

THARMAN SHANMUGARATNAM: They’re a good society in many ways and they’re willing to pay high taxes to keep their system going. But the point is there are ways in which an active government can intervene to support social mobility, to develop opportunities and to take care of the old, which doesn’t undermine personal and family responsibility. And that’s the compact that we are trying to achieve. It’s almost a paradox.

STEPHEN SACKUR: You mean you’re a bit more ruthless, is that what you’re saying?

THARMAN SHANMUGARATNAM: No, we are achieving a paradox of active government support for personal responsibility rather than active government support to take over personal responsibility or community responsibility. Do you believe in education?

STEPHEN SACKUR: Do you believe a safety net?

THARMAN SHANMUGARATNAM: So we believe in a concept of support for you taking up opportunities so we don’t have—

STEPHEN SACKUR: I believe in the sometimes simplicity of yes or no answers. What about this idea of a safety net, do you believe. Does Singapore believe in the notion of a safety net for those who fall between the cracks of a successful economy?

THARMAN SHANMUGARATNAM: I believe in the notion of a trampoline.

STEPHEN SACKUR: Yeah. So people are just bouncing up and down in Singapore?

The Trampoline Philosophy

THARMAN SHANMUGARATNAM: No, I mean it boils down to what policies you’re talking about. If you provide help for someone who’s willing to study in education, to study hard. If you provide help for someone who’s willing to take up a job and work at it and make life not so easy. If you stay out of work, if you provide help for someone who wants to own a home. And we are very generous in our grants for home ownership, which is why we have 90% home ownership and amongst the low income population, more than 80% own their homes.

It transforms culture. It’s not just about transactions, it’s not about the size of grant, it’s about keeping alive a culture where I feel proud that I own my home and I earn my own success through my job. I feel proud that I’m raising my family.

STEPHEN SACKUR: It is a culture.

THARMAN SHANMUGARATNAM: Keeping that culture going is what keeps a society vibrant.

STEPHEN SACKUR: Yeah, actually, sorry to stop you for a second, but I completely forgot to publicize this very important vote we’re having which you guys have all taken up without me even prompting you. So just by way of getting those who haven’t voted to vote, you know, we have got this question which we’re going to review at the end, but we can see where it’s going already. “After 50 years of growth and prosperity, Singapore will face the same structural challenges—”

THARMAN SHANMUGARATNAM: As the rest of the developed world.

STEPHEN SACKUR: 71% of you disagree. Presumably you believe, as the Americans would say, in Singaporean exceptionalism, which is an interesting idea. Do you believe in Singapore?

Singapore’s Approach to Innovation and Learning

THARMAN SHANMUGARATNAM: No, I don’t. I don’t at all. Very little of what Singapore does is invented in Singapore. Very little. A whole, to use the jargon, standard operating procedure, whether it’s in cabinet or statutory board or small public agency, is look at the rest of the world, try to get some idea, some technique, some method that has worked well and see how we can do it in Singapore, if possible, better try to avoid the mistakes that have happened.

So that’s an advantage of smallness, by the way. We never thought that we had it all in our minds. We never think today that we’ve got it all worked out and this is a successful model and that’s it. We are never in a golden mean.

STEPHEN SACKUR: But actually getting back to smallness, what you described, and it’s fascinating, the interventionism of the Singaporean government in the housing system, for example, or indeed in the education system. It’s been so successful, but it is so micromanaged. I mean, that couldn’t happen in a large country, could it?

THARMAN SHANMUGARATNAM: Well, I think the thought experiment that’s more useful is what has happened in a large country? And how could you have avoided it? How could you have avoided what’s happening? How could you have avoided what I described about your minority populations in Britain? How could you have avoided Baltimore? How could you have avoided Ferguson?

It’s not rocket science. There are many thoughtful observers who point to what was happening decade after decade. And it’s not about left or right, by the way. It’s not about Democrat against Republican or labor against conservative.

Centralization vs. Local Governance

STEPHEN SACKUR: It’s partly about centralization and authority in the United States, whether we’re talking about policing or whether we’re talking about education or housing. In the end, Americans want their decisions to be taken at a much more local level. By and large, you know, there’s a fear of big government and Washington, intruding in people’s lives. And many decisions are taken not just at the state level, but at the municipal level, including things like policing.

THARMAN SHANMUGARATNAM: Right.

STEPHEN SACKUR: So I think in Singapore, you guys are quite straightforward. You’ve got an extraordinarily centralized nation, state, city, nation, state, and it is all run from one place, the center.

THARMAN SHANMUGARATNAM: Yeah, it is a city, of course. And if you want to compare it, you can compare it to other American cities. Maryland, by the way, is larger than Singapore. And you have to ask, what is the responsibility of elected representatives?

If we believe in social inclusion, if we believe in opportunities for all, we have to accept it doesn’t happen automatically because of the invisible hand of the market or the invisible hand of society. It happens because you’ve got policies that seek to foster and encourage it.

And what happened in the examples I’ve just cited is that you’ve got policies that went in the other direction, and they trap people. They trap people where they started. If you’re black, if you’re low income, you end up where you started. I may be oversimplifying, but that’s the tragic truth, and that comes out of 50 years of evidence.

STEPHEN SACKUR: You are the world’s perhaps greatest example of a meritocracy.

THARMAN SHANMUGARATNAM: No, I’d never put it that way, no.

STEPHEN SACKUR: All right, well, I’ll put it that way for you, then.

THARMAN SHANMUGARATNAM: I would simply say we’ve taken lessons from abroad. We’ve tried to do what makes sense in our circumstance. And we’ve got to keep evolving our methods. We’ve got to keep evolving our methods.

Singapore’s Competitive Position in Asia

STEPHEN SACKUR: I’ve got to shut up and let the audience ask proper questions in a moment. But one more for me, you’ve got a problem. You made, I mean, Singapore made its great strides in the 60s, 70s, 80s, when the rest of Asia was, as we touched on earlier, you know, many of its countries were under terrible misrule, misgovernment. Their economies were shot to pieces.

And you guys, because you were extraordinarily efficiently governed, could make great competitive strides. It’s a bit different now. I mean, Asia is full of tear away growth economies. You know, obviously there’s China, but there are many others too.

Suddenly the idea of Singapore being the great tear away success of Asia in relation to all the others isn’t so true. And maybe foreign investment, for example, might begin to think, you know what, Singapore has gone as far as it can go. There are other places we could put our money and see it bear fruit better than Singapore in the future. Are you worried about that?

THARMAN SHANMUGARATNAM: Well, Singapore wouldn’t be where it is today if it didn’t have to compete very hard against formidable competitors. They weren’t always in Asia, they weren’t always in the immediate neighborhood. But it’s always been about competition.

And that’s how we’ve moved up from one level from highly labor intensive, low skill, low wage production to what is now basically high skill, high wage enterprise. And it’s a constant race. But don’t forget the intangibles. Don’t forget the intangibles. There’s some advantage in being constant in keeping to your promise, sticking to the contract and building confidence amongst every investor that in 20 years time and 30 years time, the rules are not going to change.

STEPHEN SACKUR: And being constant, does that mean that Lee Kuan Yew’s family will always be in charge?

THARMAN SHANMUGARATNAM: No, I think that will be most unusual. It’s a meritocracy. It will be most unusual if that was the case. Certainly it’s not the way in which I can’t speak on behalf of them, but it’s not the way most Singaporeans would expect it to be. And certainly you really wouldn’t want it to be a situation like, I mean, if you look at…

STEPHEN SACKUR: You’re about to say the United States, either the Bushes or the Clintons.

THARMAN SHANMUGARATNAM: So let me, I mean, to be frank, if you look at parliamentarians below the age of 30 in India, every single one of them is a member of a political dynasty. Every single one of them. So we believe in meritocracy. It’s hard work, it’s sometimes imperfect. There’s always advantage in family connections and wealth. But we’ve got to keep working against that.

Q&A Session

STEPHEN SACKUR: All right, well, thank you so much. I’m now going to get some sensible questions from the floor. I’ll take two at a time. You sir, if we can get… Well, where are the microphones? Have we got microphones? So you sir, and then you sir, and then we’ll go over this side. Give us your name and your question, quick as you can because we haven’t got much time.

AUDIENCE QUESTION: Sure. I’m Omar from Mexico. Mr. Tharman mentioned that he wants to control migration under a certain percentage. Competitiveness in Singapore is quite good in terms of economy and a lot of companies are moving their headquarters to Singapore in part because of the advantages it represents to the companies. However, many of those companies are foreign and that means it will go over the percentage of migration. If that affects the competitiveness of Singapore, what would you address in order to…

STEPHEN SACKUR: All right, yeah, good question. Next one, we’ll take two at a time. So you go, sir.

AUDIENCE QUESTION: Otto Lampe, German Ambassador. I was very impressed by your explanation of the ethnic coherence and the source of political and social stability residing in the fact that you have balanced quarters. Now, what I think one should factor in from the point of view of my country is the issue of migration.

Not only the current situation of northern Africans crossing the Mediterranean and asking for asylum, but I remember, please correct me if I’m wrong, that in Singapore, if you were a Filipino housemaid and you got pregnant, you were sent back home. So there is a sort of inherent permanent limit to extension of ethnic diversity and thus may be part of the explanation why you have such peace and quiet in your quarters. Thank you.

Migration and Foreign Investment

STEPHEN SACKUR: Okay. Right, so two questions concerning migration. First one, given your determination to control immigration, could that run into a clash with your desire to see foreign companies headquarter in Singapore, to develop their operations in Singapore because one might run against the other?

THARMAN SHANMUGARATNAM: Well, fundamentally what we aim to achieve is to provide a strong incentive for companies to upgrade their operations to depend less on manpower, period. Because a large part of the foreign workforce in Singapore is unskilled to lower to mid skilled foreigners. It’s not about, you know, entrepreneurs or scientists or engineers. A large part of it is labor.

And we are behind Switzerland, we are behind the advanced segments of Germany, we are behind the advanced segments of the United States and Japan in almost every industry with regard to our potential to reduce manpower and to rely more on technology and machines. We still have some way to go to become really at the front line of productivity and technology. And that’s our ambition. That’s the first strategy. It’s about upgrading industry so as to raise productivity.

But the second strategy that’s very important is that when it comes to any form of talent, and we define it in different ways, it’s about track records, education. Of course, market salary is a very good indicator of talent. We’re an open society, but we encourage every company, Singaporean or foreign owned, to think hard about building a Singaporean core. Your enterprise, we encourage that very strongly.

You can’t leave it entirely to the market, but neither can you intrude too much in enterprise decisions because then you risk losing competitiveness. So far I think we’ve managed this journey. We’ll have to keep revisiting our methods and our rules every few years or so, but so far we are managing the journey.

STEPHEN SACKUR: And the ambassador’s point that you actually, to summarize, take very draconian steps or have in the past…

THARMAN SHANMUGARATNAM: So we…

STEPHEN SACKUR: Throwing out women who get pregnant.

THARMAN SHANMUGARATNAM: Foreign labor is here on a contract under conditions that they have to meet. We are strict on applying the rules, but the rules are known well in advance. The fundamental challenge Singapore faces is not, however, about foreigners. And we achieve harmony because we sort of kick foreigners out when they get pregnant. That’s a very, very small incidence of people. Extremely small.

The fundamental challenge is that we are ourselves a diverse society with quite different belief systems and we think we can achieve a harmonious society through hard work, constant consultation and dialogue and trust. That’s our fundamental challenge. We are ourselves a diverse society.

STEPHEN SACKUR: Right, I love Leaders of Tomorrow, so Leaders of Tomorrow, put your hands… Oh, there’s one there waving enthusiastically. And then you, sir, twisting your arm around invitingly over there. You can have a go too. We’re a bit short of time. So does everybody agree? We can afford five minutes extra before we take lunch because the questions are important. Do we all agree? Yeah, everybody’s nodding. Good. Go on, Sir.

Lessons for India and Large Democracies

AUDIENCE QUESTION: Hello, my name is Girish and I’m from India. Well, since we are talking a lot about diversity in Singapore, I was just thinking that India had largely a very similar time span. And if you look at the diversity, it had a very similar endowment in terms of diversity in belief systems, diversity in populations and in some ways similar colonial past.

So given the same, India, however, has chosen to take a different route and a different approach to things. And some might say that there is a lot that India could perhaps learn from Singapore. A major difference being in the size of, and therefore perhaps in the agility and the ability to enforce that Singapore has. So would you have some things that India could learn perhaps, or countries like India could learn from Singapore?

STEPHEN SACKUR: Good question. I mean, in a nutshell, you’re a very small nation. India is a bloody huge nation. But are there some universalities here that could apply across…

THARMAN SHANMUGARATNAM: Right, got to answer that.

STEPHEN SACKUR: Yeah, go on.

THARMAN SHANMUGARATNAM: Okay, well, maybe a fairer comparison is to look at India compared to other large complex societies and China is a good example. India has the great advantage of a democracy, which ultimately I think is the most sustainable political system that we know of. But it doesn’t have the advantage of accountability of elected representatives.

China, in a curious way, despite not having a democracy in the political sense, has a very high sense of accountability on the part of its leaders. That isn’t so for all authoritarian regimes, but it is so for China and they have created a culture of accountability. I think India can create a culture…

STEPHEN SACKUR: I’m slightly baffled.

THARMAN SHANMUGARATNAM: I think India can… You can come back to that if you want to.

STEPHEN SACKUR: We don’t have time.

THARMAN SHANMUGARATNAM: I think India can create that culture. There’s no reason why democracy should not have a culture of accountability with it. It just means that middle class voters especially have to hold people accountable for what they promised and to see if they deliver and it can be done.

Audience Questions and Closing Remarks

STEPHEN SACKUR: All right, well, we’re going to talk more about China and accountability over coffee, but we can’t. Yes, sir.

AUDIENCE QUESTION: Thank you. Mr. Premier, I’m David Simbam from Uganda. Does Singapore today consider itself a developed country in the Harry Truman sense of development, and if so, what are its current geopolitical interests vis-à-vis dealing with the rest of the global south, including Africa and Uganda?

THARMAN SHANMUGARATNAM: You know, the word “developed” doesn’t figure very much in our parlance and in our domestic debates or anything like that, because as far as we are concerned, we just have to keep improving. We haven’t arrived.

As I mentioned just now, I spoke about productivity and technology. I can talk about other things. I think the way in which European societies have developed respect for blue-collar workers and accorded them a place in the workplace, in governance, and in society that exceeds most Asian countries – it’s something that we still have to aspire towards.

There are many things that have been achieved in the advanced countries that we still aspire towards. So I don’t know what the definition of “developed” is. It’s typically a sum per capita income criteria, in which case Singapore…

STEPHEN SACKUR: And I think the question also wanted to know whether Singapore now sees a priority in developing relationships with, you know, the emerging and the poorer countries of the world, particularly Africa.

THARMAN SHANMUGARATNAM: We focus most of our foreign assistance and relations on developing countries in Latin America, in Africa, and especially in Asia.

And to go back to a question that was asked earlier, I think we have to be quite honest about the fact that there are going to be limits to which we can solve the immigration problem in Europe or anywhere else in the world of the same nature by simply addressing it when they finally come. We’ve got to help countries manage their problems where they are, and we have to take very seriously the predicament and complexity of Africa and do our utmost through multilateral institutions and bilaterally to help them uplift themselves, solve problems at their source, not when they finally come.

Democracy, Freedom, and Innovation in Singapore

STEPHEN SACKUR: I’m just literally two days ago back from Zimbabwe, I would agree with that entirely. Now we’ve got to win. I want two more questions, but I want both from women because I’ve failed to call upon women so far. Right, we’ve got two women neatly lined up right next to each other. So two short, pithy questions from two females to finish.

AUDIENCE QUESTION: Hello, my name is Giselle Hongjie Wang from China. I’ve never been to Singapore before. I hope one day I will, so I can just ask a naive question from a view of the outsider. I hope it’s not entirely irrelevant.

I think it’s an exalted idea to encourage people to work harder and to have a decent life. But you mentioned something like that you would actually make life harder for people who are not willing to work in Singapore. And this actually reminds me of something I saw earlier this year when I was in the US. I was actually touched by some of the freedom some of the people enjoy there. They could actually just have some unconventional and even chaotic years of their life. They could be anti-establishment. They could just be different.

But if your society works this way, won’t you deprive the freedom of people who just want to be wild and anti-establishment for a period of time?

STEPHEN SACKUR: That’s a totally great question, but let’s hear the other one as well.

THARMAN SHANMUGARATNAM: So I can answer them together.

STEPHEN SACKUR: No, I want to save the answer. I don’t want to waste it now. Ma’am, what’s your question?

AUDIENCE QUESTION: Hello, I’m Hasmi Grigori, I’m from Armenia. How did the development start in Singapore? Is it thanks to the political will, or did it start from the bottom civil or economic level?

STEPHEN SACKUR: And what is the level of democracy?

AUDIENCE QUESTION: Between the political rights and the economic rights?

STEPHEN SACKUR: Right. Okay, well, let’s do that. That one first. And then we’ll get to the one that we all enjoy. I mean, so they are…

THARMAN SHANMUGARATNAM: They’re not unrelated.

STEPHEN SACKUR: No, they’re not unrelated. They’re not unrelated. Give me your answer to the second lady first.

THARMAN SHANMUGARATNAM: Yeah. So in understanding the evolution of democracy in Singapore, you can’t avoid looking at history, how we started and the circumstances that we were given as a country that wasn’t meant to be. Democracy has evolved, it has strengthened, and I believe it has to strengthen further.

But let’s not think that the way to strengthen it further is to simply leave everything without restraint. It hasn’t worked in the most advanced democracies and is not going to work, especially in a diverse Asian society.

STEPHEN SACKUR: Eighty of your 87 parliamentary seats are taken up by the ruling party, Lee Kuan Yew’s party. I mean, that’s not healthy, is it?

THARMAN SHANMUGARATNAM: Really? It isn’t. If you look at Alberta, since 1971 you’ve had the same party in power and today it controls 70 out of what, 85 or something like that?

STEPHEN SACKUR: Yeah.

THARMAN SHANMUGARATNAM: So, you know, Canada is a thriving liberal democracy. Don’t hit too hard a government that works very hard to do what is in the interest of the people and has a good track record. Okay? Don’t hit it too hard. Okay.

STEPHEN SACKUR: And then second question is, in Singapore there isn’t room to enjoy a few years of, quote unquote, “wildness.” Right?

THARMAN SHANMUGARATNAM: So you can’t…

STEPHEN SACKUR: Unfortunately, where’s the creativity?

THARMAN SHANMUGARATNAM: Where’s the chance to kick back, think, and smoke something interesting?

STEPHEN SACKUR: So there are two…

THARMAN SHANMUGARATNAM: There are two parts to that question.

First, you’re free to be as wild and wanton and take time off and do what you’d like with your life, but you don’t have to get state assistance for doing so. That’s the point. The point is, how do you, with a limited budget whilst keeping tax revenues low, keeping spending low, how do you apply it most effectively? And I believe the best way to apply it is to reward personal responsibility.

I’ve got nothing against people taking time off. In fact, it’s not a bad way to live your life, to take some time off from time to time. You re-energize yourself, you think of new ideas, you might switch jobs. But the unfortunate fact of the last 50 years is that governments that gave money without conditions – in other words, as long as you’re unemployed, you get it and you get it for an extended period – did not anticipate how it would change social culture.

Unfortunately, social culture changes and it changes in response to incentives, and we don’t want that to happen in Singapore.

The most serious point, though, is that it is true that developing Singapore into a more innovative society, which is what its future has to be, does require a certain amount of free play of ideas at the level of the individual and groups of individuals. And we have to allow for that. And I don’t think “allow for that” means we just mimic what the Bay Area in the United States is. We are a different society, but we’ve got to evolve. We’ve got to give more free play to the individual and to individual choices. There may be right or wrong choices, but people will learn with time.

STEPHEN SACKUR: Well, if I may say so, that is a very interesting answer and I just think your entire presentation has been fantastic. So apologies from me because I’ve made you all late for lunch. It is now lunchtime. But ladies and gentlemen, before we go to lunch, just please give the warmest of warm hands to Tharman Shanmugaratnam. Thank you so much.

THARMAN SHANMUGARATNAM: Thank you.

STEPHEN SACKUR: Thank you.

THARMAN SHANMUGARATNAM: Thank you. Thank you very much.

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