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Sunday, October 12, 2014

10 great Singaporean government policies

I actually wrote this 3 years ago, in the wake of the elections of 2011. Funny thing is that I might not have to change this much. I was going to title this blog entry "10 great Singaporean government policies that our current batch of leaders have neither the balls or the imagination to implement." But that is very unfair to them. They have a lot of problems to solve, and at least some of them are of their own doing. In fact it is possible that in the next few years we might see another golden era of imaginative and bold policy making. And ever since the Asian Financial crisis, Singapore has withstood a lot of challenges, the chief of which is that a great deal of our economic advantage has been whittled away by the rise in the cost of living.

Still, given that the government is such a large part of our lives as Singaporeans, policy making is a great part of our history that we need to understand.

1. Independence

Interestingly enough, one of the most controversial aspects of Singapore is the manner of its formation as an independent entity. One of the big sticking points between Malaysia is that LKY and Singapore did not see eye to eye over the bumiputra policies. To crudely oversimplify things, LKY wanted a “Malaysian Malaysia”, without preferential policies for any particular race. The Malaysians wanted special rights for the Malays. It is my opinion that these policies turned out to be better ones for Malaysia and Singapore respectively. Singapore progressed and thrived as a meritocratic society. Malaysia was able to keep a lid on simmering racial tensions that would have built up if, expected, the Chinese were to dominate the economy of Malaysia the same way as they did in Singapore and Indonesia.

However, other issues remain. Without belonging to the same political entity as the hinterland, Singapore would always be extremely vulnerable. Everything depends on Singapore’s continued existence as a trading / financial / whatever hub. Should that be lost, we can say bye bye to the good life that Singapore enjoys today. The closest historical parallel that I can think of is Venice, another trading hub, which through the guile of its leaders and citizens, managed to survive intact for 1000 years before being destroyed by Napoleon. That gives us hope – somebody else has managed to survive 1000 years as an independent entity in circumstances strikingly similar to Singapore before eventually getting itself destroyed.

As it is, it is difficult to imagine Singapore thriving as well as it did if we didn’t become independent. LKY might have been removed as Chief minister. We could have been mismanaged by the Malaysians. There could have been a break later on which was nowhere as painless as the one that we had.

2. Export led development / alignment with the West

There were 2 possible routes that we could have taken. One was the import substitution model, which was something that Egypt or some other third world country did. They found that they were paying plenty of money for imports from other countries. So they decided to subsidise local industrial developments and heavily tax imports, in the hope that they would grow to become a substitute for expensive imports from the west. It didn’t work, and their economy languished.

The way that Singapore did it was to join the world economy, and concentrate the production on goods that Singapore would have a comparative advantage in. Probably there was some subsidy in the beginning, but Singapore was able to develop as a trading hub, and this proved to be a great boon for the Singaporean economy. Singapore was able to develop its manufacturing sector. In fact, this was a feature that was common to the other tigers, Taiwan, Hong Kong and South Korea. All 4 tigers followed this growth strategy, by manufacturing goods for the rest of the world, and they prospered.

Another fateful but controversial policy was that Singapore would welcome foreign direct investment from the developed world. This would develop Singapore’s economy rapidly, but it would also make it extremely vulnerable to shocks in the rest of the world's economies. In contrast with the rest of the tigers, there was a marked reliance on foreign direct investment. Basically, Singapore’s economy was split into 2. One part was made up of foreign companies which opened regional bases in Singapore. The other part was made up of government linked companies, which were owned, if not controlled by the government. There was comparatively little scope for local enterprise. Maybe this policy made sense when Singapore needed to come under the absolute control of a dictator in order to stabilize its economy, but we’ve gone way past the point of having to reverse this policy. It’s a little late to change course only now and hope that Singaporeans will belatedly learn how to become entrepreneurs again.

The other dimension of this policy is the geopolitical strategy of aligning Singapore with the West. The fear was that this was a form of neo-colonialism, and that Singapore would be beholden to the interests of the West. In a way, it was true: it was neo-colonialism. But historically Singapore was a benefactor of colonialism. If you discount the fact that Chinese, Malays and Indians were all second class citizens in colonial times, Singaporeans and the West have one big common aim, and that is to build Singapore up to be a great city, a great trading hub. This has not changed since the founding of Singapore – incidentally by a bunch of white boys. It was a happy alignment of interests – Indians and Chinese were here for a better life; Malays had special status and were protected, at least in Malaya; the Western powers wanted a power base in our part of the world.

This policy served us well. We got everybody to speak English, just like the Indians did. We had joint training exercises with the military powers of the Western world. We reaped the benefits of earlier economic development than our Malaysian or Indonesian neighbours. The prospect of friendship with Singapore was attractive because the Westerners are always nervous about Muslims. We were a 4 way bridge between the western, the Chinese, the Indian and the Malay worlds. And let’s face it – the West has one of the most eclectic cultures around. If we were going to learn about how to make people of different cultures live together, we’re either going to learn it from the west, or from Latin America – and Latin America is too far away.

This is not a straightforward decision. We could easily have allied ourselves with the 3rd world, or the non-aligned movement. We could have chosen to go with the communists, although Indonesia’s experiences in 1965 would have warned us about the wisdom of going down that path. We could have allied ourselves with China. We could have drawn closer to India, who was on friendly terms with the USSR. We could have been friendlier with our Muslim neighbours by not asking Israel to help set up our SAF.

Later on, however, our alliance with the West will prove problematic. We will be a fish out of water in every sense. We did not ally ourselves with communist China. (To be fair, neither did that British colony Hong Kong, that renegade province Taiwan or that Portuguese colony Macau, until relatively recently). We are an island of majority Chinese people, surrounded by muslims and Malays. Among the Chinese, we would betray all our foreign influences. For the Indians, we have only treated them as fellow human beings relatively recently. If the US picks a fight with China, or the other way around this problem will be so tricky that we won’t really know what to do. But fortunately that is another problem for another time.

3. Tough drug laws

One of the most controversial policies is the mandatory death sentence for the smuggling of drugs. As I understand it, once a person has been found guilty of smuggling a certain amount of drugs, he is sentenced to death, and there is no room for discretion of the judge as to what sentence is to be passed. This is meant to deter squeamish judges from avoiding passing the sentence, and presumably it is to prevent preferential treatment for the privileged and well connected.
There has been a campaign against the sentencing of some guy called Vui Kong. I’m not sure of the details, but I think there is a certain abhorrence for the death penalty in many quarters among Singaporeans.

Let’s get a few facts for background. First, Nixon’s war on drugs has been a miserable failure. Experience has shown us that having heavy penalties for smuggling drugs turns it into a profitable enterprise for many criminals, or would-be criminals. If you combine that with the lack of economic opportunities in a place like a ghetto in the United States, it is a deadly combination. People will start turning into crack dealers just in order to earn enough money to get by. When they started to tighten up sentencing in order to put more drug smugglers behind bars, the US created another big problem on their hands: an abundance of black people in jail.

In fact, there is an Atlantic Cities article which addresses a big problem that has puzzled policy makers in the US for a long time: why was there such a big drop in crime rates over the 1990s? Some people attributed it to an improvement in economic conditions, but this “Great Recession” has not (yet) produced the corresponding increase in crime. Some people attributed it to better policing, the “broken windows” principle of policing. The answer given by the authors of Freakonomics is a fairly eccentric one: legalized abortion as a result of Roe vs Wade, leading to a cut in that important source of criminals – young men raised by single mothers.

That article from the Atlantic Cities contends that the reduction in crime is a result of the drop in price of cocaine. Because of this, there have been fewer gangs, and gang related fights for territory. Many of the alternative explanations have their merit for me, but to me this is the best explanation for the drop in crime, because it goes into the heart of what organized crime is all about: they are profit seeking organisations, just like your modern corporations. They fight for turf, rather than committing wanton acts of violence and murder. They act as co-operatives rather than as lone vigilantes. Most activities of organized crime are non-violent: protection rackets, which act through the constant threat of violence, rather than the application of actual violence. The smuggling and distribution of contraband. The application of order and discipline within the ranks of the organization.

The first point to be made, therefore is that it is not really about the war on drugs. The real war is the economic war, the war to be waged on the profitability (and therefore sustainability) of smuggling and pushing operations. There are 2 ways to stem this. First, legalise drugs and take away the profitability of the enterprise. The second way is to wage not war on drugs, but nuclear war on drugs. Make drug trafficking the exclusive domain of the criminally insane. To me, these are the only 2 sane alternatives.

They each have very serious drawbacks, though. The first type of policy does not prevent a substantial number of people from getting addicted to debilitating drugs like heroin. It could even make your city a major distribution centre for smuggling operations, especially if you have 2 population centres side by side, where one has legalized drugs, and the other hasn’t. The second is just extremely brutal from a humanitarian perspective. But given the evidence, it’s still a hell lot better than what the US has had to go through.

The second aspect of the drug policy that I want to discuss is that having a lot of drugs in your community tends to change the character of that community. First, when people live together in the projects, they are very susceptible to picking up the habit. You certainly don’t want drug dealers infiltrating a housing project the way that they infiltrated housing projects in western cities. Second, you don’t want criminal gangs forming around the dealership of drugs. Third, you don’t want your citizens hooked on drugs and turning into petty thieves, or otherwise not leading productive lives.

In fact, a lot of the anti-drugs sentiment revolves around 2 aspects of drugs in Chinese life: first, there is the trauma of the Opium War. Second, opium is usually prevalent in the lives of overseas Chinese: you can usually find an opium den in Chinatowns around the world. I think the prevailing notion is that drugs were a cultural scourge on the Chinese. There was always a puritanical element behind Singapore’s anti-drug policies.

Third thing to note about the drug policy: Singapore is close to the golden triangle. We are one of the transportation hubs closest to the golden triangle, so it’s just as well that we couldn’t end up being a major transit point for drugs. I think that Singapore has a comparatively small drug problem compared to what could have been. But we really paid a big price for it.

If I’m satisfied that some class A drugs like heroin and cocaine are harmful enough to warrant such tough anti-drug laws, I’m not convinced that tough drug laws are necessary for less harmful drugs like marijuana. But then again, banning marijuana on baseless grounds is unnecessarily but harmless. I’m not 100% in support of the death penalty, but I’m satisfied that it has prevented a large drug epidemic from taking root in Singapore. Having said that, I watched an episode of "The Layover" where Anthony Bourdain, an advocate of Singapore's hawker food made a few brief comments about Singapore's drug policy. Bourdain, as readers of "Kitchen Confidential" will know, was a former heroin addict, and he didn't seem to have anything bad to say about Singapore's anti-drug policy.

4. Fine for littering

This is where Singapore got its infamous "fine" culture from. We had an unsavoury reputation for having draconian laws, especially for minor offenses. Fining somebody for littering is definitely something that offends the sensibilities of somebody of the libertarian mindset. We had a reputation for being a "Disneyland with the Death Penalty".

I'm not a person who likes being told what to do, but I am not a litterer, so to me, the fine for littering is not an issue at all. What this fine has undoubtedly achieved is that Singapore, at least during the 90s, was one of the cleanest countries in Asia - certainly Southeast Asia.

In the 1990s, there was a great transformation that took place in New York City. In a space of 10 years, it had changed from being a crime capital of the US, to being one of the safest big cities. And one of the policies that was credited with that success was the "Broken Windows" theory. This theory said that if the surroundings were orderly, and things were in good shape, people would tend to behave better, and engage less in minor offences, than if they were in a place that had a shoddy appearance.

The government cannot take credit for the fact that in Chinese culture, you are expected to behave yourself. But I think that they did inculcate a certain culture of civic-mindedness in Singaporeans, which is one of the greatest assets that Singapore has today. Also, when you consider that Chinatowns of many countries are dirty and grimy places, getting a bunch of people, a significant proportion of whom are Chinese, to walk to the trash can and throw away stuff - that takes some doing. Civic mindedness is not a forte of the Chinese. But the willingness to follow the law is. The great success of this policy is in the way that the former is tied to the latter.

The downside of this law, however, is that it also inculcates a mindset among Singaporeans, of focusing too much of minor details and trivialities. Being clean and green improves the quality of life, but it is not one of those things which makes your life great or meaningful.

5. Race based quota system for HDB

There have been many ways of managing relationships between the different types of peoples in Singapore. Raffles did that by dividing Singapore into districts, and the legacy of that is that certain parts of the city center are traditionally associated with the Chinese, the Malays, the Indians, the Arabs, the Peranakans. There's even a section that is predominantly Teochew.

One of the ideas enshrined in our concept of nationhood is the perennial problem of getting people of different races to live together, "regardless of race, language of religion". The government paradoxically decided to force people of all races to live together. Perhaps this was inspired by the desegregation that was going on in the US after the civil rights movement.

To be sure, the government did not control 100% of the housing in Singapore. But they did control a good portion of it (see next section), and one of the policies they implemented was that every block of flats had to have Malays, Chinese and Indians in some certain proportion.

The opponents of this policy pointed out that this was racist and helped to make sure that there were no sections of Singapore that came into the control of Malay and Indians. I don't deny that this is true, but let's look at the other side. One of the ways to ensure that people of all types get along with each other is to force them to be neighbours with each other and greet each other in the corridor every morning when they see each other. That way, you never got segregated villages where people self identified themselves along racial lines. Yes, there is something really stilted and artificial about the way that Singaporeans of different races get along with each other. But if you combined forcing people to live together with a stern and paternalistic racial harmony act, I think it did a lot of good for the integration of the different segments of Singapore society.

At the same time they also had the wisdom to not destroy the historical cultural enclaves, even though these enclaves were also fairly well integrated: Chinatown has at least 1 Indian temple and 1 mosque. It was as though there were 2 Singapore systems. When you were in the city centre, you went to your Chinatowns, your Little Indias or your Gelang Serais. When you went home to your HDB flat, you saw Chinese, Indians and Malays everywhere. The fact is that we need both types of places in our urban landscapes - the cultural homes of the different peoples, as a reference point for people to identify with people of their own kind, and the desegregated landscape that they can call their home.

Now, racial harmony in Singapore is not perfect. Some people say that what we have is merely tolerance. Yes, but maybe perhaps tolerance is the best you are ever going to get? Most importantly, businesses are still dominated by the Chinese, and there's some level of distrust about employing a Malay, although hopefully that will disappear one day. There's still a lot more to be done. The widening income gap is something that is also fairly racial in nature.

You just had to compare things with the way that politics are being carried out in Malaysia: different policies for different people, different parties for different races. Yes, the atmosphere had not become as poisonous as in certain parts of India, but I'd take the Singapore system over that anytime.

6. HDB

You only have to compare the HDB with public housing projects of other countries to understand that this is one of the biggest miracles in Singapore. We have places that are (were) cheap to live in, and crime free. I've seen housing projects in NYC, and they are grimy places to live in, compared to the HDB in Singapore. "Council housing" in the UK or "the projects" in the USA are a by-word for gang territory

There are infamous projects like the Pruitt-Igoe in St Louis which turned into a living hell within 10 years of its existence. We won't have one of those problems, which is that the government lacks the political will to properly fund the maintenance of the place. But the government has made sure that these places are clean, hygienic and peaceful places to live in, for the most part.

The HDB has affected Singaporeans in such far-reaching ways that there's not enough time and space to go into all these things here. One of the controversies of this is that of home ownership. It has made Singaporeans more responsible about their future, which is good, and it forces them to take ownership of their lives. But at the same time it makes it that much easier for the government to manipulate them: everybody fears losing their job. It has become extremely shitty to lose your source of income in Singapore. Everybody's forced to toe the line. And during the great property boom, a lot of people suffered because such a large percentage of their wealth was tied up in the home that they owned.

7. Campaigns campaigns campaigns

Well I suppose most of the points here are covered under "fine for littering". Yes, the government has a very heavy hand in this social engineering. But campaigns firstly show that the government cares about you, they try to push Singaporeans in the right direction, and most of them have been fairly benevolent anyway.

8. Hawker centres

One of the best policies that Singapore had was that we recognised that food is such a great part of being Singaporean. We didn't make street food illegal. We just built flats where people could eat food they liked, we gave them gas and running water, and conducted safety inspections to make sure that nobody got sick eating that food. The result? Even those people who hate Singapore agree that it's got great food. Anyway here's Anthony Bourdain to talk a little more about food in Singapore.

9. Anti-corruption

One of my friends was relating his interview with the public service commission with me. He was asked, what is the greatest achievement of the Singapore government. The answer that the interviewer was looking for was "the eradication of corruption".

To the extent that Singapore has had an honest government, it developed a good reputation as a great place for doing business. One reason why Singapore managed to attract more foreign investment than places like Indonesia and Malaysia which had so much more natural reserves than us, was our reputation for not being corrupt. Corruption is a form of poison that affects the ability of the government to do the right thing on many levels. And the fact that Singapore was able to get rid of this problem when so many other Asian countries still struggled with it - that was a great achievement.

However, Singapore's victory over corruption is looking something more and more like a cosmetic thing as time goes by. Corruption at the very superficial level can be tackled easily. Less easily tackled are other forms of venality, like appointing your friends to the board of directors, the government giving favourable legislation to GLCs. Maybe the government will close 1 eye to important social issues for the sake of attracting a certain foreign investor. Maybe legislation is not as tight as it could have been because you don't want to offend powerful bankers. Maybe a certain person could not serve in 2 different positions simultaneously due to conflict of interests, but they serve those 2 positions in immediate succession. Like maybe a banker going over to become a MAS director, or stuff like that. Or the asset enhancement policy - what was that all about? The trigger that made the Singapore property market shoot through the roof - who do you think it benefitted? Most likely a small but influential group was angling for it. There is no such thing as perfectly impartial legislation.

10. Government linked companies

This is another great controversy. Sovereign wealth funds are something that blurs the divide between the private and the public sectors. Government linked companies straddle that line. On one hand, it is clear to them that they have to pursue the profit motive, but on the other hand, they have to temper it with the social responsibility that it

I chose these 10 pieces of policy making because I appreciated their boldness, as well as how well these were executed. In many cases, they went against popular sentiment, or against the conventional wisdom. Many but not all of them were civic- minded, they were conceived with the welfare of the people at heart. In many cases, Singapore reaped the benefits of being bold. I only hope that Singapore continues being bold. And that the policy makers will continue to place equal emphasis on the welfare and rights of all Singaporeans. Sadly I am far from convinced that this is 100% going to be the case.

I might do another piece on legislation that has fucked Singapore up, but I'm not sure I have the energy or the inclination.