Singapore a poor model
for Myanmar
By William
Barnes
BANGKOK - When Myanmar's reforming President Thein
Sein visited Singapore in January, officials there offered lessons
on how to modernize and attract foreign investment. Singapore's
eagerness to court Myanmar's ruling generals has been a diplomatic
feature of the international community's two decades of trying to
crack open the reclusive country.
Now that Asia's "next economic frontier" has started
to open up, Singapore - where Myanmar's senior generals bank and
seek hospital treatment - is keen to
offer itself as a dazzling example of how to become a first-world
economy within a couple of generations.
It's a siren call that should be
resisted, said Rodney King, the Australian author of the
controversial book Singapore: Myth and
Reality.
"Singapore is not a good development model and not
one a developing country should follow. Singapore has basically
conned the world about its nation-building achievement," said King.
"It is frightening that they should regard
Singapore as a good model to
follow."
Years of robust growth in Singapore were driven
initially by waves of foreign capital into the city-state and more
recently by the import of foreign workers, who now make up
one-third of the population. The government's jealous husbanding of
much of the economy, meanwhile, has rendered impotent much of the
nation's faculty for creative business.
"Its
entrepreneurial, innovative capacity is quite small. It's got a
very small local private sector, unlike say South Korea and Taiwan,
where there are vigorous entrepreneurial cultures. In Singapore,
they don't really have that," said King, who spent many years
working in the
island-state.
It is unlikely that Singapore says this in its
diplomatic and commercial outreach to Myanmar. Ashfaqur Rahman,
chairman of the Center for Foreign Affairs Studies in Bangladesh,
had no doubt what Singapore hopes for when he noted how it shunned
the previous Western policy of making a pariah of the ruling
junta.
"The basis of this strategy was to gain from a
relationship which was essentially economic. Singapore invested
heavily in Myanmar and traded with her. It even pushed other
[Association of Southeast Asian Nations] members to allow Myanmar
to join the regional organization."
Myanmar citizens, who for decades have been mired in
corrupt economic lethargy, are no doubt dazzled by Singapore's
success in turning a former modest British trading hub into a
confident modern nation with a per capita income among the highest
in the world.
Remarkably an island state with just 1% of
Southeast Asia's population still attracts nearly half of its
foreign direct investment. Yet this success has come "at
considerable costs in terms of independent development, human
rights, freedom, and workers rights", according to an academic
paper published last
year.
That
part of the economy not in foreign hands is dominated by
government-controlled institutions run by the local nomenklatura.
Keeping an every present watch is the People's Action Party (PAP),
which has run virtually a one-party state since
independence.
"One of
the key features of the Singapore model is that the commanding
heights of the economy are controlled by the state - directly or
indirectly. Burma [Myanmar] had all its
state enterprises taken over in 1962 by [the late general] Ne Win,
which has just dragged the economy into the ground," said
King.
"If they were going to follow the Singapore model
they would be just repeating the mistakes that they have already
made. Singapore
crushes individual enterprise but [Myanmar] is going to need all
the enterprise it can possibly muster to get over 50 years of
chronic warfare and political
repression."
King's criticism might have less sting given
Singapore's wealth were it not also echoed by an increasing number
of complaints rising from within the city-state. Indeed, many now
question whether the "Singapore model" is still valid.
In last year's general election the ruling party
won its lowest share of the vote since
independence.
Productivity gains have been notoriously weak for
decades, hardly what the casual observer might imagine from a
country regularly ranked as one of the most
competitive.
The American economist Paul Krugman infuriated
Singapore's founding father Lee Kuan Yew 20 years ago by claiming
Singapore's growth could be explained by more of everything -
capital and labor - except efficiency.
Ever since the launch of the "Teamy the Productivity
Bee" campaign three decades ago, the government mantra has been to
focus on generating greater added value. Despite myriad training
initiatives, worker productivity has barely grown by 1% a year in
the new millennium.
Growth has been sustained by an inflow of foreigners
that has doubled the island's population since 1980, with
foreigners and non-Singapore born citizens now representing
three-fifths of the population. "We've grown in the last five years
by just importing labor," said Lee Kuan Yew himself in
2010.
The country arguably hasn't maximized that influx.
"They imported all these scientists and
technicians from all over the world but the outcome has been fairly
modest. These people have found working in a bureaucratic structure
quite stifling," said King. The authorities "spend tons of money on
resources but the ambience isn't there really. They seem to be able
to attract talent, but when they get them they can't operate the
way that they want."
Equality gap
Singapore shone in the headlines again recently when
one of Facebook's founders, Eduardo Saverin, was revealed to have
given up his United States passport in favor of residency in
Singapore to "invest like crazy."
Saverin joins an elite of
super-rich floating on top of an ordinary public, many of whom
struggle to make ends meet in an increasingly expensive city. The
bottom half of the population experienced either falling real
income, or no gain in income, over most of the last
decade.
High
inequality levels have combined with falling social mobility,
reinforcing the grip of the privileged upper class to the point
where even the government recognizes this threatens the social
compact.
One of the city-state's most respected economists,
Professor Lim Chong Yah, said in April that the city's Gini
coefficient (a measure of equality) of 0.47 was approaching the
"danger level" of 0.5 when typically income inequality starts to
tear at a country's social fabric. He has advocated a "shock"
therapy of pay rises for workers and tax penalties for the
rich.
King estimates one-fifth of the population lives in
poverty as measured by Organization for Economic Cooperation and
Development standards. "They have been able to attracts lots of
foreign direct investment … at the cost of Singaporean living
standards."
Singapore may now have passed some sort of inflexion
point. The first two generations of PAP leaders have faded from the
scene - aside of course from the Senior Lee himself - and the
younger leaders do not seem to hold the power to cow the population
as in the past.
"This
has been a country of frightened, intimidated people. In the 1950s
and '60s, Singaporeans were feisty, gung-ho people but Lee and co
killed their spirit," said
King.
This
past timidity in the face of authority permitted a series of policy
mistakes followed by awkward U-turns. One notable quirk came in
1970 when Lee discouraged big families after deciding the
population was too high, only years later changing his mind to beg
(rather comically) Singaporeans to breed more
freely.
Over the years, careful observers have pointed out
that Singapore's "success" owed much to being a small, compact
island that made political and social control relatively easy, so
enabling it to experiment with robust but effective national
development strategies.
By contrast, Myanmar is an infinitely more
complicated jigsaw of ethnic, geographic, economic and historic
problems in a space that is one-thousand times bigger. "Vast,
sprawling countries like Indonesia, (Myanmar) and Thailand … would
find such strategies a great deal harder to implement," said
King.
To be sure, Singapore's founding myth as a mosquito-infested
swamp of palm plantations and kampong dwellers in 1965 is a
compelling one for underdeveloped countries like Myanmar eager to
learn the secrets of rapid
enrichment.
Nothing
could be further from the truth, however. In 1965, Singapore was
one of the most developed cities in Asia in terms of industrial
development, living standards and literacy of the population,
argues King.
"Singapore's nation-building success, such as it is,
was based on a set of highly favorable circumstances that are
unlikely to be found elsewhere," he said.
Singapore surely must be praised for many things,
not least its relatively clean dealings in a region benighted by
corruption. But, if King's assessment is correct, then Myanmar
might be wise to examine carefully the advice from an authoritarian
state of growing inequality struggling with low productivity and
rising social unhappiness.
William Barnes is a veteran
Bangkok-based journalist.
(Copyright 2012 Asia Times Online (Holdings) Ltd.
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