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Singapore and the Asian Century

Gabriele Giovannini and Emanuele Schibotto

 

When, on August 9, 1965, Singapore became a sovereign state following its expulsion from the Malaysian Federation it was, without any doubt, a poor country. Yet only four decades later, the former British colony boasted the second most competitive economy in the world and a per capita income higher than that of the U.S.

The financial guru Jim Rogers told the CNN in 2012: “I have moved – I have sold my house in New York. I have moved to Asia and my girls speak Mandarin, speak perfect Mandarin … I’m preparing them for the 21st century by knowing Asia and by speaking perfect Mandarin…It’s easier to get rich in Asia than it is in America now. The wind is in your face. The U.S. is the largest debtor nation in the history of the world. The largest creditor nations in the world are China, Japan, Korea, Taiwan, Hong Kong, Singapore. The assets are in Asia. You know who the debtors are and where they are. Look at Greece. Look at Spain. I mean, I don’t like saying this. You know, I’m an American, too. But facts are facts.”

But why Singapore and not, for instance, China? What role does the city-state play – and what role will it play – within the so-called Asian Century? What does the country represent for the West in coping with its decline in favor of an emerging East? As Professor Kishore Mahbubani, former ambassador of Singapore to the United Nations, currently dean at the Lee Kuan Yew School of Public Policy of the National University of Singapore and one of Asia’s leading thinkers, explains, “Singapore has been able to exercise regional influence by generating good ideas. For example, Singapore noticed that while there were strong Trans-Atlantic institutions like NATO and OSCE and strong Trans-Pacific institutions like APEC and EAS, there were no strong institutions linking Asia to Europe. This was clearly a missing link. This is why the former Singapore Prime Minister, Goh Chok Tong, proposed the idea of an Asia-Europe Meeting (ASEM). I was then the Permanent Secretary of the Foreign Ministry of Singapore, and I made several trips to Europe to try and persuade Europe to adopt this idea. Fortunately, France was the first country to support this idea. Since then, ASEM has taken off. ASEM has also established the Asia-Europe Foundation (ASEF) in Singapore.”

From this line of thinking it emerges quite clearly how Singapore has a potential role that goes well beyond its material capabilities. Nonetheless, the very foundations of its political and social system are closely related to the necessity of being open to the outside world in order both to assure survival and to achieve development. In the view of its founding father Lee Kuan Yew, in fact, global interconnection, education (especially English proficiency), and a harmonious society were the three milestones on which a promising future could be built. The policies that were adopted began to show results from the early 1970s, enabling the country to attract foreign direct investment (FDI) from leading multinationals such as Hewlett-Packard, Motorola, Hitachi and Siemens.

Mahbubani underlines how this rapid growth couldn’t have taken place without the leadership of Lee Kuan Yew and S. Rajaratnam, whose focus hasn’t been merely on “economic development but also on human development. From day one, Singapore paid attention to the social needs of its people: from housing to health care, from education to the environment. As a result, not only did Singaporeans enjoy rapid economic development, they also enjoyed living in one of the world’s most liveable cities.” In fact, as Michael Schuman writes in his book The Miracle: The Epic Story of Asia’s Quest for Wealth, the most striking difference of Singapore’s economic strategy from the “Asian model” practiced at the time was “its use of foreign investment to generate rapid growth.” Lee Kuan Yew, Singapore’s founder and then its Minister Mentor, “turned the government into a foreign investment promotion machine that aggressively pursued international companies.”

 

The article’s full-text is available on the website of The Diplomat

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