15 November 2018
A woman in Singapore holds a copy of a special edition of Lianhe Zaobao about the death of Lee Kuan Yew. Photo: Bloomberg
A woman in Singapore holds a copy of a special edition of Lianhe Zaobao about the death of Lee Kuan Yew. Photo: Bloomberg

What Lee Kuan Yew did right

Lee Kuan Yew, a founding father of Singapore, ruled the city state as its first prime minister for over three decades.

In 1960, the per capita gross domestic product of this mosquito-ridden island off the tip of the Malay Peninsula was a paltry US$428, but it soared to US$14,504 in 1990, when he voluntarily stepped down.

Singapore’s population grew from 1.4 million in 1957 to 3.13 million that year, official figures show.

Lee continued to wield substantial influence as senior minister (1990-2004) and minister mentor (2004-2011), his country striding from strength to strength.

By 2013, Singapore’s per capita GDP amounted to US$78,762, the world’s third-highest, International Monetary Fund figures show.

What did Lee do right in leading Singapore on its journey from third world to first?

The city state started on par with its bigger neighbors. Its location as a port on the busy Strait of Malacca was an advantage with which places in Malaya, as it then was, and Indonesia were also endowed.

When Singapore was expelled from Malaysia 50 years ago, Lee shed tears while announcing it on television.

His biggest concern was how his country would survive, surrounded by none-too-friendly neighbors and with very little by way of natural resources — in fact, the island relied heavily on Malaysia for its water supply.

Opening up

In his memoirs, Lee recalled the initial years of independence.

Back then he hoped the British army could stay longer to allow time for the newborn nation to set up its own defense force, as ties with its immediate neighbors remained strained.

Britain eventually pulled its military out in 1971, and that year Lee ardently lobbied the leaders of Britain, Australia, New Zealand and Malaysia for a multilateral mutual defense treaty to assure Singapore’s security.

Another challenge posed by the exit of the British forces was how to make up for their contribution to the local economy. They accounted for 20 percent of Singapore’s annual GDP and 30,000 jobs, Lee calculated.

Lee went all out to lure investment from abroad, especially from the United States, Japan and Europe, to rekindle the local economy.

What he strove to offer was an industrious, high-caliber labor force, sound infrastructure and an efficient and honest government.

Lee vowed to make sure that foreign investors could thrive in his country and attain satisfactory returns as long as they could provide jobs for locals and empower them with technology and management skills.

The motto back then was Singapore must be synonymous with the best goods and services offered at the lowest prices in Southeast Asia; otherwise it would have nothing in hand to stack up against its rivals.

Lee pinned his hopes on US investors like Hewlett-Packard and General Electric, which led a wave of foreign firms setting up sizable plants on the island.

During multiple visits to the United States during the 1970s and ’80s, he acted more like a business promotion officer than a state leader, doing “road shows” in many cities to promote Singapore as an emerging business and trade hub, a contemporary report in the local Chinese newspaper Lianhe Zaobao (聯合早報) said.

Lee’s opening-up strategy, which started earlier than China’s economic liberalization from 1979, worked in tandem with global trends toward free trade and globalization.

To some extent, his policies inspired China’s Deng Xiaoping and South Korea’s Park Chung-hee when their countries began to open their markets.

Southeast Asia was threatened by popular communist movements after World War II when the British, Dutch and French colonizers began to pull up stakes and head home.

Singapore was beset with widespread strikes in the 1950s and ’60s that continued after independence. Investors were deterred from betting on the island’s future.

Lee fought to curb the rights of labor groups when years of seamen’s strikes in Britain paralyzed and eventually shut down ports in London, Liverpool and Southampton in 1967 and even provoked a run on the British pound.

He told Singapore’s trade union leaders that year that he would never allow similar incidents to happen in his country and vowed to charge uncooperative strikers with treason for hindering Singapore’s development.

The People’s Action Party that Lee led subsequently amended the labor laws to make it easier for foreign investors to hire, transfer and lay off workers.

Lee also oversaw the founding of the National Wages Council, which gazetted recommended wage rises each year based on government statistics, so as to ensure that wage increases would not exceed growth in productivity.

Singapore’s business-friendly labor policy began to reap dividends.

Winning mechanism

To implement his grand vision for Singapore’s ascent, Lee believed he needed supreme authority.

Interestingly, at the beginning of his career he was a leftist.

Before he adopted a hawkish stance against labor groups, Lee started as a lawyer for trade unions after he graduated from Cambridge University in 1949 with a rare starred double first-class honours in law.

The People’s Action Party that he co-founded in 1954 also had a strong leftist streak with two pillars to its manifesto: socialism and independence from Britain. The PAP was once a member of the Socialist International, a socialist league.

Lee became ideologically more pragmatic when Singapore’s relations with Kuala Lumpur soured in the following years and ensuring the island’s security became an issue of overriding urgency.

Any stance that failed to advance this objective must be abandoned.

One example was Lee’s refusal to follow Britain’s Labour Party — once the PAP’s role model — in nationalizing much of the private sector.

That decision paved the way for a vibrant free economy, which flourishes under a proactive government.

To make sure that the PAP could win every election, an electoral and constituency system that looked fair but in essence tilted toward the party was vital.

Lee rezoned constituencies, pouring resources into those that supported the party and trimming public funding in those that voted against it.

A “winner takes all seats” multiple-seat constituency arrangement effectively crowded out contenders from the opposition.

Well-thought-out neighborhood planning in the name of ethnic amalgamation prevented other political parties from enlisting support from any particular ethnic group and avoided communal conflict.

As a result, the PAP has ruled Singapore since 1959.

Knitting it all together

In addition to the much-vaunted public housing program, which houses 84 percent of the population, the Central Provident Fund is another of the cornerstone social policies that knit together Singaporeans.

Lee foresaw the collapse of welfarism and enhanced the CPF — a retirement fund the British set up in 1955 into which employees and employers pay a proportion of salaries — to cover a citizen’s major expenditures in housing and medical care.

The uniqueness of this compulsory savings plan is that cumulative contributions can be transferred by inheritance to the next generation.

In a society mainly made up of ethnic Chinese, who traditionally save for the benefit of their offspring, the fund provides a way to accumulate wealth and pass it on to the younger generation.

The CPF keeps the government’s burden for spending on the elderly manageable and at the same time helps bring about long-term cohesion and stability.

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Singaporeans uses mobile devices to photograph an outdoor television screen broadcasting a tribute to Lee Kuan Yew. Photo: Bloomberg

A mourner prays next to a floral tribute to Lee Kuan Yew outside Singapore General Hospital. Photo: Bloomberg

EJ Insight writer

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