Singapore citistate will survive troubles

June 01, 1998|By Neal R. Peirce

WHAT happens to a world-famous, smoothly functioning citistate when the nations around it fall victim to economic convulsion and political upheaval?

To find out, watch Singapore. All spring the leaders of this 238-square-mile island of booming trade and finance watched nervously as the economies of neighboring Indonesia, Thailand and Malaysia deteriorated.

The Singapore dollar, Singapore stock exchange and Singapore property values all declined sharply. Now Indonesia's President Suharto has been forced from power. Total Indonesian economic collapse could be just a month or two away. Another fear: massive flight of Indonesia's 7 million to 8 million Chinese, fleeing violence and seeking refuge in tightly packed Singapore, a nation of just 3 million people.

Yet if any place on earth could steel itself against such threats and create security in the midst of chaos, it's this citistate.

Expelled from Malaysia in 1965, dependent on neighbors for raw materials and drinking water, Singapore once had an economy likened to a rickety sampan. Yet today its per-capita income is greater than Great Britain's. It's the world's largest port (handling 14 million containers last year), third-largest oil refiner, a major center of global manufacturing and service industries.

For two years running, Singapore's economy has been ranked the world's most competitive (for medium-term growth) by the Swiss-based World Economic Forum.

A paternalistic technocracy led by brook-no-opposition leader Lee Kuan Yew pulled off the Singapore miracle. And the government is fiercely controlling. Critical media is hit with lawsuits. Property is easily seized for development projects. Spitting, chewing gum and spraying graffiti bring heavy penalties. Sell drugs and you can expect a death sentence.

Impressive showing

But Singapore's plus sides are stunning -- full of lessons for the world. William Stafford of the Seattle Chamber and Trade Development Alliance led a study mission of 85 top Seattle business and government leaders to Singapore this spring. He reports:

"Singapore had the most impact of any of our trips. We wouldn't want to emulate their government. But they make an art form of global best practices. Want to build the world's best port, best airport, best housing or public transportation system? Check Singapore."

Take public transit -- not an afterthought, but developed as an integral part of Singapore's economic development strategies.

The system encompasses 52 miles of rail, 48 stations, trains comparable to the London and Paris metros, linked to bus services feeding passengers to the stations. Now elevated circulator systems are being added in some neighborhoods, linked to the rail.

Highest homeownership rate

Nine of 10 Singapore citizens own their own homes -- the world's highest homeownership rate. Why? An ingeniously devised Central Provident Fund that started out as an old-age social security fund and has turned into a mandatory savings plan that lets citizens withdraw funds for vital uses such as buying an apartment.

Topping that, government subsidizes at least 30 percent of the cost of a home -- a conscious decision to share the huge national assets built up from Singapore's budget surpluses and strong export-oriented economy.

The net result: a rare degree of citizen ownership, even in an aggressively free-market state. People don't seem to mind, for example, that members of Singapore's professional civil service, educated in some of the world's finest universities, get astonishingly high salaries. The public sector's seen as part of a success system.

Predictably, Singapore has high-quality schools -- although there's criticism that in this obedient society, students too often learn by rote and don't gain an entrepreneurial spirit. The government's antidote: programs to introduce more creativity into schools.

It's a task that information technology -- Singapore's ambition to be a world-leading "intelligent island" -- matches nicely. While most world regions merely debate the point, Singapore is fully committed to early completion of a fiber-optic broad-band communications network.

That means fastest-existing speeds, Internet connection to the world, instant transmission of information ranging from business data to educational materials to entertainment.

Could economic and social chaos in close-by Indonesia disrupt Singapore's multiple growth agendas? My answer: delay, maybe. But there's no stopping it. The Singapore citistate has built a base to bring it through the most tumultuous times.

Neal R. Peirce is a syndicated columnist.

Pub Date: 6/01/98

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