Wednesday, October 04, 2006

2002 book quoted in 2006? What gives?

Lifted off the Straits Times:
Oct 5, 2006 An elitist strategy in the best sense

This is an excerpt from Singapore's Success: Engineering Economic Growth, a new book by former International Monetary Fund official Henri Ghesquiere. The book is published by Thomson Learning, Singapore, 2007

'THERE is little doubt that the PAP leaders are elitist,' wrote (University of British Columbia dons) Diane Mauzy and R.S. Milne*. 'They admire the power of the intellect, and they believe that only a few of the best and brightest are capable of leading well.'

The elite, in the Singapore context, however, is merit-based.
Unlike in some other countries, it is not a closed, privileged, hereditary social class that succeeded in capturing the state. The strategy that the governing elite selected was conducive to political implementation of growth-enhancing institutions. Three features can be identified that many other countries lacked.

First, a long-term vision of economic growth became Singapore's central focus. Other goals coexisted, such as survival as an independent country, building a national identity, and ultimately reaching First World standards in the arts and culture. But economic growth was needed to help fulfil these other national goals.

The primacy of achieving long-term economic prosperity for society as a whole set Singapore apart from many other nations. Mr Goh Keng Swee, Singapore's first finance minister and also defence minister, expressed it succinctly. 'We must strive continuously to achieve economic growth, which requires political stability, and should not be distracted by other goals.'
Other goals were thus subordinated, such as ideological notions of achieving redistributive justice via social transfers or tax policy.

Communist countries had different priorities. China's primary preoccupation, until 1976, was to wrest power for the peasant class by breaking a four-millennium-old feudal order, and to rebuild the nation. Only in 1982 did Deng Xiaoping declare as a primary goal turning China into a modern prosperous country by reforming and opening up its economy.

Still other countries channelled vast collective energy into restoring an earlier balance of political or economic power between different ethnic, racial or religious groups. Or they went to war over border disputes, often resulting in negative productivity growth, meaning that total output declined even if inputs increased. Pervasive uncertainty precluded high levels of investment and talented individuals emigrated or perished.

Singapore's elite had none of that: 'Unless you have economic growth, you die' was the government's maxim. Divisiveness was shunned. Singapore, as consecrated in its Constitution, is a multiracial society that accords equality to all citizens regardless of race, language, or religion. Laws enforce this. There is constant concern not to upset internal balances and to maintain stability.

Engineering prosperity for all was the best way to preserve internal cohesion, ethnic peace, and harmony, and to survive. Economic growth became the beacon for the city-state's collective destiny, not just to survive, but to prevail through superior performance.

Second, in Singapore, the governing elite chose a strategy that would share the benefits of economic growth among the populace - not through income redistribution policies, which tend to impede economic growth. Instead, the preferred strategy was to arm men and women with the means and opportunities to earn a living and acquire assets for their families by raising the skill level, including that of lower-income groups, and thus ensure upward mobility.

For Singapore's elite, this win-win offer was perfectly rational: Wealth would be shared or it would not exist. The only viable model was export-led growth that would take advantage of Singapore's location and make optimal use of its one resource, its people, creating social unity in the process. The dearth of landed estates and other natural resources precluded the feudal model as a source of privileges.

However noble the intentions underlying Singapore's social policies, it was in the elite's own interest to more widely extend economic opportunities, such as education, and thereby expand its own group to new entrants. Universal education and numerous scholarships helped bright children of poor parents make it through university. This contrasts with the elite groups in some other countries.

Feudal aristocracies in countries such as Pakistan with extensive landed property were willing to broaden their circle to include industrialists under import-substitution policies. They would not, however, provide quality education on a large scale to girls and boys in rural areas, lest their power slip away. The result in many instances has been a low-level equilibrium with poor agricultural yields, harking back to an older model of apportioning economic rents, not creating new wealth.

Third, the politically dominant group in Singapore was willing to be held accountable. Although political participation is constrained in Singapore, it needs emphasising that the elite freely accepted limits on the exercise of power by the government. It accepted checks and balances that curb the natural tendency of power to corrupt. This set Singapore apart from dictatorships, kleptocracies, and regimes under arbitrary personal rule and helped legitimise the government.

Several aspects can be highlighted. Firstly, Singapore's judiciary acts as a check on political power. Top government officials are accountable before the courts, and have been summoned. (Minister Mentor) Lee Kuan Yew and his son, (Prime Minister) Lee Hsien Loong, both underwent a thorough court investigation in 1996 for allegations of real-estate improprieties and were acquitted.

International surveys routinely rank the city-state very high for maintaining the rule of law, upholding property rights, and using the law to maintain probity of politicians and civil servants.
Secondly, the dominant party regime does not imply absence of democracy: Parliamentary elections are held within a five-year term limit, most recently in May 2006. Elections are contested freely. There is no ballot rigging or intimidation of voters. Singaporeans have the means to change their government democratically, although major obstacles are placed in the way of the opposition.

The PAP's dominance over the opposition parties since the late 1960s, its advantage of incumbency, and the electoral rules it has crafted over the years gave the party commanding heights: Often victory was assured before Election Day, due to a dearth of opposition candidates.
Nonetheless, voting outcome, which has ranged from 61 per cent in favour of the PAP in 1991, to 75 per cent in 2001, and was 67 per cent in May 2006, serves as a scorecard of popular approval. As felt by the government, the periodic requirement to seek a renewed mandate in front of the electorate is a powerful spur to deliver the shared prosperity, personal safety, and public order, which voters have come to expect.

By creating widespread employment opportunities and improving living conditions, the politically dominant group in Singapore acquired and kept a popular mandate to pursue its long-term economic growth strategy.

Thirdly, another countervailing force in Singapore's case, somewhat unusual but influential nonetheless in the current highly competitive globalised environment, is the MNCs. Singapore's strategic dependence on the MNCs as an engine of economic growth provided an additional check against some types of government failure, since political stability, a non-corrupt government, and sound economic management are critical to boosting investor confidence in the economy. Singapore combines a strong state with atomistic markets, rather than a strong state with monopolistic market power.

In sum, Singapore's elite, which established power in the 1960s, subsequently co-opted talent from across society and succeeded in building growth-enhancing institutions. It succeeded by choosing as the central priority a strategy of long-term economic growth. It widely shared the opportunities to participate in that growth and was prepared to be held accountable for its exercise of power. All three features set Singapore apart from many other countries. The dominant group in society established an accepted social contract for a viable long-term strategy.

That strategy was in the best interest of the elite - and the people. The PAP realised that it had to improve economic conditions to prevent the communists from focusing on the grievances of the unemployed. Singapore lacked natural resources to divide as spoils. Once political power was consolidated there were no rival groups to be placated through bribery.

A high level of integrity strengthened the PAP's power. This insightful strategy enabled the elite not just to survive but to thrive at the head of a secure, respected, and dynamic nation. Self-actualisation was achieved by helping the citizenry attain its full potential.

This was a powerful incentive and the elite seized the opportunity. The coincidence of self-interest of the elite and development of the people was fortuitous and a cornerstone of Singapore's success.

*Diane Mauzy and R.S. Milne, Singapore Politics: Under The People's Action Party, Oxford University Press, Singapore, 2002

And while the local reader in Singapore is wowed by these excerpts it might be good to bear in mind that these form, in all probability, less then 2%, if at all, of the cited book. All who have written theses know that one can selective quote authors to achieve the media equivalent of a sound bite. I wonder what is in the rest of the book given that Professor Mauzy also teaches and writes on human rights.

With a local press, though gradually opening up, dominated by the government under the guise of legitimate corporate shareholdings it is pertinent that clarification be sought for such 'pats on the back.'

Edit 9th October 2006: Prof Mauzy has kindly written back on a query posed to her to on the one line quote taken off her book. It is hers. The rest, correctly belongs to Mr. Henri Ghesquiere.

Henri Ghesquiere, whom the rest of the article cites, would make a favoured (by today's regime) PR or future citizen of Singapore and should be invited as such. And thereafter I would suggest to Mr. Ghesquiere to set up a company here to service local activities since he appears to believe that "Singapore combines a strong state with atomistic markets, rather than a strong state with monopolistic market power."

I would further invite Mr. Ghesquiere to attempt, as an academic exercise, to fulfill the role of an 'opposition' politican here in Singapore under our wonderful system to understand his statement on why there is a 'dearth of opposition candidates.'

Wonder if the recent GE might be a slap in the face for Mr. Ghesquiere's analysis on the state of the opposition here in terms of number of candidates? A short bio lifted of his recent book launch here in Singapore, I hope it wasn't a cover letter in his application for citizenship:

Venue: Level 1, Visitors Briefing RoomDate: Saturday, Sept 2, 3.00pm-5.00pm

This book seeks the key to good economic policy by explaining Singapore’s remarkably rapid development—the world’s fastest growing economy in 1960-2000—and asking whether Singapore’s success can be transferred to other countries. Come find out more about this title as the author Dr. Henri Ghesquiere makes an appearance!

Dr. Henri Ghesquiere is a former Director of the IMF-Singapore Regional Training Institute (2004–05) andwas on the staff of the International Monetary Fund during 1978–2005. At the IMF he was closely involvedwith macroeconomic lending programs and growth-oriented stabilization policies in Latin America, Africa,Eastern Europe, and Asia. As a senior IMF official in numerous countries, the author has accumulated a vast amount of practical experience. Henri Ghesquiere holds degrees in humanities and economics from the Universityof Leuven, Belgium and earned his Ph.D. in economics from Yale University. Among his publications isa book on economic development in South-East Asia (1976).

Is economics truly the be-all-end-all question for societies that are growing? Are there no other fronts of growth for humanity other then economic growth? I do not know, I feel and believe there is more to humanity then economics and strong government, even in Singapore, but who am I compared to a person such as Mr. Ghesquiere to which the 'world at large' would blindly respect given his appearance of authority?