Singapore’s social welfare policy is like a trampoline, said Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam, with the Republic providing support that encourages citizens to take up opportunities without undermining personal and family responsibility. Mr Tharman made this comment at the 45th St Gallen Symposium early this month, where he was interviewed by BBC HARDtalk presenter Mr Stephen Sackur, in a segment titled “An investigative interview: Singapore 50 years after independence”. During the 45-minute discussion, Mr Tharman also took on questions on authoritarianism and the key factor behind Singapore’s success. Below is an excerpt from the interview.
The St Gallen theme, as you know, is all about size and scale and about this notion that sometimes, all of us in different forms — political, economic, management — can learn a lot from small. And obviously, Singapore is a small nation that has achieved extraordinary things. So if one looks at an overview over the past 50 years, if you can define one thing that has been of paramount importance behind Singapore’s rise, what would it be?
An attitude of mind. We converted permanent disadvantage into continuing advantage. What disadvantage did we have? We were not a nation that was meant to be. A diverse group of people coming out of colonial migration patterns, very different origins, very different belief systems and religions. We were small, no domestic market, decolonisation had happened suddenly and the British withdrew their military forces quickly, and impacted a very large part of the economy. We were surrounded by much larger neighbours to our south, about 50 times the size of Singapore, and at the very outset, objected to the very formation of Singapore and Malaysia.
We had every disadvantage you could think of for a nation. We did not expect to survive, we were not expected to survive. But that, to (founding Prime Minister) Lee Kuan Yew and the pioneer team of leaders, was converted to advantage, because it forces you to realise that all you have is yourself. The world owes you nothing. And that mindset, thinking of yourself as not having the advantage of size or history and that you’ve got to create it for yourselves, turns out to be a phenomenal advantage.
Maybe it was size that allowed you to find the collective will that those other larger nations could not forge.
People think of Singapore as an economic success — that’s what sort of catches attention easily — per capita gross domestic product and so on. But what was really interesting and unique about Singapore was social strategy. And most especially, the fact that we took advantage of diversity — different races, different religions — and melded the nation (to one in which) people were proud of being who they were, but were Singaporean first and foremost.
But was it melded from top-down? And we can’t get away from the figure of Mr Lee Kuan Yew himself. It wasn’t there from the beginning. He imposed it.
The natural workings of society would not have led to that happening. Not just in Singapore, but anywhere in the world. The natural workings of society would likely have led to mistrust, discomfort, bigotry and what we see in abundance in many countries in the world today. The most intrusive social policy in Singapore has turned out to be the most important. And it has a level of intrusiveness that doesn’t come comfortably to the liberal mind.
What is it?
Housing estates. Eight-five per cent of Singapore live in public housing. Because when it’s 85 per cent, it covers the lower-income group, the middle-income group, the upper-middle-income group. These are middle-class housing estates.
But every single block of flats and every single precinct requires an ethnic balance. That’s intrusive, because you’re constraining. So once a particular ethnic group gets beyond a certain quota in that block or precinct, the resale market has to adjust. You can’t just get more and more of the same people concentrating themselves in the same neighbourhood. And I’d say when this was first done, I don’t think we knew how important it was going to be.
I mean it sounds extraordinarily … authoritarian!
It was intrusive. And it turned out to be our greatest strength. Because once people live together, they’re not just walking their corridors together every day and taking the same elevators up and down; their kids go to the same kindergartens, the same primary schools. Because all over the world, young kids go to schools very near to where they live. And they grow up together.
The lessons coming out of Baltimore, the lessons coming out of France’s large cities, the lessons coming out of all our societies, show that neighbourhoods matter, place matters, where you live matters. It matters much more than economists thought. It matters tremendously in the daily influences that shape your life and the traps that you fall into.
To some of our sensitive flowers in the West, the authoritarianism that underpins that approach to managing a society feels uncomfortable.
Yup, so that’s caricature. I mean, even The Economist, which is not exactly a cheerleader for Singapore, would say, as it just did in its editorial form of obituary when Mr Lee Kuan Yew passed away, that Singapore has free, fair and regular elections.
It’s a democracy of sorts. You don’t have a genuinely free, truly liberated press … when journals that are respected and have a role to play, like The Far Eastern Economic Review, are hounded by your government for years and years.
No, the rules are very clear and simple. Singapore is an extremely open society, by virtue of the number of foreign publications that are circulated — well over 5,000. Singaporeans are, probably more than any other society, broadband-penetrated, and the English-educated have access to a whole world of information on the Internet.
We are unconventional in requiring in our laws that we have the right to reply when foreign publications publish something that we feel is false or misleading. And when publications refuse to publish a reply, we impose restrictions on them that affect their advertising revenues. Unconventional, and you might not agree with it, but the larger point is this: We all need some humility on the ways that best advance a liberal order. We all need some humility as to how we achieve that, not just for today, but for tomorrow. How do you sustain it? The most thoughtful observers in the West are of the view that you need some buffers, some margins of safety, and you need some compromises on some liberties in order to achieve others.
And the freest possible media is not the only liberty we aspire to. I do think it’s a good idea, by the way, it appeals to my ideals, but it is not the only liberty you aspire to. You do aspire to a liberty of being able to walk the streets freely, particularly if you’re a woman or a child, at any time of the night; you aspire to the liberty of living in a city that is not defined by its most disorderly elements; you aspire to the liberty of having the opportunity for an education and a job, regardless of your race or social background; and you aspire to a liberty of practising your religion without fear of bigotry or discrimination. Those are very important liberties in many societies, and they are lacking in many societies.
Maybe your system is coming to a crossroads or a turning point, because the digital age is changing things somewhat. The information flows and the top-down approach that your society has taken perhaps don’t fit so easily into the digital age. I wonder whether Singapore is going to have to change, and whether the authoritarian model, if you don’t mind my using that word, is going to have to be reviewed and fundamentally adapted. What do you think?
I don’t expect, and I don’t think any of my colleagues in government expect, it’s going to remain this way forever. It has to evolve! We start with the cards we’re dealt with. The history I described briefly earlier on did shape choices. It shaped social choices, it shaped political choices.
But we must never be trapped by our history. We have to keep evolving. And it is a worldly ideal to aspire for a system where individuals are well educated, good judges for themselves of the information they read on the Internet or in the media, and able to make up their minds. But how do we do it in a way that’s self-sustaining, and that if all forces are let loose, whether it is the media or anything else, you’re still able to achieve the liberties that matter most to people? Safety, freedom of religious belief, the freedom to aspire in life and achieve what you want through hard work — those are very important liberties.
But will Singapore always be the kind of society where the government says you can’t live (in an estate) because the quota for your particular ethnic group has been reached. Is it going to be that kind of society forever?
That’s imponderable; I think it’s naive to think you can lift (the policy) and people will automatically gravitate towards diverse neighbourhoods and you won’t, in fact, get the reverse. Because if you look at the most advanced democracies, that’s exactly what has happened. You have that in the United States, France, Germany, even in the United Kingdom. In the UK, half the Muslim population lives in the bottom 10 per cent of neighbourhoods. Did it happen because of some random chance? Or because that’s the natural working of society? We have to address these facts honestly and realise that everyone has biases, discomforts and a sense of liking or distrust for one another.
And there is a role for government and elected representatives to unify people, which doesn’t happen through speeches. It means you need mechanisms and instruments, and they mustn’t be too constraining on individual choice. But you do need to constrain some things, and you end up a better society, or you don’t. That’s the test. Not whether the government is right. You end up with a society that people feel more comfortable in. That’s the real test. It’s easy to talk about Singapore, but quite frankly, this is a challenge we all face.
Another challenge you face is about the size of government. If you look at the figures, your government is an advocate of massive state spending. I mean, that’s the way you run your country. Because you’ve got such a successful economy, you’ve managed to do it with budget surpluses until last year, when you fell into a deficit. And I don’t know whether you are worried, but looking forward, particularly if you mix demographics with the size ambition of your government, you are going to run into real problems.
I think we’re a very interesting case of a country that has low government spending, by the way, by most standards, as a percentage of GDP.
As long as your GDP keeps climbing.
Yes, but our starting point is not a bad one. We’ve got relatively low government spending and revenues, but we’re able to achieve the social outcomes that countries with much larger spending do. And how do we do it? I think one of the very important lessons of the last 50 years is that traditional concepts of welfare, social expenditure and government intervention have led to a weakening of private initiative and personal responsibility. Not because that was the intent. It was never the social democratic intent to weaken private initiative and family responsibility.
I mean, look at the Scandinavian countries. They used to be among the most hardworking countries in the world. The Swedes were incredibly hardworking, industrious people.
You’re using the past tense, are you? The Swedes have become lazy? Or what’s happening?
Present active tense. They’re a good society in many ways, and they’re willing to pay high taxes to keep their system going. But the point is, there are ways in which an active government can intervene to support social mobility, develop opportunities and take care of the old, but not undermine personal and family responsibility. And that’s the compact that we’re trying to achieve. And it’s almost a paradox.
You mean you’re a bit more ruthless. Is that what you’re saying?
No, we’re achieving a paradox of active government support for personal responsibility, rather than active government support to take over personal responsibility or community responsibility.
Do you believe in the concept of a safety net?
We believe in a concept of support for people taking up opportunities. So we don’t have unemployment.
I believe in the sometimes simplicity of yes-or-no answers. What about this idea of a safety net? Does Singapore believe in the notion of a safety net for those who fall between the cracks of a successful economy?
I believe in the notion of a trampoline.
So people are just bouncing up and down in Singapore?
No, it boils down to what policies you’re talking about. If you provide help for someone who is willing to study hard; if you provide help for someone who is willing to take up a job and work at it, and make life not so easy if you stay out of work; if you provide help for someone who wants to own a home — and we are very generous in our grants for home ownership, which is why we have 90 per cent home ownership and, among the low-income population, more than 80 per cent own their homes — it transforms culture.
It’s not just about transactions, it’s not just about the size of grants, it’s about keeping alive a culture where I feel proud that I own my home and I earn my own success through my job. I feel proud that I’m raising my family. And keeping that culture going is what keeps a society vibrant.