Friday, June 10, 2016

Who Rules Singapore? The Only True Mercantile State in The World – Analysis

The story of Singapore is an intriguing one. It’s about how an island at the bottom of the Malay Peninsula developed into a modern city state and into one of the most powerful economies in the Asian region. Singapore has also been one of the real financial powerhouses in the world.

It’s not just a story about power, but one of what was done to survive adversity and events going on around the world that were beyond Singapore’s control. Also within this story is how history, location, and people influenced what exists today. Society reflects some of the hallmarks of utilitarianism and even Confucianism; conservative, yet extremely modern at the same time. Economically Singapore has been enormously successful, yet the quality of life for the ordinary citizen is now a major issue of contention within the country’s citizens today. Singapore’s success today, is actually the challenge it faces tomorrow.

Although the methods by those who came to power have been criticized by many commentators, the leading elite of Singapore have been able to create a unique model of ruleand economy that not only maintained survival as a state, but with fabulous economic prosperity as well. The story of who rules Singapore is well worth investigation.

A brief history of Singapore – “The past makes the present”

The human history of Singapore started in the 14th Century with the probable rule of theSrivijayan Prince Parameswara. At that time, Singapore, then known as Temasek primarily consisted of jungle skirted by a small number of coastal sea gypsy villages. Temasek had no natural resources other than fresh water, and very poor fertile land. The only strategic geographical asset was Temasek’s position at the bottom of the Melaka Straits and a natural deep water harbor that had potential as an entrepôt for East-West trade at the time.

Four Hundred years later Sir Thomas Stanford Raffles landed on Temasek and immediately saw the potential of the island as an entrepôt,  strategically placed in the centre of the Dutch East Indies. As the island was nominally ruled by the Sultan of Johor, who was under the influence of the Dutch, Raffles brought the elder brother of the Sultan Tengku Hussein to Singapore, where he recognized him as the rightful Sultan of Johor, providing him with a yearly payment in return for the right to establish a trading post.

Raffles proceeded to develop Singapore as a trade centre for collecting commodities produced within the Malay archipelago, including bird’s nest from Borneo, spices from the East Indies and India, and gold from Bali. Raffles promoted Singapore as a free port with no taxes and aas strategic waypoint between India and China. Within four years, the population steadily increased to over 10,000 with the migration of Straits Chinese, Arabs, and Indians coming for trade, Malay traders from different parts of the archipelago, and Chinese from the mainland escaping the famine there. By the 1850s a very wealthy Anglicized elite grew out from the Straits Chinese, Indians, and Malay traders encapsulating Victorian values that they picked up from the British.

Raffles was able to attract many wealthy Arab traders from the Indonesian archipelago, who included Syed Mohammed bin Harun Aljunied and Syed Abdul Rahman Alsagoff, trading in spices, coffee, sago, rubber, and cocoa. These families went on to develop many businesses, controlling the inter-island trade, and developed many buildings within Singapore. The growing Arab community founded many wakafs or charitable foundations which created many Arabic and Islamic schools, and hospitals. At one stage almost all the land in the central business district was owned by these wakafs. It was only in the 1970s and 80s that much of this land was compulsorily acquired by the government with little compensation.

Boat Quay and the adjacent central Square (now raffles place) became the mercantile and commercial centre of Singapore. However the free port status hindered the East India Company collecting badly needed revenue to run the settlement. The drop in China tea trade in favor of Indian tea that mixed well with milk, put enormous financial pressure on the company, giving it problems in effectively policing the island. This lead to a rise in crime, vice, the rise of secret societies, and even lawlessness to some extent.

Up until the opening of the Suez Canal in 1869 ships sailing to China from Europe had to go around the Cape of Good Hope and through the Sunda Straits, stopping at Batavia to take onfresh water and supplies. However the new Suez Canal enabled ships from Europe to travel through the Straits of Melaka and utilize Singapore as a stopover. This led to a substantial rise in trade through Singapore, transforming the island into a lively entrepôt where goods from the Malay archipelago were picked up and shipments from Europe off loaded and broken up for distribution.

With the introduction of rubber in 1877, Singapore very quickly became the collection and shipment centre. With the invention of canned food, tin mining very quickly became an important economic activity on the Malay Peninsula, with Singapore becoming the centre of tin trade. Eventually the British took over the colony from the East India Company where the island underwent a building renaissance, eliminating much of the squalor. The new colonial administrators sent out to govern Singapore were university graduates, professional civil servants, and held strong Victorian morals. With the assistance of the local elite citizens of Chinese origin, the British squashed the secret societies and began a special relationship with the English educated Straits Chinese, known as babas.

Singapore grew and continued to thrive under British rule right into the early 1900s.  There was to this point in time no questioning about the British right to rule in Singapore. Many migrants from India, the Middle East, and China continued to settle in Singapore encouraged by the trade opportunities available and stability of British rule. However very few migrants at the time actually saw Singapore as their permanent home.

In 1911, the working class Chinese in Singapore developed a close interest in the nationalist revolution in China where Sun Yet Sen declared a republic. However the English educated Straits Chinese didn’t share this sense of affiliation with the events in China, as the Chinese educated did, which brought about some differences among the sentiments of the local population.

In the 1930s Singaporeans became caught up again in events occurring in China. The Japanese invasion and occupation of China in 1937 brought about a lot of resentment of the Japanese on the part of the working class Chinese in Singapore. They began boycotts of Japanese goods and engaged in anti-Japanese activities. The Japanese surprise attack on Pearl Harbor in December 1941 showed how vulnerable Singapore would be to any Japanese attack, especially with Singapore’s run down military infrastructure. The Japanese landings inSingora (now Songkhla), Pettani, and kota Bahru two days after Pearl Harbor brought great fear into the inhabitants of Singapore as British and Commonwealth forces were unable to stem the Japanese advance down the Malay Peninsula. Many troops fell back into Singapore and local citizens for the first time fought as equals beside the British in the defense of Singapore.

With the British shamed in surrender, the Japanese proceeded with an extremely cruel oppression and retribution against the local Chinese for their anti-Japanese stance. Up to 100,000 Chinese were rounded up and taken to different parts of the island for mass exterminations. Some Chinese escaped to join the resistance against the Japanese in the Malay Peninsula, many joining the Communist Party of Malaya (CPM).

Upon the Japanese surrender in 1945, the British to the disappointment of the local Chinese executed very few Japanese for war crimes. The British actually employed many surrendered Japanese soldiers as security forces who were unable with weakened authority to stop looting and revenge killings throughout the island. In addition electricity, water, telephone, and harbor facilities had been destroyed by British bombing prior to the Japanese surrender made living conditions almost unbearable in Singapore. Disease broke out, food was scarce, leading to malnutrition, the prices of necessities were extremely high, and there was mass unemployment. Nevertheless, returning British troops were welcomed with great fanfare by the locals, although many Chinese who had survived Japanese atrocities began to believe that they had some moral claim to Singapore.

The failure of the British to defend Singapore greatly destroyed British credibility as the ruler of Singapore. There was a general political awakening that came from discontent and disappointment that led to strikes and labor disruptions. A few Chinese and Malays who had fought the Japanese from the jungles of the Malay Peninsula now started a communist insurgency, which was spurred by Mao Tse-Tung’s rise to power in China during 1949. There was a movement for independence in Malaya, and aspirations for independence also started moving through Singapore’s population.

The initial legislature representation during the early 1950s was extremely limited to conservatives and professionals chosen by the Governor and Chamber of Commerce. The seats that were elected by British Subjects went to an equally conservative Singapore Progressive Party (SPP) which was not pressing for self rule. The British suppressed left wing groups through the use of the Internal Security Act (ISA) that allowed for indefinite detention without legal representation or trial for those who posed any threat to order and security. This suppressed any open talk of independence for a number of years.

With the Emergency dying down by 1953, the Singapore Governor Sir George Rendel opened the way for limited self government. A legislative Assembly with 25 out of 35 members elected was formed. An election was held on 2nd April 1955 with several new political parties contesting. The newly formed Labour Front won the largest number of seats and formed a minority coalition government with the UMNO-MCA alliance. A new party, the People’s Action Party (PAP) won three seats in the new assembly.

David Marshall, the leader of the Labour Front became the first Chief Minister of Singapore. However his government was very unstable, not receiving any support from the Colonial Administration or other parties in the Assembly. Marshall was pro-independence and led a delegation to London to unsuccessfully seek independence. Malaya was about to gain independence from Britain, but Singapore was not.

Labour and student riots broke out in 1955 leading to Marshall’s downfall as Chief Minister and replacement with a determined Lim Yek Hock. With British approval and assistance, Limlaunched an immediate crackdown on communist and leftist groups, imprisoning many trade union and pro-communist members of the PAP, including Lim Chin Siong and Fong Swee Suanunder the ISA.

David Marshall stayed in parliament and formed the Worker’s Party of Singapore in 1957. He lost his seat in parliament to Lim Yew Hock, but was re-elected in a by-election in the seat of Anson in 1961, losing it in the general election of 1963. Marshall went back to practice law and remained involved in opposition politics even after J. B. Jayaratnam became leader of the Worker’s Party in 1972. The Worker’s Party won seven seats in the 2011 general election and is now the only political party to have  been able to form any credible opposition in parliament against the PAP. Although Marshall had many differences with Lee Kuan Yew, he served as the Singapore Ambassador to France, Spain, Portugal, and Switzerland.

The people’s Action Party (PAP) was co-founded by Lew Kuan Yew (born Harry Lee KuanYew) from a prominent Straits Chinese family, and Lim Chin Siong, a Chinese educated trade unionist. Despite many ideological differences, a marriage of convenience between the English educated Baba middle class and Chinese educated union radicals was formed with the objective of obtaining self government and independence.

Lim Chin Siong rose up against colonialism through the union movement and was a very powerful and charismatic Hokkien speaker who could inspire the Chinese speaking population of Singapore. After his arrest by Lim Yew Hock in 1955, Lee Kuan Yew promised his releasealong with all the other unionists arrested, should the PAP gain power. The PAP decisively won the 1959 election and was forced to release Lim Chin Siong and the other unionists. It has been alleged that Lee Kuan Yew was actually in collusion with the British authorities and Chief Minister Lim Yew Hock to imprison Lim Chin Siong in the first place, to get his rival out of the way 1.

In 1961, Lim Chin Siong  together with Lee Siew Choh broke away from the PAP to form theBarisan Sosalis (Socialist Front). Initially the majority of PAP branches and secretaries went across to the Barisan Sosalis, threatening the very survival of the PAP 2. In the 1963 general election the Barisan Sosalis won 13 seats and became the opposition. The Barisan Sosalis was opposed to the merger negotiated with Malaya and campaigned very hard against it bringing much displeasure to the Malayan Prime Minister Tunku Abdul Rahman who put pressure on Lee Kuan Yew to rid Singapore of communist elements before merger 3. The Singapore Government attacked the Barisan Sosalis as being communists and launched OperationColdstore to arrest and detain without trial a number of Barisan Sosalis members including Lim Chin Siong, Lim Hock Siew, Fong Swee Suan, James and Dominic Puthucheary, and SaidZahari. The party declined after Singapore was expelled from Malaysia, with its members resigning from parliament, with its eventual dissolution and members joining the Worker’s Party.

Singapore joined the Malaysian Federation on 16th September 1963, but from the start had a rocky relationship with Kuala Lumpur. A number of issues emerged which began driving a wedge between Singapore and Kuala Lumpur. The policy of positive Malay discrimination, and the establishment of Islam as the state religion, ran counter to Lee Kuan Yew’s vision of a’Malaysian Malaysia’. In addition, trade between Singapore and the Peninsula was hindered, Singapore failed to grant the full extent of loans to Sabah and Sarawak as agreed before the merger, and Kuala Lumpur closed the Singapore branch of the Bank of China under the pretext it was funding communist activities. Many in UMNO also feared that Singapore through its economic power would come to dominate the federation. Relations between UMNO and the PAP reached a point where they were attacking each other in the media, and some people within UMNO were calling for Lee Kuan Yew’s arrest. Racial riots erupted in Singapore against positive discrimination for the Malays. Tunku Abdul Rahman, seeing no other alternative to avoid more bloodshed, expelled Singapore from the Federation. Both sides worked out the terms of separation and Singapore reluctantly declared independence on 9th August 1965.

Lee kuan Yew was genuinely shocked with Singapore’s abrupt expulsion from the Malaysian Federation. Singapore was still being destabilized by Indonesia. The international media was skeptical about Singapore’s viability and survival as a city-state with little or no resources. High unemployment, lack of housing and an abundance of squatters, poor sanitation, the danger of disease, little land for expansion, and blocked access to the Malaysian hinterland as both a market and source of natural resources cut off the island’s traditional sources of income. A large percentage of the population lacked any formal education. Even the island’s new sovereignty felt threatened with Malaysian troops still stationed in Singapore after the separation.

Singapore very quickly sought diplomatic recognition around the world joining both the United Nations and Commonwealth within a month of independence. Prime Minister Lee Kuan Yew,with the advice of the Economic Development Board set up by Goh Keng Swee and advised by the Dutch economist Dr. Albert Winsemius, formulated a plan to develop Singapore.

A definite development strategy became very critical after Britain announced that it was pulling its troops out of Singapore, which provided more than 25,000 jobs and 20% of the island’s GDP at the time. Lee Kuan Yew was initially hostile towards Britain, threatening to withdraw Singapore from the pound and handover the shipyards to the Japanese. However the then Minister of Finance Goh Keng Swee went to London and negotiated a 50 Million Pound soft loan, free transfer of some key assets, and help with military training for the new Singapore Armed Forces.

The government switched abruptly from an import substitution to an export orientatedinvestment approach. The Government fully supported industrialization using the shipyards and airfields to develop the marine and aviation service industries. The swamps around Jurongwere reclaimed and industrial parks developed. Labour laws were toughened and foreign investors given tax incentives for 5-10 years. Singapore was developed on the philosophy of a free market economy. Ministers travelled around the world looking for foreign investment promoting once again Singapore’s strategic location as an entrepôt. With the help of Dr.Winsemius, Philips was encouraged to set up electronics production in Singapore, as part of a strategy to develop higher value manufacturing.

The Housing Development Board (HDB) was set up to develop affordable housing forsquatters, along the same lines that British public housing converted slums in the UK. These housing estates were built all around the island and the Central Provident Fund (CPF) assisted people purchase these flats through installments, believing that people who owned their own units would look after their environment much better. This effectively broke up kampongs (villages) and eventually mixed up all races in Singapore into a developed urban society. The philosophy that progress must sacrifice tradition was reluctantly accepted as a necessity by the Singapore people, as they enjoyed rapidly rising living standards.

In 1968, Lee Kuan Yew sought a mandate from the people for these industrialization policies and the PAP received a resounding 84% of the vote.

From the 1970s to 1990s economic growth exceeded 7% every year and unemployment became almost negligible. Singapore evolved from relatively low cost manufacturing industriesto much higher value industries like wafer production and other electronics. Infrastructure likeChangi International Airport, the Port of Singapore, Am Mo Kio housing estates, the Mass Rapid Transport (MRT), and connecting freeways all around the island were constructed. Singapore’s living standards dramatically improved and a bolstered education system had developed the best skilled workforces in the region.

During this period the PAP almost totally dominated politics and won every seat in the parliament between 1966 and 1981, until J.B. Jeyaretnam was elected in the seat of Ansonas a member of the opposition.

Lee Kuan Yew ruled in an authoritarian manner and created a repressive system that punished free expression, independent political activity, the freedom of association, and other basic rights that are considered fundamental to the rule of law 4. Opposition politician Chee Soon Juan was convicted for illegal protests and J.B. Jeyaretnam had a number of defamation suits lodged against him. This harsh and authoritarian stance has often been justified as “Asian cultural differences”, something needed to achieve the development of the state 5.

In 1990, after 31 years as Prime Minister Lee Kuan Yew stepped down  in favor of a longtime ally, Goh Chok Tong. In 2004, Tong was succeeded by Lee Kuan Yew’s son, Lee Hsien Loong. Lee Kuan Yew and Goh Chok Tong maintained influence in Singaporean politics through the position of Minister Mentor and Senior Minister respectively until their retirement in 2011.

Lee Kuan Yew was a micromanager of economic and social issues. Lee Kuan Yew personally knew all the  important people involved in the domestic economy, and in the social arena, his views set the agenda with by-laws and even the formation of a Social development Unit to match-make talented Singaporeans, with a intention that this would produce a new generation of highly intelligent offspring. After his retirement from the premiership, he became a senior minister under Goh Chok Tong and Minister Mentor under his son Lee Hsien Loong.

Of late Singapore has been diversifying and strengthening its existing industries. Singapore has made a major investment in biotechnology. More than US $286 million has been invested in building a Biopolis biomedical research and development complex 6, with another  S$12 Billion to be spent on research between 2005-10. The Singapore Government very heavily promoted stem cell research when the Bush Administration restricted federal funding for this research in the United States. Singapore has shopped for the best experts in the world  in the expectation it can attract research to Singapore that is often restricted through ethical principles in other countries. Companies like Novartis, GlaxoSmithKline, Schering Plough, and Eli-Lily have all set up production facilities in Singapore. The state is hoping that local start-ups may eventually develop in this sector. However to date results have been mixed.

In the tourism Sector the new casinos are aimed at attracting Mainland Chinese and high rollerIndonesian money. Brothels filled with Mainland Chinese prostitutes operate openly in designated red light areas (DRAs), and direct air routes to secondary cities in China have beenopened up, making it easier to attract Chinese tourists. Similarly, Singapore is strongly hedging into medical tourism.

Modern Singapore has been built upon the same foundations that Sir Stanford Raffles envisaged. The Singapore economy has been maintained with a free market philosophy in a perceived corruption free environment. Per capita income exceeds that of most developed countries. Singapore is export orientated with consumer electronics and information technology products and services as important exports. Real GDP growth averaged more than 8% between 2004-2007. The economy contracted 1.0% in 2009, but rebounded 14.8% in 2010 because of a serge in exports. However growth reduced to 4.9% in 2011, and 2.1% in 2012 due to the European recession 7. The Singapore Government has continued to drive the economy through expanding existing activities like banking and ship repair and has developed new sectors like telecommunications. Singapore has attracted major investors in some of these areas and is continuing its efforts to establish the country as the regional financial and high tech hub.

Singapore is an archetypal ‘city-state’ which could be easily controlled economically and to a great degree socially as well. Its external relationship to the rest of the world has been open for trade, and a place for the rich and political elite to park their money. Singapore’s banking secrecy has allowed business tycoons with concessions in protected countries place profits in Singapore without any scrutiny. While the EU has sort to tighten banking regulations in Europe and in particular put pressure on Switzerland to comply, Singapore has been able to move into the void. A large number of private foreign banks exist in Singapore for this purpose and recently a casino has been opened to attract more ill-gotten money from around the region. With Malaysia and Indonesia as an economic hinterland, much trade was illegal in those respective countries and as a consequence Singapore trade figures with those countries were long suppressed. Luxury housing and shopping is indicative of the clientele flocking to the ‘city-state’. For as long as other countries impose tariffs and restrictions on trade, Singapore could act as a centre to circumvent these rules.

Corporate Singapore – Government owned – The Role of Temasek and Singapore Investment Corporation

Although Singapore is promoted as a free market economy, the Government of Singaporethrough two investment arms is involved in many sectors of the domestic economy, and has a large portfolio of international businesses. It is estimated that companies owned by the Singapore Government make up as much as 60% of the country’s GDP 8. The Singapore Government is both regulator and player in many domestic industries.

Singapore’s economic policies up until the 1970s had little focus on the role of local companies9. In 1974, the government through the Ministry of Finance created a subsidiary companyTemasek Holdings to develop local companies, particularly in sectors of strategic importance. Initially Temasek took minority stakes in a variety of local companies, and later acquired several companies like Keppel Corporation (the old British Shipyards), ST engineering, a military equipment manufacturer, and Neptune Orient Lines to secure ocean freight to and from Singapore. Temasek has major stakes in a number of Singapore’s premier companies, including Chartered Semiconductor, Singapore Telecom, Singapore Airlines, Singapore Press Holdings, MediaCorp, DBS Bank, Capitaland, Ascott Group, Singapore Petroleum Company, SMRT Corp, PSA Corp, SembCorp Industries, MobileOne, Singapore Technologies, Singapore Food Industries, and Singapore Power. Sometimes Temasek owns more than one company in a particular industry, i.e., telecoms, being effectively also the competition. All investments must be commercially viable, as the sell-off of the historical Raffles Hotel in 2005, showed there are few nostalgic tendencies in Temasek’s management decision making processes.

Temasek’s local investment has crowded out the domestic economy, so it has increasingly made investments overseas. Some companies owned by Temasek have been able to gain major market share in a number of niche industries such as transport and communications in a number of countries, as Temasek’s strategy is to create Singapore companies to compete in the world. Some of Temasek’s investments internationally include a stake in Virgin Atlantic Airlines, China’s Guangzhou Container Terminal Company, and the Belgium port operatorHesse Noord Naties NV, Bank Danamon in Indonesia, Dao Heng Bank in Hong Kong, Bank of Southeast Asia in the Philippines, PT Indosat in Indonesia, Optus Australia, LG Energy, an electricity distribution utility in Australia, LG Power in Korea, and Australand Holdings property developers in Australia.

The membership of the board of directors shows how inter-twinned Temasek Holdings is with government, the financial and business sectors in Singapore. The current executive director Ho Ching is the spouse of the current Prime Minister 10, the Chairman S. Dhanabalan is an ex-cabinet minister and DBS Bank Chairman, while other directors are involved in some of Singapore’s largest corporations. Temasek’s current portfolio is valued at USD 198 Billion, although only 30% of that is directly invested within Singapore 11.

Singapore Airlines is a good example of how the Singapore Government turned civil servants into entrepreneurs, with Lim Chin Beng as the first CEO.  From its separation from MSA in1972. The airline was run upon strictly commercial lines and not as a prestige flag carrier for the country like many other national airlines. Singapore Airlines very quickly left the airline regulation authority IATA so it could compete through providing high quality in-flight service. the iconic Singapore Girl was created by a local advertising agency Bately Ads to promote the airline’s value proposition. A large catering service SATS was developed and coordinated with the airline and Singapore airport vigorously promoted a s a hub. The Singapore Government found by refining the rules of the market and coordinating the services provided by connected enterprises, great successes could be achieved.

The same was done in the shipping industry. Neptune Orient Lines (NOL) was set up by the Singapore Government as the National line to secure ocean freight in 1968. Goh Chok Tong, Singapore’s second Prime Minster was the firm’s Managing Director in the mid 1970s overseeing the firms expansion into containerization the European trade. The firm merged with American President Lines in 1997 and was eventually listed on the Singapore Stock Exchange. Neptune Orient was synergized with the expansion of the Port of Singapore Authority and Keppel Corporation.

The Currency Act requires Singapore currency to be fully backed by foreign assets. The Singapore Government Investment Corporation (GIC), a sovereign wealth fund set up in 1981 to manage Singapore’s foreign reserves and invest these funds around the world. GIConly disclosed for the first time in 2008  information on its performance. GIC invests in equities, bonds, and money market instruments. There are two arms, GIC Special Investments which manages a portfolio of investments worldwide, including equity in some of the Asia-pacific’s premier companies. These are not easy to uncover as they are often owned through trusts and holding companies. About 25% of GIC’s investments are thought to be in the UK. It is also believed to be one of the largest investors in Citicorp Group 12. GIC Real Estate invests in some of the premier properties all around the world.

The Chairman of the board is the Prime Minister, and other directors come from the cabinet, or senior officers of Temasek Holdings. The Ministry of Finance claims that because GIC is managing Singapore’s foreign reserves any disclosure would “would make it easier for speculators to attack the Singapore dollar during periods of vulnerability” 13. As The Economist summed up about sovereign funds “The idea that secretive foreign governments are up to no good exerts a powerful hold on the collective imagination” 14. As the article continues it states the obvious, that no-matter what the motives are, a sovereign fund will eventually run into a scandal through either foolishness or corruption. The fund was reported to have over USD $330 Billion in investments in 2008 15.

It is almost impossible to know the true extent of Temasek or GIC’s international investments. For example, Temasek sometimes uses a holding company in Mauritius, ArandaInvestments to purchase assets in India, which would not appear on Indian FDI statistics as an investment from Singapore, but from Mauritius 16.

The “Local Companies”

Any cultural interpretation of Singapore’s style of development should probably be treated with some skepticism. The success of Singapore and the Chinese entrepreneurs operating within it, probably had less to do with cultural and philosophical factors, as it had to do with strategic relationships, particularly with the leader of Singapore. Those who were successful represent a very small group within Singapore’s population.

When Lee Kuan Yew became the Prime Minister of Singapore, Studwell reports that he didn’t have much time for local businessmen. Being a political organizer, Lee had little personal experience about business. The more anglicized businessmen like Lee Kong Chian and Wee Cho Yaw got on well with Lee, but with the rougher businessmen like Kwek Hong Peng, Leewas much more reserved 17. But in the interest of getting things done, he was willing to give many of them a free hand without interference.

In Singapore, the relationship between the political establishment and business is a mysterious one. Very rarely, some information comes out about how these relationships are transacted, but the family guard their reputations staunchly, suing anybody that brings these issues up for defamation 18. Reminiscent of the old colonial times, tycoons would set up foundations, i.e., The Shaw Foundation, Khoo Foundation, Yong Loo Lin Trust, and The Lee Foundation.

The pioneering entrepreneurs of Singapore after independence preferred to keep away from export orientated industries and focused on local industries like retailing, distribution, hotels,and transport, etc. They found it difficult to develop efficient and competitive organizations that could compete in global markets, because their strengths laid in the ability to understand the local situation, acquire the necessary permissions to operate, finance the projects, the finesse needed to negotiate deals, and exploit bureaucratic loopholes, etc.

Although many companies owned by the established tycoons on the island are listed on the Singapore Stock exchange, the family holding companies are not. Only selected companies in their wide portfolios are listed where a majority of shares are still directly or indirectly held tightly by the families. Its within these holding companies that transparency is very low.Company performance within these listed companies appears to be behind GDP growth rates, making them rather poor investments 19. One of the reasons some of these companies are listed is to get a valuation of the holdings so they can be used as collateral.  These Chinese family companies have tended to maintain their “little kingdoms” where shareholders know little of what is really happening within the company. Research has shown that in 3,000 publicly traded companies in Asia, families controlled at least 60% 20.

Table 1.  Major Shareholders of Some Prominent Singapore Companies

Major shareholders
CapitaLand Ltd.
Temasek Holdings 39.60%, Citibank Nominees Singapore 14.25%, DBS Nominees 9.72%, DBSN Services 6.40%, HSBC (Singapore) Nominees 5.16%, United Overseas Bank Nominees 3.21%
ComfortDelGro Ltd.
DBS Nominees 18.18%, Citibank Nominees Singapore 17.27%, Singapore Labour Foundation 12.08%, DBSN Services 11.27%, United Overseas Bank nominees 5.85%, HSBC (Singapore) Nominees 4.44%
DBS Group Holdings Ltd.
Citibank Nominees Singapore 18.67%, Maju Holdings Singapore 17.75%, DBS Nominees 14.81%, Temasek Holdings 11.76%, DBSN Services 9.72%, HSBC (Singapore) Nominees 7.06%
Hyflux Ltd
Olivia Lum Ooi Lin 31.53%, DBS Nominees 17.21%, HSBC (Singapore Nominees 7.52%, Citibank Nominees 6.99%
Keppel Corporation Ltd.
Temasek Holdings 20.74%, Citibank Nominees (Singapore) 20.06%, DBS Nominees 13.35%, DBSN Services 11.48%, HSBC (Singapore) Nominees 9.27%
Neptune Orient Lines Ltd.
Lentor Investments 39.64%, Temasek Holdings 25.98%, Citibank Nominees Singapore 4.02%
Osim International
HSBC (Singapore) Nominees 48/66%, Citibank Nominees Singapore 13.68%, DBS Nominees 5.17%
Overseas-Chinese Banking Corporation
Citibank Nominees Singapore 13.11%, Selat (Pte) Ltd., 11.45%, DBS Nominees 10.58%, DBSN Services 5.39%, HSBC (Singapore) Nominees 4.54%, Singapore Investments 3.68%, Lee Foundation 3.64%, Lee Rubber Company 3.64%
United Overseas Bank (OUB)
Cumulative Wee family 53.44%, Lien family 10.38%, Wahfamily 5.16%, (Preferrential Shares Citibank Nominees 18.73%, UUB Nominees 10.61%, HSBC (Singapore) Nominees 5.33%
PSA International
Temasek Holdings 100%
SATS Ltd. -Singapore Airport terminal Services
Temasek Holdings (through Venezio investments) 43.22%, DBS Nominees 12.20%, Citibank Nominees Singapore 9.80%, DBSN Services 4.91%, HSBC (Singapore) Nominees 3.94%
SBS Transit Ltd.
ComfortDelGro Corporration 75.21%, BNP Paribas Securities Services Singapore 4.67%, DBS Nominees 1.69%
Singapore Airlines
Temasek Holdings 56.02%, DBS Nominees 7.34%, Citibank Nominees Singapore 6.98%, HSBC (Singapore) Nominees 2.66%
Singapore Petroleum Company Ltd.
Tuan Sing Holdings 80.19%, United Overseas Bank Nominees 2.23%
Singapore Post Ltd.
Singapore telecommunications 26.15%, Citibank Nominees Singapore 15.07%, DBS Nominees 9.17%
Singapore Publishing Holdings (SPH)
Citibank Nominees Singapore 11.15%, HSBC (Singapore)Nominess 9.41%, DBS Nominees 7.01%, DBSN Services 3.09%, UOB Nominees 2.84%
Singapore Telecommunications Ltd.
Temasak Holdings 54.39%, Citibank Nominees Singapore 9.54%, DBSN Services 9.08%, DBS Nominess 8.15%, Central Provident Fund Board 5.83%, HSBC (Singapore) Nominees 4.13%
SMRT Corporation Ltd.
Temasek Holdings 54.23%, DBSN Services 4.97%, DBS Nominees 3.70%, Citibank Nominees 3.56%, HSBC (Singapore) Nominees 2.18%
StarHub Ltd.
Asia Mobile Holdings 56.76%, NTT Communications Corporation 9.99%, Citibank Nominees Singapore 7.12%, DBS Nominees 5.03%, HSBC (Singapore) Nominees 4.87%
Tiger Airways Holdings
Singapore Airlines 32.74%, Dahlia Investments 7,35%, DBSN Services 3.84%, DBS Nominees 1.23%
Venture Corporation Ltd.
DBS Nominees 21.86%, Citibank Nominees Singapore 15.84%, DBSN Services 13.72%, BNP Paribus Securities Services 11.04%, Raffles Nominess 9.05%, United Overseas Bank Nominees 5.33%, HSBC (Singapore) Nominees 4.88%
Wilmar International Ltd.
PPB Group 18.32%, Citibank Nominees Singapore 8.87%, HSBC (Singapore) Nominees 6.21% Global Cocoa Holdings 5.57%, ADM Ag Holding 5.54%, DBSN Services 5.52%, Raffles Nominees 5.37%, Archer Daniels Midland Asia-Pacific 5.24%, Kuok (Singapore) 4.01%, Harpole resources 4.0%, Morgan Stanley Asia (Singapore) Securities 4.0%, Longhin Holdings Asia #.84%, DBS Nominees 3.39%, Noblespirit Corporation 3.24%, DB Nominees 3.24%



Just because the shareholding of the local companies are being diluted of family shareholdings over time, doesn’t necessarily mean that the families are losing control of the companies. The families start-up subsidiaries and associated companies to engage in some of the most profitable activities. For example, the major shareholder of United Overseas Bank (OUB) also controls United Overseas land, United Industrial Corporation, Singapore land, with stakes inSingapore’s Plaza Park Royal, New Park Centra, and Grand Plaza Parkroyal Hotels 21. Some interests are privately owned while others are not.

Companies like Creative technologies Ltd. that had a humble start-up is still primarily controlled by the original founders, their partners and families. Approximately 40% of shares are in the hands of the public 22. Other similar companies that still appear to be controlled by their founders and families include Popular Holdings 23, Thakral Corporation 24, and Yeo HiapSeng 25.

Some companies like Breadtalk that have recently developed from a start-up are controlled by private owners (up to 50%+), where eventually companies like United Overseas Bank,Mayban and DBS Nominees may acquire up to 20-30%.  JP Morgan, HSBC, and other foreign based Nominee companies have combined shareholdings 26. Some companies in this category like Osim International are now owned through Nominee companies like HSBC and Citibank.

In terms of SMEs in Singapore, unlike many other countries, seem to play a minority role in the economy, contributing only around 20% to GDP. Although many Singaporeans intend to start-up a business, there is a low percentage of actual new businesses started, relative to other countries 27. In addition the low level of entrepreneurship participation in the Singapore economy according to the Global Entrepreneurship Monitor (GEM) survey indicates a lack of perceived opportunities to start a new business as an important reason for this low level of start-ups and participation in the economy 28. The majority of new start-ups in Singapore (68%) are in the service industry, utilizing little business innovation 29.

The Role of Government

The Government has been almost the sole driver for the development of Singapore. It has taken a ‘top down’ and authoritative approach. Everything has been planned by a small group.Singapore decision making appears to be very similar to a patriarchal Chinese family company where the founder has given all the edicts and the managers follow. This has worked well to date because the managers have shown an unusual cleverness, that has come down to some good fortune as well as other surrounding factors. And like many family owned Chinese companies the transition of patriarch has been a smooth and successful one.

How the Government and PAP search for and select “new blood” is a unique way to evolve government and has much merit in the case of a small ‘city-state’ like Singapore. Although both the PAP and Government recruit the best people to assist in the development and running of Singapore, the big mistake appears to be that those with similar and compatible views to the current government thinking are the ones spotted and recruited. This risks a”groupthink scenario” when it comes to the discussion and evaluation of policy scenarios.

Politicians and bureaucrats may be aware of the problems existing in Singapore, but have tended to place their careers ahead of these problems and modified reports and recommendations to versions that their superiors prefer to read. Subordinates have a tendency not to say things that may show their superiors to be wrong and jeopardize careers30.

The Economic Development Board is a statutory body set up by the Government to Singapore to research, plan, develop and implement national economic strategies, particularly in the area of developing investment, and nurturing talent. This is the agency where policy development is designated to take place within the Government. According to the website the Economic development Authority fulfills a major role in promoting Singapore and attracting investment 31.

In some attempt to tackle the changes going on and get the public involved in policymaking, the Remaking Singapore Committee was set up in February 2002 to complement the Economic Review Committee’s work in planning and reviewing strategies for the 21st Century. The committee was chaired by the Minister of State for National Development Dr. Vivian Balakrishnam, and comprises members ranging from government ministers, members of parliament, people from the private sector, NGOs and academics. The committee looked at five areas titled, Beyond careers – new roads to success, Beyond Condo – sense of ownership and belonging to Singapore, Beyond Club – ethnic and religious cohesion, Beyond credit card – income distribution, social safety, sports, and arts, and beyond Cars – balancing physical development needs in a small island.

Although the report aspired to remake Singapore through the people of Singapore 32, and consider ‘soft’ issues rather than matters of infrastructure the secretariat comprised predominately of civil servants. The report did make some constructive recommendations in the areas of press freedom, foreigners, and electoral reforms, but there was no consensus and until now nothing has been done about them, leading to some skepticism, as is represented in many blogs 33.

With a new initiative emerging from the Prime Minister’s National Day speech in 2012, there is a wait and see whether this new dialogue will go beyond economic issues and encompass social issues; and whether citizens will really be allowed to express their real feelings about Singapore 34.

How consultative is the PAP?

The People’s Action Party (PAP) was conceptualized out of friendships between Lee Kuan Yew,Goh Keng Swee, and Toh Chin Chye during their education in Britain. In 1954, with the help of trade unions that represented the Chinese educated majority, a left leaning nationalist partythe PAP was formed. With the help of Lim Chin Siong and Fong Swee Suan the party would appeal to the Chinese educated working class and create a broad base of support. The PAP started out as a mass mobilization party based upon a Leninist model. Much of this model is still intact within the party today 35.

The PAP is well disciplined and cohesive, with extremely powerful machinery on the ground. Leadership is very much ‘top down’ through an instituted cadre system. This has been partly kept to prevent any future hostile takeover attempts. A potential cadre must be recommended by a member of parliament, and then the candidate is interviewed a number of times by a committee appointed by the Central Executive Committee (CEC), which will include 4 to 5 ministers and members of parliament. There may be up to 1,000 cadres in the party today, however this exact number is kept a secret. A cadre has the right to attend the party conference and vote for the leadership every two years.

Political power is centered in the Central Executive Committee, headed by the Secretary-General, the head of the party, who is usually also the Prime Minister. There is a very strong overlap between CEC members and cabinet ministers. Twelve members are elected by the cadre and six are appointed.  Any outgoing CEC member must recommend a list of potential candidates to fill his/her position for the CEC. The CEC looks after the Young PAP, Women’s Wing, selects cadres, and parliamentary candidates.

Ordinary party members are screened before they can join the PAP. Potential members must demonstrate some involvement in community before memberships are approved. Lee KuanYew did not want a mass party with populist demands, and also wanted to avoid the problems of ‘quanxi’ within the party 36.  Party members are basically unpaid volunteers, serving their MPs on branch sub-committees, and help mobilize support during elections.

By international political party standards the PAP is very small, maybe 15,000 members, with a small central administrative machinery. There is a small HQ executive committee that oversees the daily administration of the party, i.e., maintaining party accounts, memberships, overseeing committees work, publications, and branch coordination.

The major ideology of the PAP is pragmatism, meritocracy, multiculturalism, andcommunitarianism 37. The PAP is pro-economic intervention through fiscal policy and government enterprise involvement, within a generally free market backdrop. The party strongly rejects the concepts of Western liberal democracy, citing a philosophy based upon ‘Asian values’ as the guiding principles of social development. Perhaps one of the greatest concerns of the PAP, reflected in the way it is structured and leadership is institutionalized, is the issue of succession, where it is believed that succession is the root of stability 38. Formal and informal rules and norms, and procedures guide who can and who cannot stand for party and public office 39.

The Impartiality of the Judicial System

The judiciary system in Singapore is regarded as being one of the fairest and impartial within the Asian region. Singapore is regularly ranked within the top countries in international surveys. One of the great strengths of the Singapore judicial system is the arbitration processes that are offered for commercial cases.

However within the city state of Singapore many judges and arbitrators, especially within the Supreme Court are closely related to the ruling party and its leaders according to the US State Department. In addition, government leaders have traditionally used the legal system, particularly through defamation actions to stifle critics and opposition 40. This has led to perceptions from some quarters that the judiciary reflects the objectives of the ruling parties in politically sensitive cases 41.

Singapore’s reputation of reliability in the arbitration of commercial disputes was also challenged back in 2007, in a dispute between the Ontario based firm Enernorth Industries and the Singapore based firm Oakwell Engineering. In documents tendered to the Ontario Province Appeals Court, lawyers for the plaintiff, Enernorth alleged that ‘Singapore is ruled by a small oligarchy who control all facets of the Singapore state, including the judiciary, which is utterly politicized’ 42 , where consequently there is no guaranteed fairness in commercial cases 43.

However the Ontario Province Appeals Court upheld the decision where Judge Gerald Day stated in his judgment that “historically, there is no evidence of bias or unfairness by the Singapore court in private commercial proceedings”. 44

The Media

The media is strongly controlled by the state, with few free to air alternatives available to citizens for independent news. MediaCorp controls all free to air television and 13 radio stations and is fully owned by Temasek Holdings. The print media is largely controlled by Singapore Press Holdings (SPH) which publishes The Straits Times, and all other daily newspapers except TODAY, which is owned by Temasek. SPH is listed on the stock exchange, but has close relationship with the government through directorships. Tjiong Yik Min, a former head of Special branch was the first chairman of SPH, S.R. Nathan, a past President of Singapore served as SPH’s executive chairman from 1982-1988, the current president of Singapore and former deputy Prime Minister Tony Tan was also a former chairman.

In 2013, the media watchdog group Reporters Without Borders ranked Singapore 149th out of 179 countries surveyed in media freedom 45. Restrictions on the freedom of expression also extend to foreign media outlets, which are sometimes restricted from distributing materials containing negative stories about Singapore or its political leadership. Such censorship has occurred with the Wall Street Journal, the New York Times, Newsweek, and others. The Financial Times has agreed to be sold partly censored, while the Economist refuses to be distributed at all. All magazines deemed pornographic are banned. Political party newspapers are basically banned through regular use of the slander laws. In the 2006 elections, the possibility for political speech and thus of effective political opposition was further restricted by new rules prohibiting political commentary through websites, blogs, and podcasts that might be considered biased toward a candidate or party, meaning an opposition candidate.

The Media Development Authority is a statutory board under the Ministry of Information, Communications and the Arts. It was set up by merging the Singapore Broadcasting Authority, the Films and Publications Department, and the Singapore Film Commission in a bid to develop a globally competitive media industry in Singapore. The basic function of this authority is to both develop and regulate media in Singapore. It also funds film and other media ventures.

However even with this vision to develop an internationally competitive media industry under the Media 21 blueprint, the regulatory teeth of this authority show through. For example, in the case of Alan Shadrake’s book “Once a Jolly Hangman” that alleged certain irregularities about the legal process in capital crimes in Singapore, the MDA didn’t ban the book, but took legal action against Shadrake. He was arrested just before the book launch and charged with contempt of court for impugning the impartiality, integrity, and independence of the court.Such action and a warning by the court on the first day of the trial that other’s from the media would be also charged with contempt of court if they reprinted any of Shadrake’s allegations. Through these types of actions the MDA has protected the courts from any outside scrutiny. Although the book was not banned, the MDA wrote a letter to all bookshops in Singapore warning them of the legal consequences of selling it. The book did not appear for sale in Singapore 46.

The National narrative – it was about survival, then it became compliance

Singapore faced a number of problems post independence. Race riots were fresh in everybody’s memories and much of the population were born outside Singapore and still didn’t see themselves as Singaporeans. Some of the very first media campaigns were to promote a sense of national identity and unity. Education curriculum and morning flag raising ceremonies and national pledge were instituted through all schools.

Initially after independence from Malaysia, the Lee Government had to maintain stability and soak up unemployment. Therefore the initial aim in developing a national narrative was to develop an obedient and docile workforce. However this docile state prevented creativity which was required for the next stage of national growth in the 1980s.

Traditionally the media has been used to play an integral role in developing community coherence and nation building. Singapore very heavily engaged in what could be best described as social engineering campaigns to achieve policy objectives 47. One of the first campaigns was the result of a concern for over population of Singapore in the future, leading to the “Stop at Two” (children) campaign. The campaign was supported by both incentives and penalties 48. This was followed by the speak good English and Mandarin campaigns(1968-1990), courtesy campaigns (1979-2001),  public health campaigns (from 1969), environment campaigns (from 1970), social campaigns (from 1970), and cleanliness campaigns (from 1968). Singapore launched more than 200 campaigns during the 1970s and 80s such as water saving, anti littering, and anti-smoking, etc.

These campaigns show the paternalistic attitude of the Singapore Government, where rules and policies has been modeled on the values of the family. Most posters and advertisements show the nuclear family. These campaigns symbolize the paternal government speaking to the citizens who are the “children of Singapore”. These campaigns can be considered condescending, espousing what people should do, and as a consequence show the power distance between the government and people who are expected to obey and comply 49.

During his Singapore National Day speech Prime Minister Lee Hsien Loong announced that its time to develop a national conversation about heart, hope, and home, under a committee chaired by the Education Minister Heng Swee Keat. This appears to be an attempt to develop new strings of narrative through engaging a generally political apathetic public 50. However when examining the structure of the committee set up, it has members of the political establishment as participants who may have difficulty grappling with new ideas and approaches to Singapore’s development.

The Role of the Singapore Armed Forces

Singapore needed to develop its own defense forces, particularly with the British withdraw in 1971. Singapore saw itself surrounded by potential hostile countries  that totally surrounded Singapore and could potentially invade Singapore very easily. The Japanese invasion of Singapore is also strongly remembered as members of the government lived through the Japanese occupation. This was very similar to the Israel scenario and the Six day War. Singapore forces needed to decisively repel any potential invaders without the luxury of being able to retreat and regroup. Singapore consequently developed a very close military relationship with Israel. As early as 1965, the Israeli forces trained assisted Singapore develop their armed forces along an integrated model specifically designed to meet potential security needs 51. A national service program where all Singapore male citizens were required to serve two and a half years in the armed services and become reservists after that was introduced in 1967. Training is conducted in friendly countries like Australia and Taiwan. Eventually air force squadrons of fighter/bomber aircraft were stationed in both Australia and the United States with strike capability through accompanying long ranger refueling aircraft 52.

The Singapore Armed Forces are seen as a guarantee of Singapore sovereignty 53. It’s also seen as a way to mould national unity 54.  The social pervasiveness of national service is reinforced through slick television advertising and the armed forces own radio station. National service has probably produced a shared consciousness and sense of identity within the social fabric of Singapore. National service also integrates the armed forces into society with the total defence concept, calling on each sector of the community to play a role in the country’sdefence. This integration goes right up to the highest levels of government, with ministers, permanent secretaries, and top executives of government linked companies being ex-SAF officers. It is within the SAF some of these people were groomed for leadership in the public arena.

However national service also seems to play a socio-political role of regulating male aggressiveness, and preventing it from turning into political attitudes regarded by the government and adverse 55. Consequently it’s a powerful tool of socialization, and through the reserve some sort of link and control over the person 56.

The government has undisputed dominance over the Singapore Armed Forces 57, and defenceis the highest expenditure item in the Singapore budget, with spending at 4.9% of GDP 58. The Singapore military is apolitical. The first leader of the armed forces was a civil servant and civil servants are regularly seconded into high positions of the SAF, often referred to as “a civil service in uniform”, obedient to the government 59.

The Banks

The local banking system in Singapore for many decades was a little diversified industry.According to Studwell, the Singapore Government stopped issuing new full bank licenses in 1973. Foreign banking activity in the local market was restricted and local banks needed permission to offer new banking products. Local Singapore banks are required to carry higher capital reserves to assets than most other countries. Thus OCBC, OUB, and DBS were constrained in their expansion. The largest local bank was the state owned Development Bank of Singapore (DBS), then Overseas Chinese Banking Corporation (OCBC), and Overseas Union Bank (OUB). The management of these banks was run by a few anglicized Chinese with reportedly close relations to Lee Kuan Yew 60.

Singapore is becoming a world centre for private banking. HSBC, Citicorp, Credit Suisse, UBS,BNP Paribas, LGT, EFG, and Merrill Lynch all operate from Singapore. Singapore has a very high number of extremely wealthy people, and many from neighboring countries use Singapore banks to hide their wealth. Private banks in Singapore deal in hedge funds, foreign currency, managed funds, commodities, equities, and even fine art. Since the pressure on EU banks to provide information to governments has increased, Singapore has moved in to fill the gap in providing confidential accounts. Singapore is being promoted as a haven for secret banking, however it remains very sensitive to discussion in the media about this 61. Unlike Europe there are no withholding taxes on interest earned by non-residents. Singapore is also developing Islamic banking to cater for the regions 500 million Muslims. HSBC, Citigroup, and BNP Paribas have all set up Islamic banking divisions. Singapore is emerging as a major international banking centre that will rival any other place in the world.

Conclusion: “Nowhere to run”

‘Cause I know
You’re no good for me
But you`ve become
A part of me’ 62

Singapore has been able to protect its strategic assets through possession and history. Foreign interests have only been able to invest in what they have been allowed. Singapore has been able to successfully develop a very unique model of a modern mercantile state.  The very factors that led to success are also the factors that are forcing change. The problem is that economic liberation is bringing pressure for social liberation. Changing demographics and aspirations are exerting pressure for change.

In addition, the economic challenge for Singapore is to prevent the economy slip into the post industrial society syndrome where economic decline may take place. The government needs to identify the next driver of the economy to maintain Singapore’s survival in the form of the present city state. The government feels that there are no alternatives to this vision and consequently patience is very short with any political opposition parties with contrary views.

Through its investment arms, Temasek Holdings and GIC, the Singapore Government has more than adequately backed the Singapore dollar with assets worth many times the value of Singapore’s currency. Singapore has also effectively through property and equity acquisition increased its wealth dramatically and influences many world markets. The Singapore Government is conquering the world, not militarily but through acquisition, thus expanding its economic space.

However this also makes Singapore very dependent upon the world economy, and the state of the economy appears to echo international cycles.

Singapore has been able so far to define the situation when particular industries decline and move on from the island state, thereby preventing community collapse. The government has managed three industry transitions. However other problems like the cost of living for Singapore nationals have emerged as one of the major issues to solve in the future. Jobs today exist for Singaporeans that didn’t exist twenty years ago, and it is hoped that the government now that scientific and technical innovations will be the source of jobs in the future.

Yet each transformation has created its own opportunities, and along with high quality education, Singaporeans have been able to rise economically over the decades – transforming from docile factory workers four decades ago to professionals today. However this evolution has been criticized as being utilitarian, at the cost of developing rich social aspects of peoples’ lifestyles. A number of recent studies have indicated that Singapore is an unhappy society with the Gallup Poll in 2012 showing the country to be the least positive nation out of 148, and least emotional country out of more than 140 countries surveyed 63.

The utilitarian psych of government has created a vacuum in contentment. Singaporeans are travelling and foreigners are bringing in new values that can’t be suppressed and have to be accommodated. Changing demographics may not allow the same to continue. The young generation will strongly influence elections in the future.

The key to the future of Singapore is innovation. Innovation means the freedom to come up with new ideas. However the vibrancy and dynamism of ideas has been compromised with the Government’s dominance of the economy and monopoly on market development. The concept of education still needs to be widened. To date, only civil servants have been the major source of new ideas, and innovation of late has been by commercial acquisition, rather than creation. This has been a major platform of control in Singapore society.

Since 1963 the Singapore Government has turned the island from a sleepy backwater into one of the world’s most vibrant economies. Although nobody can fault the ruling party which has governed Singapore for more than 50 years of abandoning its responsibilities, many wish that it would tackle these responsibilities with some heart and connect emotionally with the people.

Times are rapidly changing in the island republic. There is genuine disenchantment with rising prices, the influx of foreign workers, competition for jobs, crowded public places, rising home prices, rising cost of education, and the widening income gap in Singapore. There is even some feeling among Singaporeans with the migration of foreign professionals, they may descend to becoming second class citizens within their own country 64. Migration will be expected to continue as the local Singapore population is aging. Today it is not uncommon to see the old and infirm waiting on restaurant tables, clearing rubbish in the streets, or even scavenging into rubbish bins 65. Singapore’s GINI index has declined from 0.433 in 2000 to 0.465 in 2010 and is similar to many African and South American countries 66. According to Wilkinson and Pickett, social ills like erosion of trust, crime, obesity, teen pregnancy, mental health and drug addiction, is more closely associated with income inequality rater than low average per-capita income 67. Consequently the  electoral landscape is quickly beginning to change, where the PAP will not in the future be returned to power uncontested on nomination day due to the failure of opposition candidates to nominate for election.

The scrapping in of the PAP’s preferred candidate Tony Tan for president in 2011 showed that there is a growing proportion of the Singapore electorate that wants a change to the PAPs heavy handed style of government and more scrutiny 68. However one of the issues that may hinder any further decline in the PAP’s fortunes is that there is currently a lack of any credible opposition in Singapore as an alternative government 69.

From another paradigm, Singapore could be seen as the domination of one group over another. Most of the leadership has been drawn from the Baba Chinese community, a group cultured in Malay and “Colonial British” 70. Babas strongly hold family values, community cohesiveness, and tend to respect authority. This is in contrast to the Southern mainland Chinese migrants to Singapore who fled oppression, and tended to oppose authority.  Singapore has been run more in the manner like a British Colonial administrator would have aspired. Thus patriarchal leadership with neo-Victorian values is not something the migrating Chinese accepted openly 71. Singapore has seen many campaigns, incentives, and deterrents to achieve the values of the Baba class 72.

One of the major legacies of Lee Kuan Yew was the authoritarian style of leadership  and the fear it invoked into the Singaporean psych. For decades Singaporeans were expected to fall in line with what leaders expected without question, as they were told that this was best for them. The bounds of what couldn’t be done were clearly set, i.e., not to criticize leaders, not to discuss ‘sensitive’ issues, or not to give alternative opinions. If these boundary crossings were noticed, harsh penalties would be applied to those that crossed them 73. The strong control of Lee Kuan Yew was the dominant driver of society, and the state itself also had the responsibility of being the ‘agent of change’. This to some degree squeezed out small private businesses as an alternative engine to growth of the Singapore economy. This persona of authority and control still exists today.

Singapore Government ministers appear to be disconnected with the people who elected them. They have become so concerned about running Singapore from an elite bureaucracy, trusted to make the best decisions for the country to protect and improve the livelihoods of its citizens. However as they live in some of the choicest real estate in Singapore and have rewarded themselves with some of the highest salaries in the world, they have have become out of touch with the struggles and plight of the common people of Singapore.

For Singapore to prosper in the long term. And for Singapore to maintain the unique system of government that has evolved, with all the good, and perhaps less of the bad and ugly, the PAP needs to re-evaluate itself for the future and decide whether it is a broad based political party, or just the extension of one man and an elite group that has ruled over Singapore for the last 50 years?

Under the present structure of the PAP, it will be impossible for the party to reform itself from the grassroots and allow new ideas to reach the top. The ability of people to rise through the ranks of the party with new ideas is heavily restricted. The Lim Chin Siong legacy saw to that. The very way the PAP has sought both meritocracy and stability has become its ‘Achilles heel’, paralyzing the ability to adapt to changing Singapore 74, where ironically the country has been so successful in adapting to outside factors of change while being so internally rigid. The cadre system itself prevents change, as the selection process is a closed system selecting only same minded people to the leadership 75, subjecting government to the risks of groupthink. The challenge of change brings uncertainty and with this comes insecurity about the continuation of a successful paradigm of government that has served Singapore so well in the past.

Lee Kuan Yew had dominated Singaporean politics, economy, and society since the 1950s.The family has influenced affairs in Singapore for over 50 years, much longer than any other political family in the region. His eldest son, Lee Hsien Loong became Prime Minister in 2004. Lee Hsien Loong’s wife Ho Ching is CEO of Temasek Holdings. Lee Kuan Yew’s youngest son Lee Hsien Yang is the head of Singapore Telecom. The Lees have achieved their positions on merit and are genuinely an exceptionally talented family. Officially, the reason given for this is by former Prime Minister Goh Chok Tong is the small talent pool in Singapore 76.

Both the political and business sectors appear incestuous in Singapore, but due to the ‘city-state’ nature of the country, there appears to be little in the way of any solution to this. When the opportunities rose under Goh Chok Tong’s Premiership in the mid 1990s, no moves were made to check the power  of the Lee family 77. There is no doubt that the Lee’s legacy is embedded in Singapore and its influence will last decades. Just how and when this influence will begin to dissipate remains to be seen.

Is there truth to the old Chinese proverb that “in three generations, a family or dynasty will have run its course?”


Prof. Murray Hunter is one of the frequent contributors for The 4th Media.



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