New York Times: The Opulence of Singapore

December 16, 1984

THE OPULENCE OF SINGAPORE

Barbara Crossette is chief of The New York Times’s bureau in Bangkok. By Barbara Crossette YOU KNOW,” SAYS FRAN cis Siah Ooi Choe, smiling, ”we still get Americans over here thinking we live under mosquito nets and ill-treat the workers.” At his new plant in Singapore’s Kallang Bahru industrial complex, Mr. Siah controls what has become a multimillion-dollar empire built on plastic bags. On the rooftop of the plant are a swimming pool, squash courts, sauna, massage rooms, game rooms, bar and cafeteria – all at the disposal of Mr. Siah’s factory workers.Independent Singapore and Mr. Siah got started in business in the same year, 1965. They have grown in tandem, and Francis Siah is a dynamic example of what has enabled an island state to make the leap from underdevelopment to high tech in less than 20 years.

In Singapore, Mr. Siah’s story is not unusual. At 37 years of age, he is a member of the energetic and creative new generation that gave impetus to Singapore’s boom and then rode that boom to the heights of personal achievement and wealth.

Although such phenomenal economic growth and wealth tend to stop at the top in many developing nations, in Singapore the prosperity is widely shared. Prime Minister Lee Kuan Yew, who has been running Singapore for the last 25 years, has made it a matter of policy to use newly generated income to raise the living standards of all the 2.5 million people of Singapore.

Today, a Singaporean’s per capita share of the gross national product is more than $6,500 a year, Asia’s highest standard of living after Japan. Many Singaporeans enjoy a style of life that rivals the West’s. A young high- school graduate with minimal skills can expect a wage of about $250 a month in his or her first job. College graduates can start with salaries of $600 to $700 a month.

Even critics of Mr. Lee’s methods – virtual one-party rule with no public debate on issues, coupled with an effective suppression of dissent and a tame press – acknowledge his success. Few Singaporeans expect a serious challenge to the dominance of Mr. Lee’s

People’s Action Party when the country votes in a national election next Saturday. Hinting that the coming term in office may be his last one, Mr. Lee, who is 61 years old, has portrayed the vote as a referendum on a quarter-century of progress. He calls it ”25 years of nation building.”

Scholars and political commentators say, however, that Mr. Lee’s success in building a workable, well-managed state may have within it the seeds of its own destruction. The domination of the social and political life of the country by Mr. Lee and his party has left a legacy of political stagnation. HOW WEALTH IS generated here is pure right-wing capitalism – Reaganomics – with a fair dose of state enterprise,” says William Lim, a Harvard-educated town planner who runs an architecture firm. ”But on the other hand, once the Government has got the money, they don’t plow it back into the elite. Our income distribution is much more democratic.”

For an entrepreneur like Francis Siah, this pragmatic, two-pronged economic policy has been a major factor in his success. At every stage of his growth from a small-time marketer of other people’s plastic products to the presidency of Lamipak Industries Private Ltd., he got a sympathetic hearing and quick action from the Government bureaucracy, he says. He was given Government research grants and assistance in opening factories in Government-built industrial parks, where services were always good.

”One of the unique features of this place,” says Mr. Siah, leaning back in his imposing executive chair in an otherwise small and spartan glass- walled office, ”is that help from the Government comes not in strictly monetary terms, but in moral support and infrastructure. You move into a factory and the electricity gets turned on the next day. The roads are good. You can rest assured that you will get a vessel to deliver your product abroad. The shipping document will be ready in two or three days.”

Mr. Siah has no problem with the Government’s open- door policy toward foreign firms, which are welcomed to Singapore with a host of incentives – from the promise of industrial sites to the benefits of a quota-free trade system and a duty-free port. ”The competition from foreign firms makes local industries like us upgrade ourselves continually,” adds Mr. Siah. ”It is our only hope of survival.”

At Lamipak, the research to stay ahead never stops. Mr. Siah is the inventor of a monolayer, high-molecular, high-density polyethylene bag – in layman’s terms a very thin plastic bag with the rustle of fine paper. He and his scientists are now working on machinery to produce a product that is stronger and uses less raw material.

Lamipak has three factories in Singapore making a range of plastic packaging materials and all the machinery for production, most of it invented by Mr. Siah. His expertise has been sought in setting up plants throughout Southeast Asia. He is now installing one plant in China and another in the Irish Republic.

Mr. Siah’s raw material, incidentally, comes from Singapore’s petrochemical industries; refined petroleum products are the country’s largest export item. At the same time, the Government’s expenditure on public services, housing and education has provided businesses like Mr. Siah’s with a healthy, well- trained work force. This situation is markedly different, he says, from the one that prevailed when he opened his first factory in 1970.

”We were in a difficult position then,” he remembers, ”because most of the people we recruited didn’t have experience in industry.” Skill levels have advanced rapidly. ”Now,” he says, ”my 4-year-old son can operate an Apple computer.”

In many ways, Francis Siah is a link between the old and new Singapore. Unlike many of his contemporaries who studied in European and American universities, Mr. Siah, the son of Chinese immigrants, did not have a college education. After finishing a secondary-school course and not yet 20 years old, he struck out on his own. He was able, however, to reap some benefits from the postwar development of the island. The education he had received, which was free, gave him fluency in English and a grasp of basic engineering and technology.

By contrast, Soon Peng Yam, the 71-year-old chairman of the Sim Lim group of companies, a huge network of property development and investment concerns, recalled in reminiscences he recently recorded for the Singaporean national archives oral-history project that his education ended at 14 and his first job, in a general store, paid $1 for 50 days of work. Many of the older generation of Singaporean entrepreneurs arrived penniless in the 1920’s or 30’s, becoming millionaires in industry and banking during the economic vacuum that followed the Japanese departure from the island after the war.

Mr. Siah believes that while his generation is a little more secure in its accomplishment and wealth – and the generation after his much more relaxed, even profligate in its affluence – the contemporaries of Mr. Soon have never been able to lose their instinctive fear of poverty and their obsession for work.

Tan Kok Kheng, son of the late Tan Kah Kee, a rubber tycoon, recently told interviewers from the oral-history project that his father never went to a restaurant, never took a vacation and decided not to leave any of his immense fortune to his children because ”wealth stifles ambition in the wise and increases the folly of the simple.”

”It’s our crazy Confucian work ethic,” explains Mr. Lim, the architect. ”You don’t need to make the Chinese work. They’ll work anyway.” Mr. Siah notes that among executives of his generation it is still common to work 14-hour days. ”And Sundays, of course,” he adds. WHEN SIR STAMford Raffles arrived in 1819 to make the strategic island of Singapore a base for the British East India Company, a few Chinese were already in residence. They have been migrating to Singapore ever since.

Today, the Chinese are the predominant ethnic group on the island, which – separated by a causeway from the extremity of the Malay Peninsula – is a little bigger than Barbados but smaller than New York City. Chinese Singaporeans (Hokkien, Teochew, Cantonese, Hainanese and Hakka) form three- quarters of the country’s population. A sizable Moslem Malay minority of nearly 15 percent and another 6 percent of people from the Indian subcontinent have given Singapore ethnic, religious and cultural links that stretch west across Asia to the Middle East.

Mandarin, Malay and Tamil are national languages, along with English, the country’s working language. Other minorities also figure in national life. David Marshall, the colony’s first Chief Minister (in 1955) and now the country’s Ambassador to France, is a descendant of Sephardic Jews from Iran and Iraq.

Add to this mix years of exposure to Western influences and education and, Singaporeans say, one is on the way to answering the popular question: What is a Singaporean?

Around Asia, Singaporeans are known for their corruption-free, law-abiding, efficient, fanatically clean, often conformist and unquestioning society. When The Straits Times asked people around the country recently what made Singapore unique, Fong Hoe Fang, the 30-year-old editor of the magazine Breakthrough, said: ”The people’s unstinting obedience to authority.”

According to Pang Eng Fong, an economist at Singapore’s National University who studied at the Universities of Illinois and Michigan, the younger Chinese Singaporeans are marked by a certain amount of ”detribalization.”

”Sometimes it is easier to say what we aren’t than what we are,” he says. ”But there is some agreement that there is such a thing as a Singaporean. We are impatient. We have a confidence that amounts to arrogance. We are a future-oriented society, ready to take hard knocks.

”Singapore is very clear in its own mind where its orientation is. It is to the West. But at the same time, it wants to distance itself from the softness of Western society.”

Singaporeans have been going to American universities in increasing numbers, particularly since 1980, when Britain raised college fees for Commonwealth students. Intellectuals welcome this trend, saying it will continue to furnish Singapore with new ideas.

For people like William Lim, who are at times critical of Singapore’s controlled political system, the link with the West is important to the future development of Singaporean society. Singaporeans, he says, need to know how Westerners go about effectively organizing on issues of importance to society: ”Younger people will have to learn to identify the good things coming up in Western society.”

At the same time, Singapore has been watching with interest the rapid changes in China, a natural market for new generations of Singaporeans with expertise and skills. Several Singapore companies are exploring property-development deals with Peking. Francis Siah has already contracted to set up three plastics-packaging companies in China next year. ”We sold them everything down to the screws,” he says. IT IS LUNCHTIME AT

the Key West Cafe on

fashionable Orchard Road. In the stark white and bright red high-tech decor, extravagantly dressed men and women are eating healthful salads and drinking white wine. The Key West is not on a quiet side street but in a busy, new, multistory shopping mall called the Promenade.

Everything, it seems, now revolves around malls of glass and brass. ”In” restaurants are there, along with the camera shops and designer boutiques and medical clinics. Writing in the Singapore newspaper Business Times, Monica Gwee described the country as ”a giant department store surrounded by water.”

”Have you noticed how we Singaporeans when we go out to eat always go to hotels or shopping centers?” asks Marjorie Chu, who recently moved her gallery, Art Forum, to the Promenade. It was a decision Mrs. Chu, an accountant before she entered the art world, made carefully. Overriding an esthetic urge to open a gallery in an old waterfront warehouse, she opted, she says, ”to go along with the pattern of Singaporeans.”

”You look at the old food centers,” she adds, referring to the groups of street food stalls that are well known in Asia. ”Even they are gradually being housed in multistory buildings.”

For Mrs. Chu and the artists she promotes, Singapore’s transformation from a nation of small houses or screened bungalows with ceiling fans to a prosperous country of air-conditioned flats and condominiums has had an immediate positive effect. ”The old colonial bungalows had no walls,” she explains. ”Modern homes are just full of walls. For selling art, the new architecture helps.” But architecture is only part of the story.

”For buying art, there must be some basic ingredients,” says Mrs. Chu. ”One is, you must have the leisure time to enjoy art. To have the leisure, of course, means you have attained a certain degree of security in your life style. It is a reflection of the overall political and economic environment. In Singapore, this has come with home ownership.”

Home, to many, is public housing. Nearly 80 percent of Singaporeans – including a number of middle-class professionals and executives – live in Government-built housing; 68 percent of them own their apartments.

According to Mr. Lim, the architect and planner, Singapore’s public housing is superior in size, amenities and price to that in parts of Europe. It is possible for a worker to buy a two-bedroom apartment for $15,000 to $20,000, and a large three- bedroom version for under $50,000. For the growing professional class, the Government is building executive housing. Top executives are buying spacious new private condominiums or town houses at prices upward of $250,000.

Many newly affluent Singaporeans have, as one of their number put it, ”bought the whole package” of glossy- magazine living. They adopt fashionable hobbies, join fitness programs, learn to cook, develop an interest in art and music, and make a cult of caring for their own children in a society in which servants are scarce. They are avid supporters of publications devoted to clothes and interior decoration.

The acquiring of art for interior decoration, public enjoyment or professional status, says Mrs. Chu, is a radical departure for Singaporean society. ”The Chinese traditionally collected painting in scrolls,” she says. ”They are very private about those collections; they don’t display them for everybody to look at. They show their collections among close friends. The buyers of art are now Singaporeans, not Chinese. Our exposure, our background, our upbringing is changing quite a lot. This younger generation is perhaps not so different now from other affluent societies.” THE ECONOMIC SUCcess story of Singapore is largely the story of one very secretive and controversial man: Lee Kuan Yew.

Mr. Lee was a young Cambridge-educated lawyer imbued with the Fabian Socialism of Britain when he returned to Singapore in the 1950’s – just as the island was approaching independence – to forge his People’s Action Party from a coalition of leftists. He became Singapore’s first Prime Minister in 1959, the year the colony got internal self-government and its first fully elected legislature. Through the next four years of limited self-rule, a two-year federation with Malaysia and full independence since 1965, Mr. Lee and his party have dominated Singaporean politics.

A tough, determined and blunt man who sets a personal standard of modest living and total privacy, Mr. Lee, by most accounts, has been ruthless with his political rivals but personally incorruptible in his wielding of political power. Over the years, he has tried to do nothing less than build a new society for Singapore.

Early Lee administrations, drifting away from many of their erstwhile leftist colleagues but still calling themselves socialists, began to concentrate first on improving the quality of life.

Along the way, the Government became a gatherer of demographic and social statistics. There is almost no way a Singaporean has not been measured, quantified or classified. The largely pliant and careful press helps out by printing little tables of facts that no one might have thought to ask about: How many children are being given ”Christian” first names, for example, or how much cash in hand there is in the average Singaporean home.

Today, housing developments rise above lush park land along well-maintained roads. Pollution is controlled, the water is pure, the trash is collected daily and most neighborhoods have little crime.

The city of Singapore, according to Mr. Lim, the architect, is among the world’s best-run urban areas. ”Most cities are bankrupt or subsidized,” he said. ”Singapore is neither. The city is managed at such a sophisticated level that it is even generating money for the Government. All the public services make money.”

Over the years, Mr. Lee made it clear that free-enterprise capitalism would be encouraged and supported as the fastest road to development. Thus, while stealing ground from the left on social policies, Mr. Lee has become progressively more anti-Communist, pro-multinational and pro-Western on the basis, he has said, of empirical evidence.

A scrappy defender of his anti-ideological approach, he has become a perennial thorn in the side of the nonaligned movement, in which Singapore remains active ”to keep the Soviets from railroading the whole thing,” in the words of a Foreign Ministry official. In 1976, the People’s Action Party resigned from the Socialist International just as the party was about to be expelled for holding but failing to bring to trial several people accused of Communist subversion.

In his effort to produce what Mr. Lee calls ”social glue” for Singapore, incipient nationalistic movements in any of the country’s major ethnic groups – the majority Chinese as well as Malays or Indians – have been quickly suppressed. Housing complexes are deliberately mixed ethnically (an unwritten policy that housing officials admit to only privately) to prevent potentially seditious ”ghettos” from forming.

Nanyang University, the premier Chinese educational institution in Southeast Asia, which was thought by Mr. Lee to be a center of ethnic Chinese dissent as the society became more Western and English-speaking, was closed. It is being transformed into a technological institute associated with the National University of Singapore.

Journalists and newspapers have been prosecuted under the Internal Security Act on charges of fostering division or having pro-Communist views. Books and movies are censored.

Mr. Lee continually contrasts Singapore’s peaceful multicultural society with the disruptive intercommunity fighting that has erupted periodically in other countries of South and Southeast Asia. Singaporeans need look only as far as neighboring Malaysia or Indonesia – with their past Chinese-based leftist insurgencies or their present problems with Islamic fundamentalism – to find some reasons to accept the Government’s analysis.

Last year, the Prime Minister, in his unabashed pursuit of a new society, began to dabble in what sounded to many like human engineering. While actively discouraging the less schooled to have more than one child, he offered monetary and educational incentives to university-educated women to have more children.

In the ensuing furor, a number of university-educated women said they had no intention of becoming ”baby machines.” Some critics pointed out that the new policies flew in the face of Singapore’s own immigrant history – poor and often uneducated people produced Mr. Lee’s own generation. In neighboring Malaysia, a book titled ”Designer Genes,” which consisted of essays collected by the Malaysian Institute for Social Analysis, attacked the idea of educational inbreeding on scientific grounds.

Undaunted, Mr. Lee continues to exhort Singaporean men to choose wives for their educational qualifications. Last month, in a prerecorded television interview devoted to his party’s 25 years in power, Mr. Lee – who seldom appears in anything but controlled sessions with the press – told the men in his audience that choosing large healthy wives ”with big hips” was behavior relevant only to an agricultural society.

”What is it you want in your next generation?” he asked, adding that to marry a poorly educated partner would lead only to a future of ”rummaging around looking for tutors, looking for some obscure college which will take your son because he can’t get into the university.” ALTHOUGH MR. LEE’S SOcial-engineering theories have attracted the most public attention recently, critics say that the country’s political stagnation should cause more concern.

In the quarter-century of domination by the People’s Action Party, Singapore has been a model of stability and progress for the third world. But Lee Kuan Yew has achieved this not by building institutions of government, but by building a bureaucracy that has taken over, however efficiently, the day-to-day running of the state beyond the control of Singapore’s people. The result is neither a democratic nor an authoritarian state, but rather an administrative state run by trusted managers.

In such a state, wrote Dr. Chan Heng Chee – an associate professor of political science at Singapore’s National University and one of the country’s most highly regarded political historians – in a 1979 university paper, ”economic development took precedence over political development.” She continued: ”The culture of political bargaining and political struggle was rapidly replaced by a petitionary culture. Political authority is seen today as paternalistic, to be approached respectfully and which will react to demands benevolently, in wisdom and justice, where the national interest is not compromised.”

According to Professor Chan, because legislative candidates and political leaders themselves have been hand-selected by the all-powerful party from the technocracy rather than through a more competitive and open electoral process, there is an ”obvious lack of perception and sensitivity toward politics, political communication and links with the grassroots.”

She added: ”Such men by the nature of the experience would be a poor match for a Communist opposition.”

Always quick to locate and neutralize criticism – a major component of their political longevity – Mr. Lee and the People’s Action Party have shown during the current campaign for the 79 seats in the legislature that they are aware there has been no natural growth of a new political generation.

Elderly politicians have been asked to step aside in the coming general election so that younger people, drawn from private life, could be brought in to run as candidates for the legislature. The People’s Action Party is even attempting to recruit candidates who have been critical of the Government. Interestingly, one of the party’s candidates is Lee Kuan Yew’s son, Lee Hsien Loong, who resigned from his position as brigadier general (second in command of the armed forces) to run for a parliamentary seat. His political debut has given rise to talk of nepotism and of a dynastic succession, as is the case in India and North Korea.

Lee Hsien Loong, who is 32 years old, was elevated from colonel to brigadier general only last summer. Educated at Cambridge and Harvard (where he got his M.B.A.), he is the elder of the Prime Minister’s two sons. The younger son, Lee Hsien Yang, is in the navy. The Prime Minister and his wife, Lee Geok Choo, who was educated at Cambridge and is a practicing lawyer, also have one daughter, Lee Wei Ling, who is a doctor.

Mr. Lee has become preoccupied with lecturing the young on what is expected of them if his legacy is to survive. Words such as ”rugged,” ”moral” and ”filial” are common coinage. Singaporeans, young and old, who visited a recent national exhibition on ”25 Years of Nation Building” saw and heard reminder after reminder of the country’s tough past. This, says Professor Chan, is a manifestation of the ”Long March” mentality of the People’s Action Party, an approach with little relevance to the affluent young.

In a recent guest column in The Sunday Monitor, Ong Wee Hock, a management consultant and former member of the country’s Economic Development Board, wrote: ”In the last few years, Singapore has become a vast lecture theater, as arid and dry as those in the universities. . . . If a straw poll conducted among my friends is any indication, the conclusion is that there is an increasing deafness in the people to these lectures, which have replaced leadership.”

Lectures and slick advertising, which the Government uses increasingly to promote its policies, Mr. Ong continued, ”typify a maintenance function, improving society through regular repairs and incremental improvements.” Where, he asked, is ”the vision that will galvanize Singaporeans” over the next 25 years? BUSY MAKING MONEY AND having fun, many of the young boom-time Singaporeans say they have no time or taste for politics, even though it is from the new professional and technocratic class that future generations of leaders will have to come.

It is hard to get Singaporeans worked up over the shortcomings of their Government, local political scientists and taxi drivers alike will tell you, when everyone has a job, a home, enough food, clean air and water, flower-bedecked expressways and a guaranteed retirement income.

The opposition – there is only one opposition member in Parliament, J. B. Jeyaretnam, of the left-of-center Workers’ Party – will have to wait until income gaps widen and pockets of what a Singapore National University scholar has called ”hidden poverty” (those who remain unskilled as the country becomes more technological) begin to grow.

Life in Singapore is expensive, and getting more so each year. Overbuilding is already taking its toll: Some shopping centers are looking for renters and hotels are scrambling for guests. But for the moment, as confidence rides high, problems are better left to another day.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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