Voodoonomics: How successive governments impoverished Malaysians

March 15, 2018

Voodoonomics: How successive governments impoverished Malaysians

by P. Gunasegaran@www.malaysiakini.com

A QUESTION OF BUSINESS | At least two ways – both very wrong in the longer term – were used to support the export sector in Malaysia in believing that growth through exports was the right thing for a developing country like Malaysia.

Even though there was economic growth, which means more wealth was created, there was impoverishment too. But how could that be? Basically, those who were rich got richer and those who were poor got poorer.

How did the government achieve export competitiveness over the years? Through two measures. First, they reduced the number of things Malaysians generally could buy by opting for a policy which weakened the ringgit. And two, they imported poverty by allowing the uncontrolled import of cheap labour.

Both improved Malaysia’s competitiveness not by raising productivity, although there was some of that, but by cutting down the cost of labour through the import of cheap labour (imported poverty) and lowering the relative value of the currency or currency depreciation, effectively lowering costs in US dollars.

Let’s look at these measures in turn.

1. Currency Depreciation

The ringgit fell in value from around as strong as around RM2.2 to the US dollar in 1980 to around RM4.0 now. The US dollar appreciated by over 80% during the period and the ringgit lost over four-tenths of its value relative to the US dollar.

Consider what that does: if an imported food item cost US$1, it was RM2.2 in 1980. But it rises to RM4 now, an increase of some 82%. But consider it now from the exporter’s perspective: If he sells something for US$1 overseas now, he gets RM4 versus RM2.2 then, again 82% more.

Unless he shares this benefit equitably with the worker – and in practice, he does not – a depreciated currency is a subsidy to exporters and a tax on workers because everyone depends on imported goods and even services for a good part of what they consume. Think in terms of food, clothing and buying from foreign chains.

While a depreciated currency improves the appearance of export figures in ringgit terms, it is still not a long-term solution for the betterment of people because it directly impoverishes a major part of the public by reducing their purchasing power – the amount they can buy with the ringgit.

2. Importing poverty through cheap foreign labour

The next major stupid move successive governments did was to import cheap labour from overseas. Until today, this is largely from Indonesia, Philippines, Bangladesh and India.

In the 1980s, this happened in the plantations affecting mainly Indian Malaysians who were displaced from the estates due to cheap Indonesian legal and illegal labour. Soon, this imported cheap labour spread into all areas, heavily depressing labour wages, affecting all Malaysian labour including Malays.

Was wealth ever created?

How terribly short-sighted! While developed countries were importing skilled and white-collar workers from developing countries, Malaysia, still very much a developing country then (and still is despite what others say), was importing cheap labour from other countries, depressing wages of a large section – probably as much as 50% – of its own workforce.

What kind of a madness was this that at the same time inhibited improved productivity by opening the tap to cheap labour and delayed the invention and adoption of new processes to reduce labour input while improving productivity per person through training and automation?

Till this day, when employers complain of labour shortage, it irritates one to see imported labour at car parks, for instance, being used to hand out parking tickets even after the process has been automated at the entry points.

Drive further in and you see others directing traffic and blowing loudly on whistles. The price of labour is so cheap that imported labour is used for such menial tasks. Are Malaysians so illiterate that they can’t read and follow signs?

As if the whole situation is not ridiculous enough, government officials and ministers regularly regurgitate garbage by saying that labour imports are necessary because Malaysians do not want to do these jobs. Pay them enough and Malaysians will do the job. Perhaps the ministers should send their daughters and sons to do this kind of work for a pittance.

And as many millions of workers are imported, a thriving business sanctioned by the government sprouts up living off the blood and sweat of workers and exploiting employers by making both parties pay ridiculous amounts for legal import, driving them towards employing illegal workers.

One may ask, what then is the alternative? If you want a broad section of the public to get richer and more affluent, the only way is to create wealth for everyone.

Image result for Productivity Matters

That means improving the overall productivity or output per person so that he or she deserves a higher wage. Not by creating wealth for some and impoverishing most via currency depreciation and depressing wages.

Ah, yes but how do you do that? There is only the hard way. First, improve the quality of education for all and focus on the right kind of education which will make people employable.

Next promote the kind of industries which will increase the dollar value of output per person and ensure that productivity gains drive wealth creation, not cost-cutting.

Third, ensure that as much as possible of the resources go towards improving educational opportunities and building the necessary infrastructure for continuing productivity improvements with as little leakage as possible.

How much of this has been done since independence? Little.

The frightening part

According to Khazanah Research Institute’s (KRI) ‘State of Household Report’ dated November 2014 and Employees Provident Fund (EPF) data on individual incomes which includes salary or wages, overtime payments and bonus in 2013:

  • 96 percent of active EPF members earned less than RM6,000 a month
  • 85 percent less than RM4,000
  • 62 percent less than RM2,000

That’s a telling figure – 62 percent of workers earn less than RM2,000 a month. How can many of them live comfortably with such an income, especially when they have children to support?

Meantime, the median monthly salaries and wages per month for individuals was RM1,700 in 2013 (see chart below). That means half of all workers get this much or less, KRI explains.

And what does an illegal Indonesian worker earn in a month these days? In March, there are 27 working days including Saturdays on which they typically work as well. Industry employers say Indonesian illegal workers cost RM70 a day, casual, that means not contracted. Multiply that figure by 27, we get RM1,890 for the month of March.

Now, the frightening part is that this is more than the RM1,700 median salary for Malaysia which means that 50% of Malaysians earn less than casual Indonesian workers!

Clearly, the majority of the country lives in poverty. Income gains for the wage-earner have not gone up enough. And for a country like Malaysia with abundant resources and which once had the highest income in Asia after Japan, that reflects a failure of government.

If one needs an example of successful economic development, you just need to look across the Causeway which started pretty much from where Malaysia did and look where it is now with the adoption of the right policy mix coupled with an incorruptible government.

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The currency–the Singapore Dollar– is now valued at three times Malaysia’s against about parity in 1980 and its per capita income is among the highest in the world.

We are not saying that Singapore is the perfect state but in terms of economic development, they have beaten us by far and continue to do so.

P GUNASEGARAM still hopes that sometime in the future (perhaps soon?) there will be a government not only of the people but for the people. E-mail him at t.p.guna@gmail.com

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

Singapore sounds an optimistic note but eyes tough year ahead as ASEAN chair

February 24, 2018


Image result for ASEAN Foreign Ministers Meeting February 6, 2018

Singapore sounds an optimistic note but eyes tough year ahead as ASEAN chair

by Lynn Kuok


Whether Singapore will be able to successfully navigate the challenging year ahead is still uncertain. Much will depend on sustained U.S. attention to the region on the security, economic, and diplomatic fronts. It will also depend on Singapore’s ability to persuade member states to work together to maintain ASEAN’s relevance and centrality. The work has already begun with ASEAN states reiterating the importance of maintaining ASEAN centrality and unity at the foreign ministers’ meeting. At stake will be the ability of ASEAN to chart its own course and the very character of the region itself. ASEAN and member states must decide whether a region governed by right, not might, is worth defending.–Lynn Kuok

The Foreign Ministers of the Association of Southeast Asian Nations (ASEAN) recently met in Singapore from February 4 to 6. It was the first meeting of regional foreign ministers since Singapore took over ASEAN’s rotating chairmanship from the Philippines earlier this year. The foreign ministers’ retreat is regarded as a “curtain raiser” to the ASEAN summit, which will take place in April.

The gathering was an opportunity for ASEAN to collectively chart a direction in line with Singapore’s themes of “resilience” to strengthen ASEAN member states’ ability to withstand crisis, and “innovation” to increase regional integration and connectivity in such areas as digital technologies. It also facilitated an exchange of views on regional and international headwinds, which might derail ASEAN’s agenda in the year ahead. Singaporean Foreign Minister Vivian Balakrishnan expressed optimism about ASEAN’s future, but was clear-eyed about the challenges that lay before the grouping.

The city-state is well-placed to make progress on promoting the region’s digital economy. However, while Singapore is known to punch above its weight economically and diplomatically, old and new challenges should temper expectations in the year ahead.

The economy matters

An important priority for ASEAN will be continued economic progress, not least because this has real implications for the well-being of its 630 million people. Many of the region’s working poor remain vulnerable to backsliding, although important strides have been made in addressing extreme poverty.

Better living conditions will likely improve local support for further ASEAN integration and projects. Brexit has shown the dangers of the lack of public support for supra-national organizations—ASEAN must take heed. Increased prosperity will also boost the grouping’s geostrategic heft.

To this end, Singapore aims to establish an ASEAN smart cities network to leverage technological solutions to improve the lives of the people within ASEAN countries. It also seeks to boost economic integration and improve regional trade facilitation, especially in e-commerce. If all ASEAN member states are to benefit from such growth, Singapore will also have to put in place initiatives to bridge the digital divide in the region.

Navigating between competing great powers

In achieving its goals, ASEAN faces external and internal challenges, including a more assertive China. Beijing is simultaneously clenching its fist in the South China Sea and offering an open hand with the prospect of a Sinocentric economic network that could provide vast benefits to ASEAN countries in areas such as infrastructure development, even if concerns are mounting about what this means for Beijing’s broader influence in the region.

As China expands its footprint in Asia, the United States, which for decades brought strategic stability to the region, appears to be distracted at home and schizophrenic abroad. U.S. President Donald Trump and his advisers appear to have belatedly come to the realization that “America First” cannot mean “America Alone,” and multilateralism and a strong international network of allies and partners actually promote an “America First” agenda. But Trump has failed to follow through on the need to seek mutually beneficial policies, including on trade and climate change.

His decision to pull out of the Trans-Pacific Partnership (TPP) trade deal and the Paris climate change agreement has sent the unfortunate message that the United States is disengaging from Asia and the world. At Davos last month, Trump suggested a willingness to rejoin the TPP if the United States was able to strike a “substantially better” agreement. But there appears little appetite among the remaining 11 TPP countries to reopen negotiations.

Image result for bilahari kausikanSingapore’s Ambassador-at-Large Bilahari Kausikan


Washington mainly views Southeast Asia through the lens of North Korea, which is not ideal since the issue puts the United States at odds with ASEAN. The grouping is reluctant to expel North Korea from the ASEAN Regional Forum since it does not want to be seen as parroting the U.S. line. Singapore needs to suggest ways in which the United States can meaningfully engage with the region and encourage this by highlighting what ASEAN brings to the table. This includes demonstrating, in the words of Singapore’s Ambassador-at-Large Bilahari Kausikan, “the utility of ASEAN-led multilateral diplomacy.”

ASEAN must also decide how to respond to the Trump administration’s push for an “Indo-Pacific” strategy that has raised Beijing’s suspicions about being encircled by U.S. allies. ASEAN might try to resurrect a 2013 Indonesian initiative to promote an “Indo-Pacific wide treaty of friendship and cooperation” to reduce China’s concerns.

Washington mainly views Southeast Asia through the lens of North Korea, which is not ideal since the issue puts the United States at odds with ASEAN. The grouping is reluctant to expel North Korea from the ASEAN Regional Forum since it does not want to be seen as parroting the U.S. line. Singapore needs to suggest ways in which the United States can meaningfully engage with the region and encourage this by highlighting what ASEAN brings to the table. This includes demonstrating, in the words of Singapore’s Ambassador-at-Large Bilahari Kausikan, “the utility of ASEAN-led multilateral diplomacy.”

ASEAN must also decide how to respond to the Trump administration’s push for an “Indo-Pacific” strategy that has raised Beijing’s suspicions about being encircled by U.S. allies. ASEAN might try to resurrect a 2013 Indonesian initiative to promote an “Indo-Pacific wide treaty of friendship and cooperation” to reduce China’s concerns.

A test of principles

A more assertive China and the United States’ relative neglect have undermined ASEAN unity in addressing critical issues

A more assertive China and the United States’ relative neglect have undermined ASEAN unity in addressing critical issues such as the South China Sea dispute.

ASEAN has an important role to play in protecting all states’ shared interest in adherence to international law, the peaceful settlement of disputes, and freedom of navigation. If ASEAN wants to maintain the rule of law, it cannot afford to remain silent, as it did in July 2017, when China threatened military action after Hanoi began drilling for oil and gas in Vietnam’s exclusive economic zone.

Vietnam has extended an oil concession to India. If New Delhi begins drilling and China repeats its bellicose behavior, ASEAN would face another critical test. Continued silence would bode poorly for the trajectory of the rule of law.

Electoral politics and other internal challenges

Achieving a unified position in dealing with great power competition is difficult enough, but ASEAN must also deal with internal issues that threaten to weaken the group’s cohesion.

The most significant issue in this regard is Myanmar’s harsh treatment of the Muslim Rohingya community in Rakhine State. The crisis has drawn international condemnation and frayed Myanmar’s relations with the Muslim-majority nations of Malaysia and Indonesia.

As ASEAN chair, Singapore will have the difficult task of helping to stem the ethnic violence and ensuring that humanitarian aid reaches displaced Rohingya communities in Myanmar and neighboring Bangladesh. The ASEAN Coordinating Centre for Humanitarian Assistance is doing important work in this respect, but much more needs to be done. The crisis is stretching the region’s capacity to deal with the refugee influx, threatens to undermine ASEAN unity, deepens religious divisions, and increases the risk of violent extremism.

In Cambodia, the government’s crackdown on the opposition will put additional stress on ASEAN ahead of elections in July that will extend Prime Minister Hun Sen’s 30 years in power. Although the ASEAN principle of non-interference in the internal affairs of a member state will almost certainly be observed, Singapore will still need to address likely calls from some quarters for a tougher stance. Military-ruled Thailand is also likely to see controversial elections this year.

Another challenge comes in Malaysia, where the long-ruling coalition government is likely to resort to religious appeals to the Muslim-majority population to win elections this year in the face of corruption allegations. This creates the potential for ethnic clashes in the multiracial country, which could destabilize Singapore and the rest of the region. As ASEAN chair, Singapore needs to consider how the group can build interethnic resilience.

Singapore will need to encourage Indonesia as the group’s largest member to resume its role as a driving force in ASEAN, which Jakarta has neglected in recent years. Jakarta has lately demonstrated some leadership on spearheading humanitarian assistance to the Rohingya, but this has largely been in response to domestic politics, including radical Islamist groups seeking to politicize the issue.

Singapore’s relations with China

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Singapore may find its leadership of ASEAN this year affected by its strained relations with China, which has criticized the ethnic Chinese-majority state for its close ties with the United States and firm stance on the South China Sea. Although Singapore does not take sides on parties’ specific claims, it has critical interests in adherence to international law, freedom of navigation, and ASEAN unity, which the dispute undermines.

The testy relations have provoked concerns within Singapore’s business community, thereby complicating foreign policy toward China. Soon after participating in a World Economic Forum event in Dalian where China’s hospitality and beneficence was in full display, this author overheard a Singaporean businessman complain in Hong Kong that the goodwill that the late Singaporean Prime Minister Lee Kuan Yew had built up with the Chinese was being squandered by his son, the current prime minister. He asked what interests Singapore had in the South China Sea. It was clear that the long reach of China’s “sharp power” also extends to Singapore. China has been trying to influence Singapore’s business and even academic communities as well as various clan, cultural, and literary associations.

A principled approach pursued pragmatically

Singapore’s foreign policy has been characterized by its adherence to principle and pragmatism, which it will seek to apply in representing ASEAN in relations with external partners. Some consider these competing approaches, but one can argue that a principled approach is a pragmatic one, particularly for countries seeking shelter against the wanton exercise of raw power.

Image result for Singapore's Foreign Minister Dr Vivian

Singapore will need to stand firm against pressure to bend on issues of principle as ASEAN chair; its chairman’s statement that took note of the concerns of some ministers on “land reclamations and activities” in the South China Sea is a good start.

While Singapore is unlikely to budge on principles, it will take a pragmatic approach in how it seeks to communicate them. Singapore’s foreign minister has stressed “quiet but active diplomacy.” Its senior diplomats insist that Singapore’s message will not change, but it will exercise more care in how it communicates this to other parties.

Whether Singapore will be able to successfully navigate the challenging year ahead is still uncertain. Much will depend on sustained U.S. attention to the region on the security, economic, and diplomatic fronts. It will also depend on Singapore’s ability to persuade member states to work together to maintain ASEAN’s relevance and centrality. The work has already begun with ASEAN states reiterating the importance of maintaining ASEAN centrality and unity at the foreign ministers’ meeting. At stake will be the ability of ASEAN to chart its own course and the very character of the region itself. ASEAN and member states must decide whether a region governed by right, not might, is worth defending.

Malaysia-Singapore Ties– Good But New Challenges Ahead

February 28, 2018

Malaysia-Singapore Ties– Good But New Challenges Ahead

by David Han, RSIS


The governments under Lee and Najib have the same commitment to foreign policy based on pragmatism and international norms. These shared diplomatic principles bode well for the future of Singapore–Malaysia relations. But it would be simplistic to view Singapore–Malaysia ties as existing without any challenges.–David Han

Image result for Lee Hsein Loong and Najib Razak

The eighth Singapore–Malaysia Leaders’ Retreat held in Singapore from 14 to 15 January 2018 witnessed a milestone in bilateral ties. Leaders of both countries signed an agreement to build a rapid transit system linking Johor Bahru and Singapore, and officially launched the Marina One and Duo joint developments. But new challenges threaten to test relations between the two neighbours.

Leaders envisage that the rapid transit system’s rail services will ease congestion on the Johor–Singapore Causeway and enhance cross-border economic cooperation. Marina One and Duo, located on prime Singapore real estate in the Marina Bay financial centre and Bugis respectively, seek to tap into property and commercial markets.

Symbolically, the projects underscore the interdependence between Singapore and Malaysia. They are the results of a nearly decade-long effort by both governments to put aside their previous acrimony and find viable solutions to ongoing bilateral spats.

Of course, the currently healthy state of bilateral ties is not entirely dependent upon these two deals. The more ambitious Iskandar Malaysia development project, which aims to transform Southern Johor into a thriving economic zone, is another key motivator for both countries to maintain strong ties. Neither side wants bilateral contentions to disrupt the lucrative benefits of Iskandar.

Image result for Lee Kuan Yew and Dr. Mahathir Mohamad

These developments mark a clear shift away from the strained relations that prevailed during the Mahathir era. Malaysian Prime Minister Najib Razak summed it up aptly when he remarked that the two countries should cease engaging in ‘confrontational diplomacy and barbed rhetoric’. Singapore’s Prime Minister Lee Hsien Loong hopes the transit agreement’s legally binding nature will connect succeeding generations of leaders.

For a time, the 1Malaysia Development Berhad (1MDB) controversy cast a spotlight on matters of transparency and accountability in joint collaborations such as the Kuala Lumpur–Singapore High-Speed Rail. But Singapore authorities took firm action against financial institutions implicated in the scandal, including several banks. Thanks to Singapore’s actions to preserve the integrity of bilateral cooperation, 1MBD did not sour ties between the two countries.

The governments under Lee and Najib have the same commitment to foreign policy based on pragmatism and international norms. These shared diplomatic principles bode well for the future of Singapore–Malaysia relations. But it would be simplistic to view Singapore–Malaysia ties as existing without any challenges.

A case in point is the growing Johor–Kuala Lumpur rivalry. Johor’s Sultan Ibrahim Ismail has been openly critical about several major political, social and economic issues in Malaysia. He is not alone: other Sultans in Malaysia have been voicing similar concerns over mounting domestic problems in recent years. The outspokenness of Malaysia’s monarchs indicates a rare deviation from their largely symbolic role, in which they rarely engage directly in political affairs.

Observers have interpreted this deviation as an attempt by the monarchs to gradually regain their former authority and influence, which were curtailed by the 1993 constitutional amendment that took away their veto powers and restricted their legal immunity. The Johor Sultan’s call for this amendment to be rescinded could be a flexing of political muscle.

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Singapore relations.  Before the rapid transit system agreement was signed, he was critical of the link’s original curved design (though he supported the overall project). The Sultan remarked that the design would not only be costly and impractical, but also mar the skyline of Johor Bahru. The bridge was consequently redesigned to be straight. The Sultan also called for greater involvement by the Johor state government in the project.

Cross-border issues have been and will increasingly be an unavoidable part of bilateral ties. Some of these issues centre on particularly close people-to-people traffic between Kuala Lumpur and Singapore. Tensions are likely to arise from sources such as race relations, labour standards and transnational crime.


Meanwhile, Malaysia will hold its 14th general election in the middle of 2018. The Najib government has risen above its political quagmire and is likely to win the upcoming election. Some have speculated that if the opposition coalition Pakatan Harapan seizes power, its leader and former Malaysian Prime Minister Mahathir Mohamad might unravel bilateral ties. But Pakatan Harapan is a fragile group plagued with its own problems. Its chances of victory are very slim.

On the other side of the causeway, a new Singapore Prime Minister could be in office after the election due in 2021. But Prime Minister Lee has expressed that more time is needed to prepare his successor and the fourth-generation leadership. These developments would mean leadership continuity in both Malaysia and Singapore, which would ensure that bilateral ties remain at the healthy status quo — at least in the short term.

David Han is a Senior Analyst with the Malaysia Programme at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore.


Singapore’s mystifying political succession

February 12, 2018

Singapore’s mystifying political succession

Why is the PAP so ambivalent about the idea of being led by the brilliant and erudite Tharman Shanmugaratnam of Ceylonese Tamil ancestry ?

By Cherian George


Image result for Lee Hsien Loong to retire at 70

Should Prime Minister Lee Hsein Loong retire at 70 then?

Whoever emerges as Singapore’s premier-designate, two things are certain. First, he will come from the People’s Action Party (PAP), the only ruling party Singapore has known since it became self-governing in 1959. Second, he will want to preserve the PAP’s pro-business-but-socially-responsive philosophy, and its security-focused state apparatus with a dominant executive at its core.

Despite these givens, the succession question is currently a key preoccupation in the city-state. Prime Minister Lee Hsien Loong has said he would step down by the age of 70, which is now four years away. Three fourth-generation (“4G”) leaders are said to be on the shortlist to take over: Finance Minister Heng Swee Keat, 56, and two 48-year-olds, Chan Chun Sing and Ong Ye Kung. The uncertainty is testing people’s faith in a political brand associated with surprise-free long-term planning. Less talked about in mainstream media, but more troubling, is how the PAP has sidelined the individual who most inspires confidence—Deputy Prime Minister Tharman Shanmugaratnam.

In the larger scheme of things, these career technocrats may seem to be just different shades of white. Yet who will succeed Prime Minister Lee is not a trivial matter. Within the parameters of PAP ideology, there is scope for a new leader to embark on meaningful changes—or not. Despite the party’s strong showing in the 2015 general election, when it won 70% of the popular vote, one should not underestimate the need for internal reform. On Singapore’s political spectrum, people who prefer the PAP to stay the same—or, at the other extreme, to lose power—are probably outnumbered by those in the middle, who want a much-improved PAP.

In recent years, Singapore academics have contributed suggestions for radical reform that a bolder PAP should find thinkable and doable. Public policy scholar Donald Low, for example, has argued that Singapore needs to shake up its governance principles if it wants to respond effectively to current socio-economic challenges (Hard Choices, 2014). Sociologist Teo You Yenn makes the case for more compassionate social policy to address an alarming income divide (This is What Inequality Looks Like, 2018).

In my own recent book, I contend that enlightened self-interest should persuade the PAP to embark on liberal political reforms (Singapore, Incomplete, 2017). Even among Singaporeans who are generally pro-establishment, there is dissatisfaction with government leaders who seem far too quick to brush off lapses, whether it’s chronic breakdowns of the mass transit system or the massive corruption scandal involving the government-linked Keppel corporation.

Hence the interest in how the PAP’s rejuvenation plays out. Indeed, there is probably more curiosity about this round than ever before. It will be only the third occasion in more than 60 years that Singapore has changed prime ministers. The first time was when the nation’s patriarch Lee Kuan Yew stepped aside for Goh Chok Tong in 1991. This was a moment met with more disbelief than anticipation: it was assumed that Lee would still be pulling the strings. As for the identity of Goh’s successor, the writing was on the wall even before he moved into the Istana. When Lee Kuan Yew’s son Lee Hsien Loong took over in 2004, the only surprise was that Goh lasted as long as he did.

This is thus the first time in the republic’s history that there is a genuine and potentially far-reaching choice of leader. Singaporeans who are understandably seized by this moment, however, are beginning to feel frustrated by a closed and opaque leadership renewal process. Singapore has a Westminster-style parliamentary system in which citizens do not directly select the head of government. Like in Britain, Australia and India, Singaporeans elect members of parliament, but it’s the winning party’s leaders that decide who takes charge of the executive branch. In such systems, it is not uncommon for a ruling party, after internal wrangling, to suddenly announce a new prime minister in mid-term. Three of the last four Australian premiers came to power this way.

In Singapore, though, the problem is compounded by the lack of democracy within the party in power. Lee Kuan Yew gave the PAP a Leninist structure, ensuring that its summit could never be conquered from the base. The central executive committee, via cadres it selects, basically elects itself. It would be pointless for any leadership contender to appeal to the party membership, let alone the wider public. Popularity does not decide succession. It may even work against candidates, since the government’s elite technocrats have always been suspicious of the popular will. They would not look kindly on any colleague cultivating too direct and independent a connection with the ground.


On the plus side, this model protects Singapore from the kind of demagoguery associated with presidential systems: a Duterte or Trump is not going to emerge suddenly from the primordial ooze. On the other hand, though, the lack of any clear mechanism for managing a leadership contest denies the PAP the chance to engage in a radical reassessment of its direction. In most democracies, party conventions serve this function, but in this regard the PAP more resembles the Communist Party of China: party conferences are stage-managed occasions for the formal anointing of pre-selected leaders. In effect, this system puts Singapore’s political future in the hands of a very small coterie of men—the prime minister and perhaps two or three members of his kitchen cabinet.

The official line is that the next-generation ministers will get to choose their leader among themselves. There is precedent for this. Goh Chok Tong was not Lee Kuan Yew’s first choice, but the job went to him anyway because he was the consensus pick within his cohort. In that spirit, sixteen 4G office holders released a joint statement in January assuring the public that they “are working closely together as a team, and will settle on a leader from amongst us in good time”. It should be stressed, though, that any autonomy the 4G ministers enjoy is by the incumbent prime minister’s leave. If he and his lieutenants have a favoured successor, any other contender has to be extremely cautious and deft if he plans to lobby for job. The system isn’t just opaque to outsiders; even a potential challenger needs to feel his way, with no precedent to guide him.

It is also clear that the current incumbents want continuity more than change. Lee has occasionally spoken of the need to think outside of the box and slaughter sacred cows, but in recent years his administration’s overriding instinct has been to preserve the status quo. Thus, at a time when even Singaporeans close to the establishment understand the need for fresh thinking, the succession process has a strong bias in favour of conservatism.


In January, Lee said that it would take “a little bit longer” to name his successor, killing speculation that the matter would be more or less settled through a cabinet reshuffle after next month’s Budget debate. Although some saw this as a sign of reluctance to step down, it could also be because the 4G deliberations are not going according to script. Some say Lee’s presumptive first choice, Chan Chun Sing, may not be getting the unanimous backing of his peers. Ong Ye Kung, in an intriguing comment to the Straits Times, said he had in mind a colleague who, among other characteristics, had the ability to drive long-term, important policy—which seems to describe Finance Minister Heng better than Chan, who, unusually for a high-flier, has not held a key economic portfolio. Granted, there is a risk of reading too much into the precious few opinions the ministers have offered about succession. What is clear, though, is that the process is not progressing like clockwork.

Under our noses

The Straits Times obligingly offered a “neat solution”. Lee should eat his words and serve beyond the age of 70, one of its editors opined: “It gives enough time for the changing of the guard to happen smoothly and uneventfully.” There is, however, another obvious answer staring Singapore in the face. Deputy Prime Minister Tharman Shanmugaratnam, 61, could take over until the 4G cohort produces a leader. Tharman, who held the education and finance portfolios with distinction, is Singapore’s most highly regarded politician. This lifelong public servant would never thrust himself into the race—indeed, he “categorically” ruled himself out last year—but by the same token it is unlikely that he would refuse if his party insists.

Conventional wisdom states that he is too close to Lee’s age to tick the rejuvenation box. Yet, they are five years apart, the equivalent of a full parliamentary term. Whatever the government now considers an appropriate retirement age for a prime minister, Singapore could benefit from a five-year Tharman administration in between Lee and a 4G successor.

Another question mark hovers over Tharman’s race. He is of Ceylonese Tamil ancestry in a country that is 70% Chinese. Detractors claim Singapore is not ready for a non-Chinese premier. There’s no doubt that racial prejudices persist: in a 2016 Institute of Policy Studies survey, only six in ten Chinese said they would accept an Indian prime minister. But such polls are misleading. It is one thing to ask people to react to a hypothetical, nameless, faceless candidate of a given race. It’s another thing entirely to offer voters a specific, real-life individual. In the former case, there’s a high chance that survey respondents’ racial stereotypes will be activated—since race is the only biodata they’ve been given. In the latter case, voters are able to consider the whole person. Of course, some voters may not see past the candidate’s colour. But many will be drawn to other salient traits, such as character and experience.

Thus, in the real world, there’s no contradiction between harbouring generalised prejudices against a particular ethnic group and feeling positively towards specific persons of that very race, because they are not “that” kind of Indian or Malay or whatever. (Successful individuals from minority backgrounds are well acquainted with being patronised in this manner.) Thus, human beings are able to manage the cognitive dissonance of holding on to their racial prejudices even as they acknowledge the undeniable worth of specific members of that community.

Whether we label such inconsistency reasonableness or irrationality, Tharman is clearly a beneficiary. The same year as the IPS survey, a poll commissioned by Yahoo showed that seven in ten Singaporeans would support (not merely accept) Tharman as their next prime minister—twice as many as his fellow deputy prime minister, Teo Chee Hean, who came in second. In the 2015 general election, Tharman outperformed everyone else, including the prime minister, in the popular vote. His team secured more than 79% of the ballots in their constituency, significantly higher than the already-impressive 70% share that the PAP won nationally. No matter how racist Chinese Singaporeans may be, there is simply no evidence that this handicaps Tharman’s ability to rally the ground. Mystifyingly, though, Lee and his colleagues have declined to express such confidence. “I think that ethnic considerations are never absent when voters vote,” Lee said when pressed by the BBC about whether Singapore was ready for an Indian prime minister.

The real issue with Tharman may be the colour of his politics, and not his skin. More than any other minister, he has an appetite for progressive reforms. Ironically, his social initiatives addressing households’ economic insecurity were probably the most important policy-related reason why the PAP did so well in the 2015 election. (Another key factor, the tidal wave of sentiment following the death of Lee Kuan Yew, was an unplanned, one-off act of god.) But soon after, he was moved into a coordinating minister role, losing his finance portfolio to Heng.

The PAP has always taken pride in its adroit navigation of global tides. If it were to apply that skill to the succession question, it might appreciate the competitive edge that Tharman offers Singapore at this moment in history. Neoliberalism is wearing thin; citizens across the developed world are rebelling against elites and expertise, and finding false hope in identity politics; polarised politics is preventing publics from working for the common good; populism is drowning out sensible solutions to complex problems.

To the extent that any one leader can make a difference, Tharman is the man for these times. He is a world-class policy wonk who also happens to be extremely popular. He has won over the public, not with empty rhetoric or simplistic solutions, but through his palpable sincerity in wanting to build a country where people are treated with dignity and met at the point of their need, whether those needs are economic or more intangible. Some Singaporeans say picking a non-Chinese leader would be a triumph of imagination. On the contrary, if the PAP doesn’t take advantage of Tharman’s unique capacities, it’s not its imagination that should be questioned, but its grasp of reality.


Governing Singapore beyond Lee Kuan Yew

February 3, 2018

Governing Singapore beyond Lee Kuan Yew

by Cherian George*


*Cherian George is professor of media studies at Hong Kong Baptist University. His research focuses on freedom of expression and censorship in Asia, as well as religious intolerance and hate propaganda. He is the author of “Hate Spin: The Manufacture of Religious Offense and its Threat to Democracy” (MIT Press, 2016), which is based on research on religious nationalism in India, Indonesia and the United States.

One of the late Lee Kuan Yew’s most admirable acts of foresight was to usher out Singapore’s first-generation leaders in order to hasten the rejuvenation of the People’s Action Party (PAP). Giants like Goh Keng Swee, S. Rajaratnam and E.W. Barker retired from the government in the 1980s, when they were still younger than Ronald Reagan and Donald Trump were upon entering the White House. In the short term, this represented a massive underutilisation of talent. But that’s how determined Lee was to make sure that the next generation—Goh Chok Tong, Ong Teng Cheong, Tony Tan, S. Dhanabalan and others—would emerge from the shadow of their seniors to secure the future of the ruling party.

PAP exit management under Lee had one major omission, though. Himself. Lee felt he needed to stick around. Since his designated successor Goh Chok Tong had no objections, Lee didn’t accompany his first-generation comrades to the early retirement he had so strenuously advocated. After 1991, when Singapore got a new premier for the first time in 32 years, various terms were used to describe Lee’s new position. Senior Minister. Minister Mentor. Goalkeeper. Whatever the title, for the next 20 years, the simple political reality was that LKY was still around. At The Straits Times where I used to work, word came from way above my pay grade that we were not to say he stepped down. He stepped aside.

It could have been much worse. He could have held on to the top job like Cuba’s Fidel Castro, who also won power in 1959 but would only concede it to death, 47 years later. Or like Zimbabwe’s Robert Mugabe, who before he was ousted by the military was saying he’d run for another five-year term in 2018, at the age 94. Or he could have done a Mahathir Mohamad, who never met a potential or actual successor he didn’t eventually consider an enemy to undermine or incarcerate.

If Lee didn’t join this club, it wasn’t because he lacked self-belief or the stomach for undemocratic methods. Perhaps his autocratic tendency was tempered by his hyper-rational, unsentimental view of life. He knew time changes everything, and that people grow old, get weak, and die. So, while convinced that Singapore needed an omnipotent executive branch to run the place, he also knew its personnel would have to be rotated before they succumbed to their mortality. He also differed from the typical dictator in that his family was clean. Corrupt strongmen avoid the exit door because they fear it will lead them and their kin straight to prison. The Lees didn’t have that problem.

Whatever the reasons, Lee Kuan Yew didn’t follow the jealous despot script. Instead, he institutionalised a system of leadership renewal. Therefore, while the PAP as a party is unapologetic about its desire to dominate politics indefinitely, PAP leaders as individuals accept they have to make way for younger replacements.

Things could have been worse; but they could have also been better. Political self-renewal must mean more than replacing older leaders with younger ones. It may require systemic change as well. This is where the PAP fell short. Lee and his junior colleagues failed to adapt their governance model to the post-LKY era. They underestimated how much the system had evolved around Lee’s style and philosophy. After three decades, the state had become like a corporate computer system patched together by a brilliant IT guy who refuses to adopt off-the-shelf solutions used by other firms, and insists on installing his own custom-built software upgrades year after year. He is conscientious enough to train apprentices and write a voluminous troubleshooting guide. But only he knows how to get optimum performance out of his system. Eventually, the company will find out the hard way that it should have adopted more resilient open-source solutions that wouldn’t depend on their champion IT guy being on call 24/7.

The globally respected operating system that Lee rejected while he was in office was the democratic template of checks and balances to avoid over-concentrated power. Robust institutions insure against the mortality and fallibility of human leaders. Lee placed his bets instead on a conveyor belt of able men unfettered by onerous constraints. This had been Lee’s unique contribution to the founding generation of PAP leaders. The master political strategist opened up space for brilliant policy entrepreneurs like Goh Keng Swee and Hon Sui Sen to work their wonders. He did this partly with his persuasive skills, but also by pushing aside legal, institutional and human obstacles in the way of an increasingly dominant administration.

Lee failed to acknowledge that this formula couldn’t last indefinitely. His miscalculation produced at least two policy innovations that proved costly for the PAP, and for which the party is still paying a price. These were the elected presidency and the ministerial pay formula. Both were the products of a mind obsessed, as it always had been, with the challenge of protecting Singapore governance from the vagaries of public opinion and the popular vote. They were hatched during that period from the late 1980s to the 1990s when Lee was handing over to the second-generation leadership, and anticipating what might go wrong. And both became Frankenstein’s monsters that made his successors’ jobs harder, not easier.

The elected presidency was Lee’s insurance policy against a so-called freak election that could bring the wrong party into power. The insurgents might only last a single parliamentary term, but they could cause permanent damage in that time, Lee feared. They could raid the country’s financial reserves and replace key public sector appointment holders with incompetent cronies. Lee decided that the office of the president had to be given the power to veto such plans. This new executive role would require the president to be directly elected by the people.

Lee’s constitutional fix, meant to make Singapore more stable, ironically created one of its main sources of political uncertainty. The freak election scenario remains a whimsical notion; but in the meantime, presidential elections have opened up a new front to challenge PAP dominance. This has forced the PAP to shift more attention away from governance and towards politics—the exact opposite of what Lee spent most of his career trying to do. To address the risk that presidential elections will deviate from the government’s preferences, it has had go through various contortions, including reducing the power of the president in relation to the unelected Council of Presidential Advisers, raising the pre-qualification bar for would-be candidates (including reserving this year’s election for Malay candidates), and lecturing Singaporeans that they must not politicise the presidency. The rancour surrounding presidential elections—and the attendant cost to the unifying purpose of the head of state—had been predicted by Singaporeans who submitted thoughtful feedback during the Select Committee hearings leading up to the 1991 constitutional amendments. Lee had brushed aside their concerns.

The pay formula for ministers and senior civil servants was another radical idea born of Lee’s frustration with an obtuse Singapore public. He was justifiably concerned that skyrocketing private sector pay would weaken the public sector’s ability to recruit top talent. He was correct to conclude that the government could not let its remuneration lag too far behind. Where he went wrong was to decide that, instead of arguing it out in parliament every time it needed to revise its pay structure, the government should create an automatic formula pegging public officials’ salaries to those of top earners such as lawyers, bankers and corporate chief executives.

Singaporeans could see the fundamental flaws in the idea. A league table of top salaries in fields like banking and corporate management would show very high figures year after year, but those salaries were not going to the same people every year. Firms and individuals would enter and leave the list; they were in risky, competitive markets. Like boy bands, they might be at the pinnacle for only a few years. In contrast, the government’s stars would continue to get top dollar for a couple of decades, their pay being pegged to the private sector’s equivalent of Westlife in the 1990s, the Jonas Brothers in the 2000s, and One Direction in the 2010s. This just didn’t smell right. Many Singaporeans also had deep concerns about so explicitly marketising the relationship between leaders and led.

Lee Kuan Yew would have none of it. He was determined to do what he had always done: use his political clout to create a structural fix that, he thought, would put an end to unproductive debates and let the government get on with the job. Concluding his marathon speech during the 1994 parliamentary debate on the formula, Lee declared, “I say I am prepared to put my experience and my judgement against all the arguments that doubters can muster. In five to ten years, when it works and Singapore has a good government, this formula will be accepted as conventional wisdom.”

In the realm of embarrassing 1990s predictions, this one vies with 3Com founder Robert Metcalfe’s statement the following year:I predict the internet will soon go spectacularly supernova and in 1996 catastrophically collapse.” For instead of depoliticising the question of public sector remuneration, Lee’s formula bequeathed to his successors possibly the era’s single most toxic policy move. Exactly as critics predicted, it infected government–people relations with cynicism and distrust.

The PAP had prided itself on its willingness to make unpopular decisions in the country’s long-term interest, but now when ministers resisted the popular will, their motivations would be questioned—of course they don’t care about the people, they only care about their high-paying jobs. The market-pegged formula also made people contemptuously unforgiving of inevitable mistakes—this is what million-dollar salaries get us? Another serious unintended but predictable consequence was to make the civil service resistant to change, by disincentivising risk-taking among officers earning salaries many know they can’t command elsewhere.

Lee Kuan Yew admitted to making mistakes, especially in pushing zero population growth too aggressively in the 1970s. But he couldn’t really be faulted for that one, since practically every government looking at similar demographic trends arrived at the same policy prescriptions. In contrast, Lee’s ideas to restructure of the presidency and public sector pay in the 1990s were idiosyncratically his own. And they were not cases of random error but systematic error, as scientists would put it. They resulted from his peculiar obsession with protecting the state from the unpredictability of democratic politics. He had more or less succeeded in doing so in earlier decades—like that special IT guy, constantly troubleshooting and tinkering. But he overestimated his ability to design plug-ins for Singapore’s operating system that would continue to function smoothly after he left.


He does not deserve all the blame. As he phased himself out of day-to-day government, it was up to his younger colleagues to stress-test his legacy clinically and redesign the system accordingly. If they were too in awe of his status as supreme architect of PAP software, that was their fault, not his.

That’s why my heart fell when he became the first casualty of the PAP’s 2011 general election setback. Sure, it was ill-advised of him to spout warnings during the campaign that voters in the five hot seats of Aljunied would “repent” if they elected the opposition (they ignored him and did). But the strong anti-PAP swing was due to cabinet’s collective blunders in the preceding years that had little to do with Lee.

Lee Kuan Yew’s political legacy – a matter of trust

Shamefully, he—jointly with Goh Chok Tong—was allowed to announce his resignation a week after the election, and before colleagues whose presence in cabinet Singaporeans had been querying for years. It was an undeservedly ignominious end to a government career that would be eulogised profusely four years later.

Lee and Goh said they were doing it to indicate “that the PM can and will revise and revamp his policies … to give PM and his team the room to break from the past, and … to make it clear that the PAP has never been averse to change”. When he accepted their resignations a few days later, Lee Hsien Loong allowed their rationale to stand—to “leave it to me and my team of younger ministers to take Singapore forward into the future”—thus throwing out of the window two decades of PAP assurances that Lee Kuan Yew’s presence in cabinet had never been an obstacle to progress, since ministers had minds of their own.

For more than a decade, Lee Kuan Yew had been codifying his beliefs in his memoirs and other books. This exercise was a symptom of the PAP’s understandable anxiety that its unique formula for good governance would not survive him. But it also contributed to the old pragmatism of the PAP giving way to dogmatism. After LKY’s final, emotional exit in February 2015, the depth of his influence became even more apparent. LKYism became a kind of quasi-theology, with members of the governing elite falling over one another to cite his words and acts, and thus show that they were the legitimate interpreters and inheritors of Singapore’s ultimate oracle. Being “against Mr Lee’s values” emerged as a damning label to stick on opponents within the establishment. Lee had long been called the founding father of the republic, but in 2017, Deputy Prime Minister Teo Chee Hean took the quantum leap of declaring that all of us—as individuals, not just collectively—are “sons and daughters” of Lee Kuan Yew. Of course, Teo did not actually possess the power to rewrite everyone’s birth certificate, but the remark revealed Lee’s place in the minds of the PAP’s senior leadership.

Teo’s declaration came during the parliamentary debate on the Lees’ feud over their family bungalow at 38 Oxley Road. This was a debate that engrossed the establishment and most ordinary Singaporeans. It centred on what to do with the building that was Lee Kuan Yew’s private residence during his adult life. The debate missed the point. The question we should be asking is how much room to give to the Lee Kuan Yew that will reside in the Singaporean mind long after his death.

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This essay is extracted from Cherian George’s self-published anthology, Singapore, Incomplete: Reflections on a First World Nation’s Arrested Political Development. The book is his first for a general audience since his 2000 volume, Singapore: The Air-Conditioned Nation.



School system needs to match transformation society has undergone

January 20, 2018

School system needs to match transformation society has undergone

Despite emergence of small families and well-educated but working parents, education structure has changed little in past five decades, Michael Heng points out


Schools in Hong Kong and many cities elsewhere in Asia have not undergone significant changes since the 1960s while family structure, the economy and other elements of society have experienced great transformations. Just to name four changes that have direct bearing on education. First, families have become smaller; many children have either one or no sibling. Second, most parents today are pretty well-educated — at the very least they are literate. Third, jobs for university or polytechnic graduates are more difficult to come by. Fourth, there is an ample supply of teachers’ college graduates.

In the 1960s, schools focused mainly on transmitting knowledge to students. In line with this exam results were the key criteria to measure school performance. Not many schools had well-trained teachers. Where students felt their teachers failed their expectations, they had to turn to some kind hearted and brainy fellow classmates for help. In many cases, their parents were too poorly educated to help, and they could not afford private tuition. In such conditions, other important matters related to full development of an individual were pushed into the background. One hardly heard of schools being responsible for helping students develop social and communication skills and guide them in coping with personal problems, failures in life, etc.

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Fast-forward to the 2010s, schools have changed. Though there has been open recognition of the roles of schools in the full development of an individual, the main emphasis is still on exam results. Even with a growing army of well-trained teachers and better-educated parents, we see a booming private-tuition industry. Our mindset and practices on educating our young are stuck in the 1960s, despite conditions having changed so much.

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With only one sibling or no sibling, a child has lost the family environment and does not acquire the habits and skills to cope with older and younger siblings. This inadequacy is often not addressed by schools, which put children of the same age in the same class. As an alternative, primary schools can have just two kinds of classes. One kind comprises classes with children aged 6, 7 and 8, and the higher for children aged 9, 10 and 11. They not only learn from the teachers, but from each other. The younger ones do content-learning from the older ones, while the older ones learn how to teach the younger ones. There is a “risk” the older ones will fail to teach the content correctly to younger ones. But there are textbooks, well-trained teachers, and well-educated parents to correct errors. Moreover, children are exposed from a young age to develop independent thinking and to absorb materials through questioning and critical thinking. Such mental habits are immensely useful for independent pursuit of knowledge. For those familiar with Montessori educational philosophy, the approach sounds familiar.

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Schools should also be reorganized in terms of time and space. Since both parents of most young families work, schools can be organized to keep students at school while parents are working. All kinds of interesting activities can be organized to fill in the hours. Homework in the traditional sense should be done during these hours. “Weaker” students should be assisted by “stronger” students, making tuition redundant. Off-school hours are free from homework and can be fruitfully spent on such activities as community work or learning extra languages.

As a very rich city, Hong Kong can afford to have small classes. Unlike a class of 40 students, where teachers sometimes have to struggle just to maintain discipline and order, what about a class of 20 to 25 students? Any person with teaching experience can testify to the benefits of small classes in schools. To offset the negative aspects of living in a concrete jungle, schools should have bushes, flowers, vegetables, plants and trees to cultivate an early respect for the natural environment.

Besides transmitting book knowledge, there are other dimensions of education — cultivating good character, attitude toward work, social-justice awareness, proper human interaction and ability to cope with failures and setbacks in life.

Good character is more than integrity and being upright. It includes the ability to help others, especially the weak and disadvantaged. Here schools should design incentives to encourage such behavior. For example, classes can be assessed on cooperation and mutual assistance among students, as a balance to competitive exams.

The major spiritual traditions attach great value to productive work, whether well-paid or otherwise. Such attitude is important especially in the current labor market where well-paid professionals may lose their jobs through no fault of their own. Those who perceive all productive work as respectable will be more flexible in facing the situation. Of course, social attitudes must also change to make it easier for redundant staff.

The author is a retired professor who had academic appointments in Australia, the Netherlands, and at six universities in Asia. He has been trained as a school teacher and has also taught in secondary schools.