IF YOU’VE JUST DEVELOPED A GREAT PRODUCT, your goal is to develop a better one that will make the first one obsolete. If you don’t make it obsolete, someone else will.” So says best-selling author Don Tapscott, in Grown Up Digital.
Singapore is an intriguing country. A statement expressed by many who have visited this small tropical nation of 718 square kilometres with limited natural resources but which has quite astoundingly amassed a gross domestic product (GDP) of $390 billion. I recently visited Singapore amidst its 50th anniversary celebrations – independence acquired from Malaysia – and what a sight to behold! The fanfare with which this nation celebrated this milestone speaks to the level of intensity and commitment that has been a part of its culture and portraying it as an economic miracle.
But how many of us have researched the challenges and strategies that have propelled Singapore to this level of economic achievement and industrial growth? A developing country like Barbados can only learn from this, and gain insights for a road map for sustainable growth. Next year, Barbados will also be celebrating 50 years of independence and as a nation we should reflect on the state of our economy prior to independence, the strategies we have implemented, their impact economically, politically and socially and articulate our road map for the next millennium.
A visionary leader! Many pundits have credited Lee Kuan Yew, Singapore’s first prime minister, for transforming it from one of the poorest countries in the world in the 1960s to being among the most advanced nations today.
Yew’s key to success was that he understood that in order to put Singapore on a sustainable growth trajectory that a sound economic policy was not enough. Quite frankly, any policy can be reversed, any incentives for growth can be dismantled. What must be harnessed is an institutional framework that is unwavering.
What has led to the emergence of Singapore as a powerful and wealthy nation can be attributed to the following factors: a highly technocratic government which led to a competitive meritocratic and results-based policy driven economy; renown as a destination for investment; little tolerance for complacency or corruption; identified human capital as a key competitive advantage by attracting high calibre people who would create employment, bring in much needed capital and pass on their skills; build state of the art infrastructure and excellent air and sea linkages; a low and transparent tax regime; a strong regulatory and legal framework; a neutral diplomatic policy which has ensured Singapore as an ally of the United States as well as China; and developing a clean and green environment.
With such high praises, what does the future hold for Singapore? Will the political system and the economic regime forged by Yew unwind?
Can Singapore sustain the pace of development amid the current economic turbulence in Europe? While some envision continued success, others have foreseen a changing landscape.
Firstly, pessimism exists where experts argue change is inevitable and in some instances Singapore will have little or no control. Inadvertently, there are always some downside risks to growth such as rising income inequality. Singapore’s present population has also become both social media savvy and more politically engaged.
This combination will mean a higher proportion of younger voters will demand the right to free speech and possible dissent might occur.
Policymakers should therefore encourage a more flexible and open political system that demands public accountability.
Furthermore, emphasis should be placed on Singapore’s competitive advantage as a shipping and aviation hub second only to China in the world; and its role as a regional headquarters for global multinationals.
Finally, as in any nation in this turbulent economic time, governments must find a balance between fiscal prudence and welfare programmes to ease partial unrest in populations coping with a high cost of living.
The possibilities are endless for policymakers but a structured approach to continue the drive and commitment exhibited among all parties involved is critical.
Hence, to maintain their competitive advantage, Singapore and developing countries like Barbados must continue to reinforce their emphasis on value added industries with strong productivity growth.