The Singapore way

  • Themes: Singapore

If Britain is to reckon with its present economic sickness, it will require a cultural transformation of an epic scale. The triumph of Singapore in the 20th century may offer a guide.

Singapore harbour with the city in the background.
Singapore harbour with the city in the background. Credit: Prasit Rodphan / Alamy Stock Photo

Necessity, it is often said, is the mother of invention. And so it is true of economic growth. Nations tend to do the things required to increase output, productivity and competitiveness only when the consequences of not doing so seem even more dire. Throughout history, it has often taken some moment of crisis, often existential, for policymakers to deliver the root and branch reforms required to fundamentally change the fortunes of an economy.

Why is that crises can catalyse such change and dynamism in an economic system? Why is that some crises simply reinforce trends already in train within a given country, when others precipitate profound transformation? These questions are important, because if one consults the historical record, particularly post-1945, most programmes of serious economic rejuvenation have been borne out of a period of tumult.

Several weeks ago, I visited Singapore, which provides the most instructive example of an existential crisis fomenting sweeping economic change. In Singapore’s case, the transformation was utterly comprehensive. In the 1960s, Singapore was ejected from its membership of Malaysia and found itself alone, relatively poor, and surrounded by larger (and at the time, bellicose) neighbours. But between 1960 and 2022, its GDP per capita grew by 1,800 per cent, and is now the fourth highest in the world. It enjoys a remarkable current account surplus, low taxes, high homeownership rates, some of the best health outcomes in the world, and levels of social cohesion and trust in government that western democracies can only dream of at present.

Singapore is not a democracy, and the context in which its transformation took place is radically different to that which developed economies must confront today, but anyone genuinely interested in how to turn around an ostensibly disastrous economic situation has to look at Singapore’s example for inspiration. Indeed, individuals on both the left and right of British politics speak of emulating the ‘Singaporean Model’. Dominic Cummings has even registered a new political organisation with Company House called ‘People’s Action Limited’, named after the party which has governed Singapore for its entire history as an independent country. So why did crisis in Singapore unleash such an incredible improvement in the country’s fortunes, rather than dragging it deeper into the mire?

I discovered the answer to this latter question in, of all places, a church. On the Sunday of my trip to Singapore, I attended St Andrew’s Cathedral, the main Anglican church on the island. For the first three quarters of the service, nothing seemed particularly out of place, save for the Chinese hymn books and slightly peculiar music. Then something quite extraordinary happened. From the pulpit, the deacon leading the prayers implored God to ensure that ‘Singapore remained an attractive place for foreign direct investment’. I looked up, and around me, churchgoers muttered, ‘father – hear our prayer’.

I thought I had perhaps misheard, until the deacon continued, praying that ‘the Singaporean workforce remained flexible and able to access the jobs of the future’; ‘father’, the congregation responded without pause for thought, ‘hear our prayer’.

It might seem impious that as profane a subject as economic growth was considered a legitimate topic for prayer, but that service tells you all you need to know about why Singaporean society has been able to transform its fortunes so comprehensively.

What those prayers revealed first and foremost was how culturally imbedded the Singaporean commitment to economic prosperity is. Productivity and growth are considered matters of existential importance in Singapore. Such a disposition stems from her earliest experiences as an independent country, and the strong belief that being internationally competitive and an attractive place for investment was not merely a matter of national pride but of survival, given the much larger Malaysian and Indonesian nations in its immediate environs.

These cultural attitudes are not ancient, though. They were melded and formed in the context of Singapore’s abrupt, and undesired, independence from Malaysia, which effectively expelled the island from their political union. Take something like Singapore’s high investment rate, which is financed by high savings. Was there something deep in the psyche that predisposed the Singaporean mind to thrift and long-term investment? No. Many of Singapore’s pro-growth cultural values – the values of hard-work and of self-sufficiency, and the sense that economic prosperity constituted a shared social mission – emerged in this period and were injected quite deliberately into the body politic by the People’s Action Party (PAP). Led by Lee Kuan Yew – one of the greatest statesmen in modern history and a political communicator of singular genius – and stocked by a cadre of talented and motivated individuals, the PAP had ideological cohesiveness, a clear plan for transforming Singaporean society, and a consistent and coherent communication strategy for persuading Singaporeans what was necessary to lift themselves out of their troubled state. And crucially, they intentionally set out to change Singaporean culture.

Indeed, that is possibly the greatest legacy that Lee left Singapore. Unlike other South-east or East Asian countries, Singapore is not littered with flags and posters and statues of their greatest leader (as per Lee’s request). Nor does his face adorn its banknotes. No, Lee envisaged a far more immanent and weighty presence in contemporary Singapore: the country’s mores, its values, its very language are suffused with his influence.

Singaporean thriftiness is almost entirely the product of government action – in this case high state-mandated contribution rates to the Central Provident Fund, a savings and pension scheme which all citizens are part of. The Singaporean savings and investment culture, like many other pro-growth temperaments in the country, was born out of a moment of trauma, but has stuck.

Or take Singaporean healthcare. In the UK, the government piles ever-increasing sums of cash into a health service that is delivering worsening outcomes, which means a higher, growth-sapping tax burden for British workers combined with a less healthy and thus less productive workforce. Singapore enjoys some of the best health outcomes in the world for a fraction of the cost as a proportion of the economy. The UK spends around 12 per cent of GDP on health care, for example, compared to six per cent in Singapore. Critical in these divergent experiences is a greater emphasis on personal responsibility in Singapore, which means strong incentives for people to take care of their own health, and consequently a lower taxation burden to fund public healthcare.

Similarly, Singapore has avoided a burgeoning welfare state because of its emphasis on personal responsibility and the value of work. While many OECD countries spend upwards of 40 per cent of GDP on social support, Singapore has managed to keep that figure down to around 15 per cent. Its central welfare programme – ‘Workfare’ – focuses support on funding training to get people into work, and then to top up their earnings once they are in work. Such an approach to payments depends on a deep cultural aversion to dependency and a societal consensus on the beneficial effects of employment for an individual’s character – outlooks fashioned in the aftermath of Singaporean independence.

In the Singaporean case, economic growth has proved to be an upshot of cultural values; it requires a critical mass of the population to hold a certain moral and political psychology, and a particular set of dispositions about enterprise and industry, risk, and change. Cultural values are sticky, and to change them, some moment of acute crisis, when it appears that the costs of continuing down a certain path are greater than shifting course, is required. Yet while crises are necessary for cultural change, they are not sufficient: they represent moments of maximal opportunity, though they must be exploited. And for this, skilled politicians with judgement and a strategy are required.

What are we to make of all this in the context of Britain’s present economic malaise? The UK has possessed the necessary conditions for economic transformation in the last two decades. There has been a pandemic, a financial crash, which at points threatened state collapse, and a constitutional revolution in the form of its departure from the European Union.

Each of these crises has simply ushered Britain along the path of stagnation and sluggishness. And the reason why this has been the case is that no fundamental change to the UK public’s cultural attitudes has taken place. Quite the opposite: the country has doubled down on a culture of risk aversion, on a politics of envy rather than abundance, and on a predilection for consumption over investment.

What Britain has lacked, above all, is political leaders with convictions, with judgement, and with a plan for reshaping the basic sentiments of the British people. There was no appetite after the Financial Crisis in 2008 for a basic rethink about what the state was actually for – austerity was simply an economic policy for doing less of the same thing. There was no attempt to imbed a new attitude of self-sufficiency post-Brexit, or to make Britain more competitive. There was no plan to capitalise on the pandemic to reconfigure the social contract between young taxpayers who pay for health and social care services, and older citizens who are their main users. Each time, it appears that key decision-makers reacted to events, rather than seizing them to achieve political ends.

Dominic Cummings is not alone in his admiration of Lee Kuan Yew and the People’s Action Party; more and more people are trying to distill what precisely it was that enabled them to succeed. The danger is that would-be reformers in Britain identify a package of specific policies that worked in Singapore and then try to apply them in the UK. Singapore’s social, political and economic situation was, however, different to Britain’s today. Not least the fact that Singapore has been governed by a single party for its entire history, and is far more sanguine about sacrificing personal freedoms in the pursuit of order than any western liberal democracy could plausibly be.

Instead, those looking for insights into how to instigate economic transformation should draw a different set of lessons: that to really change a country, you have to change its culture, and that there are particular moments when achieving that becomes possible. In an interview in 1994, Lee Kuan Yew argued that the scale of Singapore’s economic success depended on a culture that placed value on ‘learning and scholarship and hard work and thrift and deferment of present enjoyment for future gain’. And though he frequently attempted to connect these values with a far deeper East Asian intellectual inheritance, the truth is that it was Lee who articulated them to a population willing to listen.

Such cultural change has been achieved in Britain’s past, too. Thatcher’s economic programme – her monetary policy, privatisation, tax simplification, the big bang reforms – represented a profound reconfiguration of British society. Plenty of people looking for policy inspiration look back to her administration for a blueprint to follow (and many others look back to her time in office for errors to cautiously avoid).

Fewer people appreciate that Thatcher’s real mission was to fundamentally reshape British culture – to make it more enterprising, more responsible, more self-sufficient. ‘Economics are the method’, she said in 1981 – ‘the object is to change the soul.’ And she leveraged a palpable longing for the restoration of national pride and self-confidence, so bruised by Britain’s experience in the 1970s, to achieve this. Nigel Lawson, her longest-serving Chancellor, wrote similarly of the Thatcherite project – that it was an attempt to recapture the ‘moral initiative’ in Britain.

If Britain is to reckon with its present economic sickness, it will require a cultural transformation of a similar scale to that achieved by Margaret Thatcher in Britain and Lee Kuan Yew in Singapore. Without such a transformation, any efforts to secure a more prosperous country will be built on sand.


James Vitali