The administrative Prime Minister

March 17, 2004
Singapore Democrats

This post is at least a year old. Some of the links in this post may no longer work correctly.

Yawning Bread
http://www.yawningbread.org/index2.htm
March 2004

It is widely expected that some time this year, Goh Chok Tong will step down as Prime Minister. He has held office since 1990.

This is a personal, subjective, review of what I recall of his period in office. In a way, it is an attempt to divine what of his legacy is likely to endure.

The halo makers will say, “a kinder gentler” style will be remembered as his branding. Probably. But the value of that has always been, at least in my mind, very mixed. Sure, many of us were, by the late eighties, no longer keen on the brusque style of Lee Kuan Yew. We had been more than mildly horrified at ideas such as the graduate mother policy, and most alarmed at the use of the Internal Security Act on the so-called Marxist Catholics.

But in my books, a “kinder, gentler” style was still just style. The very idea of being kinder and gentler still presupposed a paternalistic government. The trade-off would be, “I’ll be sweet to you so that you won’t be unhappy that I control every part of your life and you can’t get rid of me.” A truly liberal polity wouldn’t need kindness or gentleness from rulers: free competition of political actors would allow people to kick out the ineffective ones.

* * * * *

So Goh was a safe pair of hands. He was not going to be a person who would rethink or reengineer the system that Lee had put in place. He wouldn’t go beyond smoothening the sharp edges.

In that way, he was a good administrator. He took a system and made it run as well as he could. As a rule, it does not occur to administrators to dismantle the system. By my assessment, he’s been a very conservative man, and some years on, we may begin to see this as the biggest defect of his stewardship.

Another huge weakness that Goh had and never overcame, was his complete lack of aptitude for public speaking. From his first year in office to his last, it was painful listening to him; it felt like listening to a tone-deaf man trying to sing. The harder he tried, the worse he became. His jokes were corny, his timing was off, his diction embarrassing, and the language often plodding. Worst of all, he could never convince listeners that he spoke with conviction.

It’s so typical of a technocratic state that we undervalue the importance of public speaking. In any real democracy, he would have gotten nowhere.

Yet, many anecdotes have recounted that he was a warm, personable man. Which must have been a refreshing change from working under Lee Kuan Yew. On the other hand, I sometimes wonder if being warm and personable is such a good attribute for leadership. Something tells me that Goh needed to be liked, and that trait, in politics, is a handicap.

Good leaders are usually assertive. While able to listen to others, they also believe in themselves. While hewing to simple, clear (and hopefully, noble) principles, they are also able to think in creative ways. Most important of all, they communicate inspiringly, sweeping others along towards the same goals.

That would not have been a description of Goh.

* * * * *

Early on in his tenure, Goh promised “more good years”. He told Singaporeans we would achieve the Swiss standard of living under his leadership.

That wasn’t so hard if one meant using cold GDP measures. A simple extrapolation of the growth rates in the early nineties indicated it was achievable. And while I don’t have the exact figures, I think by the mid-nineties, we kind of got to where Switzerland was in the late eighties.

But implicit in that promise was also a better quality of life: leisure, beauty, social services, civic consciousness. At the beginning, this was mentioned, but soon left aside. It was obvious Singaporeans would long be too grubby to be Swiss.

My recollection is that one of the spin-offs of this attempt to raise standards of living was the release of CPF [1] funds for housing. All of a sudden, from 1993 on, people could afford larger, fancier apartments. In a short space of a few years, property values doubled as money flooded into the housing market. Some got rich by selling, others locked themselves into 20-year mortgages confident that with “more good years”, they would always have enough money flowing into their CPF accounts to pay for their keep-up-with-the-Tans flat.

This would later prove to be a big policy mistake.

* * * * *

Yet electorally, Goh didn’t do too well. The opposition held their ground, and even got a few extra seats.

I think Goh felt spurned. The government reacted with what I would consider even worse missteps. It’s hard to tell from the outside how much of the subsequent policies were Goh’s ideas and how much came from other cabinet ministers (such as the ever-present Lee Kuan Yew). But the responses had a rather spiteful quality about them.

Gerrymandering increased to a shameless degree.

The constitution was twisted to create an elected President with a complex layer of powers, storing up contention and constitutional gridlock for the future (and amazingly, it happened under the watch of the very first elected President, Ong Teng Cheong, who on leaving office, complained bitterly that the provisions didn’t work well).

Not included in the promise was another very Swiss characteristic: direct democracy. Nobody dared suggest we should copy that!

And then more money was thrown into housing and construction. The Main Upgrading Program was launched. If you voted PAP, your apartments blocks would be upgraded and your property value would increase.

* * * * *

In 1994, if one were listening, one would have heard the first bruit of trouble. Paul Krugman, in his essay, The Myth of Asia’s Miracle, pointed out that the high growth rates of the Dragon and Tiger economies could be entirely explained by inputs alone. Billions of dollars of foreign investment and millions of young adults entering the modern workforce were what accounted for the impressive GDP growth figures. There were hardly any efficiency gains. People were just working harder, not smarter. The Asian economic miracle was all perspiration, no inspiration.

But we weren’t listening. We couldn’t afford to listen, for Paul Krugman’s other message was that this Asian values thing, this Asian model of governance (authoritarianism is good for economic growth) was bunkum. The “Asian miracle” was no more than classic economics: you put so much in, you get so much out.

Now this message can’t be right, we said. Of course, there was something morally superior about Asian values, and of course the discipline from tough unquestioned authority produces stunning economic results, we assured ourselves.

And what’s this business of efficiency gains? We had all manner of international comparison data to show we were at or near the top of various tables. If, by ‘efficiency’, Krugman meant that our workers needed to think, then he was being subversive. Our brilliant rulers will do the thinking. The lowly workers need only work hard.

Paul Krugman’s next point was that the dream trip was ending. His research indicated that the inputs were yielding declining rates of return. It was going to require more and more money and labour to get the same additional unit of economic growth. Since increases in input cannot fly off the graph, a crash had to happen sometime.

* * * * *

It happened in July 1997. The Asian financial crisis hit us like a tornado, and the halcyon days of economic miracles came to an end.

This would prove to be the midpoint of Goh’s premiership, and the point at which there would be a sharp change in Singapore’s fortunes.

Since 1997, all the chickens have been coming in to roost. Some of these birds we had seen coming, others slammed in from nowhere.

The Asian financial crisis meant that the part of our economy which was closely related to our neighbouring countries collapsed in a heap. Malaysia’s economy went into a tailspin and Kuala Lumpur barricaded itself with currency controls. Indonesia’s currency sank like lead, its economy melted and Suharto’s regime crashed.

We recovered briefly and chased after a new dream: China. We threw investment after investment into that country, only to get pathetic returns. Some, like Suzhou Industrial Park, we don’t even dare look at the balance sheet, lest we faint.

The other half of our economy, more linked to the US, was next in the firing line. Between the terrorist attack of 9/11 and the dotcom meltdown, we suffered another body blow. Our GDP shrank 1.9% in 2001.

Climbing out of that hole, we were knocked into yet another by SARS in 2003.

The above is a familiar litany. The government has told us again and again that sometimes external events are beyond our control.

What is not as often highlighted is that another big reason for our economic doldrums was the bursting of our homegrown bubble in the property and construction sector. It was inflated by the CPF-for-housing policy, further stoked by the upgrading programs, but once cashflow turned adverse from 1997 on, it burst. It’s been a serious drag on our economy for the last few years.

Worse yet, the legacy of high property values is making it difficult to adjust our cost structure to achieve competitiveness. We dare not bring property values down, as too many Singaporeans are locked into mortgages. At the same time, many face a cash-poor retirement, because their CPF savings have been depleted by housing payments. But how do we ask people to put aside more cash to rebuild their nest-eggs in the middle of a long-drawn recession? And even if we did, wouldn’t that so badly reduce consumption that the economy would suffer again?

Then there is the rise of China, and on the horizon, India. To their credit, the government had foreseen these two economic threats a long time ago. The answer is obvious. We need to move up the value chain, and fast.

Way back in 1997, Goh said in a major speech that Singapore needed to open up, and bring in lots of talent. The “cosmopolitan city” mantra was first chanted that year.

Since then, we have sat through the “government must take a back seat” chorus, and the “trim the banyan tree” refrain.

But honestly, it’s been mostly song and (bar-top) dance. Not a lot of the promises have actually been delivered.

The last seven years have been Goh’s worst years. I say this not because the economic conditions were so difficult, through they were. I say this because in these seven years, Goh’s own qualities stood in the way.

His economic thinkers had mapped out a strategy forward, but the ideas were perhaps too revolutionary for him. For a person who had spent virtually his entire (pre-ministerial) career in the civil service and statutory boards, notions of a bubbling, entrepreneurial, iconoclastic society must seem too chaotic, too liberal and too contentious to stomach.

And yet, every thinking person in Singapore realizes, this is where we need to get to, and the sooner the better. We also realize that in getting there, there will be a lot of pain and bewilderment in the adjustment process. And we’ve got to take Richard Florida’s message to heart [2].

Goh’s need to be liked must have meant a reluctance to push unpopular changes through. I know he made claims every now and then that he could be tough if necessary, but each time he said that, I was reminded of the general incredulity that greeted Nixon’s, “I’m not a crook.”

His poor oratorical skills meant he could never convincingly paint a vision, let alone inspire people. Remember how, in the midst of the economic gloom his most famous phrase was “stayers and quitters”? Stirring words, they most certainly weren’t!

Finally, Goh’s innate conservatism meant that implementation-wise, the government was always doing too little too late.

It’s taken years to shake up education policy, especially the rigid mother-tongue rules. They are still picking piecemeal at bureaucratic red tape. Government-linked companies are as stifling to the market as ever, and controls on a swathe of activities that can potentially challenge the government’s hegemony of power, e.g. civil society groups, the media and the arts, remain comprehensively in place, even though these very controls act as brakes on creativity.

And it seems they’ve yet to read Richard Florida’s book.

I wonder if the administrator in him meant he never really grasped that a revolution in the governance model was essential to the strategy. That Singapore’s future required him to tear down what he inherited from Lee.

Or maybe, he wasn’t allowed to. But by saying this I would be stepping into Catherine Lim’s shoes [3]. I shall decline the honour. So I take it back. Please note, I didn’t say what I said.

Regardless, I can’t help but feel we had someone who meant well, but was out of his depth. We had an administrator trying to do a leader’s job. A status quo man not quite knowing how to make revolution.

[Note to the discussion on upgrading: “My inside sources tell me that the Main Upgrading Program has never been cost-effective. Retrofitting a building is usually very costly. It is cheaper to tear down the whole block and rebuild a new one from scratch.

At first, this idea wasn’t popular with the political masters. They didn’t want their constituents moved – it would defeat the vote-buying strategy. And anyway, people didn’t like to be told to move out of their homes, just because some bureaucrat wanted to demolish and rebuild at that location.

Now, however, most residents dread the idea of Upgrading. The inconvenience of workers messing about your home while you’re trying to live in it, the delays when contractors go bust, the noise and the dust, are all unbearable.

Worse, the idea of paying a portion for the cost of upgrading is unacceptable. The government says “it’s subsidized!” The people hear, “pay up your share!” “

Footnotes

[1]CPF = Central Provident Fund, a centralised pension fund for all Singaporeans with mandatory contributions

[2]Richard Florida, in his book, The Rise of the Creative Class, argued that cities that relished diversity, welcomed counter-cultural types and were accepting of gays and lesbians, tended to have the buzz that fosters creativity.

[3]Catherine Lim, a writer, suggested, a few years into Goh’s tenure, that he wasn’t fully in charge, but that the Senior Minister, Lee Kuan Yew, still called the shots. The government reacted furiously to her suggestion and labelled such comments out of bounds. Singaporeans are hence forbidden to voice such thoughts.