[Yu Kun-ha] Singapore’s leader: Catch the wind in your sails

Singapore marks the 50th anniversary of its independence next year. The past five decades have witnessed the small island city-state rise as a thriving global business hub crowded with multinational corporations.

When Singapore was separated from Malaysia in 1965, its GDP per capita was $511. The figure surpassed the $50,000 mark in 2012, making Singapore one of the richest countries in the world.

Singapore is the envy of developing countries in many ways. Many Korean policymakers also regard it as a country to emulate. They are especially envious of its sustained economic growth.

Unlike other advanced economies, Singapore has continued to grow at a relatively fast pace even after its per capita GDP hit $30,000. In sharp contrast, Korea’s economic growth has already slowed significantly even before reaching that level.

What is the secret of Singapore’s outstanding performance? Many factors could be cited, including its geographical location, business-friendly environment, efficient and clean government and advanced infrastructure.

Yet Lee Hsien Loong, Singapore’s prime minister since 2004, cited, among other things, its skilled workforce. Lee recently shared his thoughts on Singapore’s development and other issues with editors of Asia’s major English-language newspapers, including The Korea Herald.

The newspapers are all members of the Asia News Network, an organization founded in 1999 to promote editorial content exchanges. ANN currently has 22 members, including China Daily (China), The Straits Times (Singapore), The Star (Malaysia) and The Jakarta Post (Indonesia).

“We have worked very hard to educate and upgrade our own people,” said Lee during the roundtable held at his office on April 8. “We sought to build one of the best workforces in the world.”

He said the Singaporean government had sought to make its workers attractive to multinational companies not only in terms of education and diligence but in terms of the ability to “work with the unions and cooperate with the employers to yield win-win results which are beneficial in the long term.”

To Lee, worker education is a continuing task. Since Singapore can only bring in a limited number of foreign workers, it needs to enhance the productivity and skills of its own people in order to keep growing and attain higher standards of living.

Singapore’s sustained economic growth also owes a lot to the government’s ability to draw up a well-conceived development plan and implement it consistently.

A case in point is the Marina Bay development project, a huge, long-term urban renewal development plan calling for the construction of a downtown area from scratch on a sprawling 360 hectare reclaimed site.

The plan envisions a dynamic waterfront city center with business, residential, leisure and entertainment facilities. The key concept is to make the area a place where people can “explore, exchange and entertain” ― that is, to create a place where people can live, work and play.

The plan included the construction of two integrated casino resorts: Marina Bay Sands and Resort World Sentosa. The casino scheme has proved a huge success. The two resorts, which opened in 2010, have brought huge economic benefits to Singapore.

The Singaporean government expected the two resorts to generate $2 billion around 2015. But the figure topped $3 billion in 2010. Last year, their contribution to Singapore’s tourism revenue exceeded $6 billion.

The Marina Bay project is still a work in progress but the casino resorts and other iconic structures and world-class entertainment and leisure facilities built in the area are already attracting an unending stream of tourists.

The large-scale development project faced skepticism at the beginning. But Lee said he decided to go ahead with it because he recognized a growth opportunity and wanted to seize it. He proposed legalizing casinos in 2005.

“We decided we would catch the wind when it blew,” Lee said. “Because tomorrow, I don’t know whether the opportunity would be there.”

Thanks to the well-advised decision, Lee said, a significant part of the development plan has been realized within 10 years, defying expectations that it would take 20 to 30 years to get so much work done.

Looking back over the past decade, Lee said that Singapore has “done economically better than we expected, grown faster.” It was partly because “the winds were favorable” but more because the Singaporean government has risen to the challenge.

All of this illustrates how much a country’s economic growth depends on the ability of its government to draft a well-designed long-term development strategy and push for it. This point should be brought home to Korean policymakers and political leaders.

The successful development of Marina Bay contrasts sharply with the failure of the Yongsan Dreamhub project in Seoul. A group of public and private companies sought to develop the Yongsan Station area into an international business district.

But the $27 billion project, first proposed in 2006, was canceled last year due to financing difficulties. Had it been carried out as planned, it would have changed Seoul’s skyline.

The collapse of the project suggests that it was ill-conceived from the beginning. Despite the project’s huge scale, the Korean government chose to stay away from it from the onset. It had neither the will nor the cash to promote it.

Korea has recently allowed a foreign investor to operate a foreigners-only casino near Incheon International Airport as part of its campaign to boost the tourism industry.

Korea’s move was inspired by Singapore’s success story. But in Singapore’s case, the two casino resorts were only one element of the large Marina Bay urban renewal project. In this regard, it is uncertain whether Korea’s casino project will also succeed.

While Singapore has achieved more success than its leaders expected, the city-state is not without its problems. One such problem is the widening wealth gap. Singapore has one of the highest income inequality levels among developed countries.

During the roundtable, Lee said it was important for Singaporeans to have roots and feel a sense of belonging in the country as Singapore was what he called an “artificial country,” a country lacking cultural traditions that bind people together.

Yet a high level of income inequality tends to make low-income people feel like they don’t belong. If many people feel this way, it weakens social unity and increases social tensions.

Aware of the problem, however, the Singaporean government has started to take steps to improve the situation of low-income households.

By Yu Kun-ha

Yu Kun-ha is chief editorial writer of The Korea Herald. He can be reached at khyu@heraldcorp.com. ― Ed.