global-is-asian 2017 magazine

Rise of Asia | Future of Governance | Singapore Case Studies

2017

BOOKS PUBLISHED IN 2017

By Kenneth Paul Tan, Governing Global-City Singapore: Legacies and futures after Lee Kuan Yew, Routledge.

Edited by Carol Soon and Gillian Koh, Civil Society and the State in Singapore, World Scientific.

By Kishore Mahbubani and Jeffery Sng, The Asean Miracle: A Catalyst for Peace, NUS Press: Ridge Books.

By Zeger van der Wal, The 21st Century Public Manager (The Public Management and Leadership Series), Palgrave.

By Vinod Thomas, Climate Change and Natural Disasters, Transaction Publishers.

By Yu-Min Joo et al, Mega-Events and Mega-Ambitions: South Korea’s Rise and the Strategic Use of the Big Four Events, Palgrave.

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FOREWORD We live in absolutely amazing times. Several global structural revolutions are taking place at the same time. First, we are seeing the natural return of Asia. From 1 to 1820, China and India were always the world’s largest economies. By 2050, or earlier, we will return to this historical norm. Second, the world is shrinking. Our vast world is becoming a small interdependent global village. All villages need Village Councils.

Hence we have to strengthen the UN, not weaken it. Third, technology is disrupting everything. By 2020, there will be over 7 billion cell phones. Soon there will be more cell phones than people on our planet.

Adjusting to any one of these structural revolutions would be a huge challenge.

Adjusting to all of them at the same time is almost mission impossible. This explains, in part, why we have bewildering developments, like Brexit and Trump. The sudden isolation of Qatar by its neighbours was also a shock.

Understanding this bewildering world will not be easy. The Western world produces a torrent of analysis. By contrast, despite the economic resurgence of Asia, there are few Asian voices to

match this Western media torrent. This is where our flagship content hub Global-is-Asian can make a huge difference. Please read it to get a different perspective.

The name Global-is-Asian is not just a clever pun on Globalisation. It also sends a loud signal that the future of Globalisation (which is now threatened by Western populist forces) may be determined by the thoughts and actions of Asians. We hope that this printed edition will give you a flavour of the rich discussions that we have been having on our content hub.

I hope you will enjoy reading it. Do send us your comments.

With warm regards,

Dean of the Lee Kuan Yew School of Public Policy, National University of Singapore

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CONTENTS

05

TIME FOR AMERICA TO FOLLOW CHINA’S LEAD

09

CHINA’S BRI: OPPORTUNITIES AND CHALLENGES

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13

CAN ASIA LEAD THE WORLD? ONLY WHEN IT HAS A WINNING STORY TO TELL

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21

HOW FEAR, LUCK AND GOLF BROUGHT ASEAN TOGETHER

Managing Editor Shinae Baek sppbsa@nus.edu.sg

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THE FUTURE OF GOVERNMENT

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RESISTING AUTHORITARIAN POPULISM: LESSONS FROM & FOR SINGAPORE

HEALTHCARE: SINGAPORE’S SUCCESS STORY

IS BLOCKCHAIN A ‘TRUST MACHINE’ FOR THE DIGITAL FUTURE?

Editing and Design King Content Editorial Office Lee Kuan Yew School of Public Policy, National University of Singapore 469C Bukit Timah Road Singapore 259772 No part of this publication may be reproduced in whole or in part without written permission from the Managing Editor © 2017, Lee Kuan Yew School of Public Policy, National University of Singapore.

The views and opinions expressed in this publication reflect the authors’ point of view and not necessarily those of the Lee Kuan Yew School of Public Policy, National University of Singapore.

If you would like to contribute to Global-is-Asian, please e-mail the Editor at globalisasian@nus.edu.sg.

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THE SCIENCE AND ART OF DATA ANALYTICS

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GOVERNMENT PLANNING PAVES THE WAY FOR SINGAPORE’S PETROCHEMICAL SUCCESS

ISSN 1793-8902

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TIME FOR AMERICA TO FOLLOW CHINA’S LEAD

BY KISHORE MAHBUBANI

A SUPERPOWER IN RELATIVE DECLINE SHOULD SEEK TO STRENGTHEN THE MULTILATERAL ORDER, AS CHINA IS DOING. In a 2005 speech before the National Committee on United States-China Relations, former World Bank president Robert Zoellick famously called upon the Chinese government to become a responsible stakeholder in the global system, and to work with other international powers to maintain stability and security around the world. One can assume that when Mr Zoellick delivered his speech on that autumn day in New York, there was no doubt in his mind – nor in the minds of most U.S. leaders and policymakers – that the U.S. was in fact the responsible stakeholder in the international system, and that China was not.

However, last year’s election of Donald Trump has spurred a remarkable reversal in global perceptions of the U.S. and China.

President Trump has loudly proclaimed that he will pursue unilateralist “America First” policies, and he has also threatened to withdraw the U.S. from the World Trade Organisation (WTO).

In an interview last year with NBC’s “Meet the Press”, he said: “We’re going to renegotiate or we’re going to pull out. These trade deals are a disaster. The World Trade Organisation is a disaster.”

By contrast, after the two brilliant speeches delivered by Chinese President Xi Jinping in 05

Davos and in Geneva in January this year, China has projected itself as a defender of the prevailing multilateral order. Zoellick would not be able to deliver his 2005 speech in 2017. The roles have reversed.

CLINTON’S SUBTLE WARNING This need not and should not have happened. As a power that is – by President Trump’s own admission – in relative decline, it is increasingly in the national interest of the U.S. to strengthen multilateral rules and processes. Articulating this truth in a visionary 2003 speech at Yale University, former President Bill Clinton said: “If you believe that maintaining power and control and absolute freedom of movement and sovereignty is important to your country’s future, there’s nothing inconsistent in that. We’re the biggest, most powerful country in the world now. We’ve got the juice and we’re going to use it… But if you believe that we should be trying to create a world with rules and partnerships and habits of behaviour that we would like to live in when we’re no longer the military, political, economic superpower in the world, then you wouldn’t do that. It just depends on what you believe.”

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His audience might not have been aware at the time, but this was a cunning bit of advice from the once president. Clinton was telling them to prepare for a world in which the U.S. is the No. 2 global power, and China is No. 1. As the world’s second power, the U.S. would prefer to live with a No. 1 power that supports “a world with rules and partnerships and habits of behaviour” that would make the world a more orderly place.

Even more cunningly, Clinton was suggesting that the U.S. could slip the “handcuffs” of multilateral rules and processes more effectively onto China if the U.S. slipped those very same handcuffs on itself while it was still the world’s pre-eminent power.

“If you believe that maintaining power and control and absolute freedom of movement and sovereignty is important to your country’s future, there’s nothing inconsistent in that. We’re the biggest, most powerful country in the world now.

We’ve got the juice and we’re going to use it… But if you believe that we should be trying to create a world with rules and partnerships and habits of behaviour that we would like to live in when we’re no longer the military, political, economic superpower in the world, then you wouldn’t do that. It just depends on what you believe.”

-Bill Clinton

However, Clinton’s speech would have been more effective had he honestly admitted that it has been a consistent U.S. policy to weaken – rather than strengthen – multilateral rules and institutions. This was a dirty little secret I discovered while serving twice as Singapore’s ambassador to the United Nations (UN), from 1984 to 1989 and again from 1998 to 2004.

This policy was also made plain when the U.S. walked away from the World Court in 1985, refused to ratify the 1982 UN Convention on the Law of the Sea, and tried to undermine the International Criminal Court in 2002. America has also consistently tried to pick weak and spineless UN secretaries-general to head the global body.

Former U.S. ambassador to the United Nations John Bolton admitted this publicly in his memoirs when he quoted then Secretary of State Condoleezza Rice, who said: “I’m not sure we want a strong secretary-general.”

Unfortunately, such candour is a rarity from U.S. leaders.

Paradoxically, Trump may emerge as the most honest and forthright U.S. president on the issue of multilateralism. He has made public his disdain for multilateral rules and institutions. He has denounced the Trans-Pacific Partnership 06

(TPP) and threatened to walk away from commitments that the U.S. had made on climate change. At a White House briefing earlier this year, Mick Mulvaney, director of the Office of Management and Budget, said: “As to climate change, I think the President was fairly straightforward: We’re not spending money on that any more.”

MULTILATERAL CHINA Such rhetoric should have been music to Beijing’s ears. As a rising power poised to become the world’s largest economy within a decade or so, it would be in China’s interest, one might argue, to see international institutions such as the UN weakened and marginalised. This is, after all, exactly what the U.S. has done for decades.

But China chose a different track. Its decision to take the opposite course of strengthening rather than weakening multilateral institutions should be seen as a surprising, even shocking, decision.

Why is China not following in the footsteps of the prevailing No. 1 power?

BUT CHINA CHOSE A DIFFERENT TRACK. ITS DECISION TO TAKE THE OPPOSITE COURSE OF STRENGTHENING RATHER THAN WEAKENING MULTILATERAL INSTITUTIONS SHOULD BE SEEN AS A SURPRISING, EVEN SHOCKING, DECISION. WHY IS CHINA NOT FOLLOWING IN THE FOOTSTEPS OF THE PREVAILING NO. 1 POWER? 07

One possible reason China is not emulating the U.S. in undermining multilateralism is that the two countries have very different conceptions of their respective roles in the world. The U.S. sees itself as an “exceptional” country, hence it believes that it has a global responsibility to transform the world. It refuses to be constrained by multilateral rules when it interferes in the internal affairs of other countries. It has promoted many so-called colour revolutions, including the 2005 Tulip Revolution in Kyrgyzstan and the 2011 Arab Spring revolution in Egypt. No other country shares this messianic impulse of the U.S..

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By contrast, China is only interested in improving the livelihoods of its 1.4 billion citizens (or one-fifth of the world’s population).

After a century and a half of “hell” – from the First Opium War in 1839 through to the end of the Cultural Revolution in 1976 – China experienced “heaven” and enjoyed the world’s fastest economic growth, especially after joining the global multilateral order that the West gifted to the world after World War II. No country has benefited more from the WTO than China has.

This is why China is now the world’s No. 1 trading power.

Having enjoyed many remarkable benefits by walking away from Mao Zedong’s isolationist policies and towards Deng Xiaoping’s integrationist policies, China knows from first-hand experience that integration into a rules-based multilateral order has served it well.

In another remarkable reversal, the values and benefits of free trade have been documented and explained by the U.S., not Chinese, thinkers. Yet today, it is politically toxic in the U.S. to defend free trade agreements (FTA) like the North American Free Trade Agreement and the TPP. By contrast, China is enthusiastically signing more and more free trade pacts. Since it joined the WTO in 2001, it has signed 14 FTAs with countries as diverse as Australia, South Korea and Peru. In 2002, China also agreed to a broader free trade area with the 10-member Association of Southeast Asian Nations (ASEAN).

CAN WASHINGTON FOLLOW BEIJING? It was, therefore, a mistake for U.S. pundits and policymakers to pooh-pooh the two speeches made by Xi earlier this year. They reflect a well-considered position that China benefits from a stronger rules-based multilateral order.

Similarly, it was also unwise of the U.S. media to excoriate Secretary of State Rex Tillerson for characterising the U.S.-China relationship as a very positive one built on “non-conflict, non-confrontation, mutual respect and win-win cooperation”, as is common in Chinese policymaking circles. Article 2 of the UN Charter, after all, spells out the principles of international cooperation, and Tillerson’s statements were only a reiteration of these principles.

Sadly, Tillerson was accused in the West of kowtowing to China. The clear assumption behind these criticisms is that the U.S. is pursuing the correct international policies while China is pursuing the wrong ones. However, the U.S. clearly remains committed to weakening and undermining multilateral rules and processes, while China still believes that it is in its national interest to do the opposite.

As Clinton wisely advised, it is now in the national interest of the U.S. to change course and strengthen multilateral rules and institutions. In an atmosphere of global financial crises and climate change, pandemics and terrorism, and numerous other international challenges such as famine and cyber security, it is high time that the U.S. embraced global institutions and became a responsible stakeholder in the global system once more.

Kishore Mahbubani is Dean of the Lee Kuan Yew School of Public Policy.

This piece was published in The Straits Times on 28 April 2017.

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CHINA’S BRI: OPPORTUNITIES AND CHALLENGES

Is the Belt and Road Initiative (BRI) the beckoning call for China to become a global hegemon? Will it be successful in reviving China’s economic and soft power ambition on the world stage? And finally, what are the challenges and problems with BRI in its current state? Questions like these and many more were discussed at an evening talk titled, ‘Understanding and Securing the Belt and Road: The View from the Ground’, held on 23 January 2017 at the Lee Kuan Yew School of Public Policy.

Khong Yuen Foong, Li Ka Shing Professor of 09

Political Science, and Raffaello Pantucci, Director of International Security Studies at the Royal United Services Institute (RUSI), discussed the historical and current economic trajectory that BRI has undertaken, and will continue to tread in the future.

They highlighted the two major routes that China has planned under BRI – one through land, passing across South Asia into Central Asia, and the other involving maritime routes reaching all the way to African coasts.

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Khong elaborated the main themes of China’s geopolitics and economics, highlighting the economic opportunity that BRI presents among nearly 64 nations as the way for China to become a hegemon in Asia and beyond. He stated three reasons why BRI would drive China’s return to greatness.

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Geopolitical dimension of BRI, which places China in the economic-political orbit of many Asian and European powers, has provided China with a political hold over land and possibly the maritime routes.

BRI acts as a link between economic and political partnerships in the region. Historically, nations tended to align themselves strategically towards their economic partners. However, in recent times, China has overtaken the U.S. to become the No.1 trading partner in the region. With this development, trading partners of China have to be more sensitive towards its political interests.

China’s soft power might lie in establishing BRI through building infrastructure and harnessing connections in untapped markets in the partnering countries. BRI is also based on China’s historical narrative of the Golden Age, which consisted of the ancient silk road and maritime routes.

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However, Khong did express doubts about BRI’s success, with regard to the U.S.’ strategic worries, including India-Pakistan border issues in disputed territories of Kashmir BRI links pass through, Russia’s reservations about China’s expansion into Asia, and a possible resentment against this project from some Muslim countries in South Asia.

He also emphasised the relevance of BRI in the light of the now-failed Trans-Pacific Partnership (TPP). TPP would have been a channel of exercising the U.S.’ economic centrality in the Asian region, with countries like Singapore, New Zealand and Japan as part of the deal.

However, in the U.S.’ absence, the regionaleconomic architecture will be moulded by Chinese initiatives such as the Regional Comprehensive Economic Partnership (RCEP), Asian Infrastructure Investment Bank (AIIB) and Free Trade Area of the Asia-Pacific (FTAAP), among others.

In addition, Pantucci highlighted the role of the Xinjiang region (north-western China) through

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the establishment of BRI. Xinjiang has undergone ethnic tensions in the past and has had limited socio-economic development. China has therefore chartered trade corridors from Xinjiang to Central Asian countries such as Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan.

IN THE U.S.’ ABSENCE, THE REGIONAL-ECONOMIC ARCHITECTURE WILL BE MOULDED BY CHINESE INITIATIVES.

However, despite planned economic channels, he pointed out that BRI is facing some problems, potentially in the area of security.

FIRST

There are separatist groups and deeply divided ethnic communities operating in Central and South Asia, such as the Balochistan province of Pakistan where the China-Pakistan Economic Corridor (CPEC) is planned. The separatists consider CPEC, which is part of BRI, as Pakistani territory. This makes Chinese establishments targets in that area.

SECOND

Terrorism is also an issue to be concerned about. Places where domestic terrorist organisations link with international ones like Al-Qaeda and the Islamic State could harbour resentment against Chinese establishments.

THIRD

Local political disputes between countries in Central Asia can create problems for the successful implementation BRI. Such issues include cooperation and connectivity between neighbouring countries, slowing down BRI’s pace of development and trade in the region.

FOURTH

Local benefits are limited in large infrastructural projects such as the ones in BRI that require Chinese expertise, and this could deepen the existing inequalities in the region.

In conclusion, both speakers agreed that opportunities and challenges exist for China with its ambitious BRI, and it remains to be seen how successful it will be for the partnering nations and the Asian region as a whole.

This article is written by Mariyam Raza Haider, a Master of Public Policy (Class of 2017) student at the Lee Kuan Yew School of Public Policy.

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CAN ASIA LEAD THE WORLD? ONLY WHEN IT HAS A WINNING STORY TO TELL

BY DANNY QUAH

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GLOBAL LEADERSHIP WILL COME WHEN THE REGION HAS AMASSED ENOUGH SOFT POWER TO WEAVE AN ASIAN NARRATIVE THAT COMMANDS RESPECT.

Can Asia lead the world? Some Asian writers have begun to argue that the time has come for Asia to champion the liberal world order that allowed it to develop and prosper. But how?

To begin, Asia can simply support that order and talk it up. But Asia already does that, and powerfully. Asia provides proof of concept by showing how economic success comes with being part of that liberal world order.

But more importantly, Asia can champion the liberal world order by rising to lead it.

Leadership does not mean brandishing more guns and bombs, wielding greater economic and financial firepower, or having a bigger geographical and population footprint. If that were what it takes, world order would be liberal only as farce, and already damaged beyond repair.

Notwithstanding the last 50 years of U.S.-centred unipolarity, in a liberal world order, leadership does not, by logic or necessity, come with being the dominant power. Instead, leadership just means calling the meeting, lighting signposts in a complex uncertain world, being the adult in the room. This view of leadership does not deny collaboration. It simply says someone needs to make the first move.

For Asia to succeed at this, it must do two things: first, it must continue its trajectory of economic success; no one listens to failure.

Second, Asia needs a story.

There was a time when America had a story. Lee Kuan Yew once told Joseph Nye that on the grand chessboard of world order, America would always be ahead of China. This was because while China might boast a population of 1.3 billion people, America could draw on the talents and goodwill of the more than seven billion of all humanity.

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America in which there was an uncensored and self-disciplined press that valiantly held power to account. That America had an independent judiciary and a system of governance that separated powers of rule and provided checks and balances. That America had democratic institutions that struggled and evolved to defend its people against the worst ravages of xenophobia and racism.

In that account, Lee reckoned America had a good story but China did not.

Does Asia?

President Donald Trump could well be steering the U.S. towards protectionism but, still, many observers will ask if Asia’s values are genuinely compatible with those of the rest of the world, even as Asia casts itself as champion of internationalism, free trade and the liberal world order.

So, for Asia to lead, it is necessary to show its economic prowess. However, that is not sufficient. Asia needs a story of attraction, respect and liberal compatibility. Asia needs a soft power story.

More than ever, the significance of this reasoning is evident. America’s hard power – its military footprint, its economic might – did not vanish overnight. Instead, what has driven re-examination of America’s centrality in the world order is the dramatic drawing down of the respect and admiration it attracts from the rest of the world.

America’s story used to be a narrative of openness and liberal values. That was an 15

None of this is to suggest that the world bought wholesale into what is sometimes referred to as the Washington Consensus and the U.S. version of liberal democracy. The most enduring traits of liberal democracy do not require, as a matter of logic, an extreme interpretation of a rights-based social contract, ballot-box elections, or a ‘one person, one vote’, direct deliberative democracy.

Many people in the world are satisfied with a duties-based, rather than rights-based, contract with their government. Many in the world see hypocrisy when liberal parts of the West decried how the popular vote was ignored in Trump’s Electoral College victory, while at the same time

DO WESTERN LIBERALS WANT ‘ONE PERSON, ONE VOTE’ ONLY WHEN IT’S THEIR SIDE THAT WINS?

WHEN TRUMP AND HIS CIRCLE DISPLAY XENOPHOBIA, RACISM, ANTI-ISLAMIC POLICIES, AND NATIONALIST POPULISM… ASIA MUST NOT SAY, ‘WE SEE NO PROBLEM WITH THAT’.

lamenting how the Brexit referendum was irresponsibly thrown open to ordinary people to decide, rather than left to their elected representatives.

creativity one needs space to rebel flies in the face of all manner of important disciplined scientific investigation. All these sit easily with and, indeed, are on ample offer in Asia.

The most enduring values of liberal democracy are simply what get schoolchildren through sports day: there is a level playing field; no one is excluded from playing; everyone gets a fair shot. The rules are transparent, and cannot be changed mid-contest. Afterwards, there are winners and losers, and that’s OK. Everyone competes fiercely to win, but those who don’t succeed wish the winners well, and exit on friendly terms. Winners behave with good grace; they do not bully or display arrogance.

But certain other things need to be excluded right away from Asia’s narrative. When Trump and his circle display xenophobia, racism, anti-Islamic policies, nationalist populism and an extreme zero-sum mentality, Asia must not say, “we see no problem with that”. When Trump undermines the free press and subverts America’s democratic institutions or its judiciary, Asia cannot say, “we are OK with that; we have the same problems here”. Asia must not say, “let’s focus on Trump’s business acumen and deal-making instincts” – for that, too, is what Asia knows best and likes most.

The form that Asia’s soft power story will take remains a work in progress: Asia’s intellectuals still need to forge that vision. In some circumstances, networks can usefully replace multilateral agreements. In many situations, a duties-based social understanding can perfectly substitute for a rights-based one. Reverence for learning and scholarship is not a Western monopoly. Gentle pluralism beats arrogant universalism. And the fetishism that for

These ideas have no place in Asia’s soft-power narrative; Asia must categorically reject them.

Otherwise, Asia has no story.

This piece was published in South China Morning Post on 7 April 2017.

Danny Quah is Li Ka Shing Professor of Economics at the Lee Kuan Yew School of Public Policy.

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HOW FEAR, LUCK & GOLF BROUGHT

ASEAN TOGETHER

BY KISHORE MAHBUBANI

THE ASSOCIATION OF SOUTHEAST ASIAN NATIONS (ASEAN) PROVIDES AN IMPORTANT SECURITY UMBRELLA FOR SINGAPORE AND THE REGION. PEOPLE, STOP POKING HOLES IN THIS UMBRELLA.

Imagine Singapore in December. The Northeast Monsoon is approaching. Heavy rains are coming. Someone has gifted you a strong umbrella. The rational thing to do would be to preserve and protect this umbrella. The irrational thing to do would be to poke holes in this umbrella.

Yet, many Singaporeans today are doing this irrational thing. They have been gifted a wonderful geopolitical umbrella. It is called ASEAN. Instead of strengthening it, they are poking holes in it. And they are poking holes just as new 17

geopolitical storms are coming to our region, in the form of enhanced U.S.-China rivalry.

Why are Singaporeans behaving irrationally?

The simple answer is ignorance. Any simple survey would show that most Singaporeans know next to nothing about ASEAN. Many can’t recognise the ASEAN flag.

President of the Institute of Singapore Chartered Accountants, Gerard Ee, was dead right when he said at a recent panel discussion that Singaporeans should understand the region better. Singaporeans, he said, “do not understand the cultures and values of different people in the region that we

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are trying to form a bond with, and we might inadvertently end up making enemies rather than friends. So I wish all the schools would go back to teaching the history of all the ASEAN countries so that we appreciate where they are coming from.”

Even more sadly, the little that Singaporeans know about ASEAN comes from the usual jaundiced Anglo-Saxon media coverage of ASEAN. To combat this ignorance, a childhood friend of mine, Jeffery Sng (with whom I grew up in Onan Road in the 1950s and 1960s) and I decided to publish a book on ASEAN to coincide with ASEAN’s 50th anniversary on 8th August this year. It is called The ASEAN Miracle: A Catalyst for Peace, and it has been published by NUS Press in April 2017. The goal of this article is to provide a flavour of the book.

One simple way of understanding ASEAN is to apply the 3M formula. 3M here does not refer to the Minnesotan manufacturer of sturdy products.

The three “M” words to understand ASEAN are Miracle, Mystifying and Money.

ASEAN MIRACLE Why is ASEAN a miracle? First, when it was born in 1967, everyone expected it to fail. Its two predecessors, ASA (Association of Southeast Asia) and Maphilindo (Malaya-Philippines-Indonesia), died within two years. No one dreamt in 1967 that ASEAN would hit 50. But it has.

Second, all the five founding members had bilateral disputes with each other in 1967.

Indonesia had confronted Malaysia. Singapore had just had a bitter separation from Malaysia.

The Philippines claimed Sabah from Malaysia and the south Thailand insurgency was brewing on the Thai-Malaysia border.

Third, the region was in turmoil. Communist parties were active. The Vietnam War was gaining momentum. The Tet Offensive took place five months after ASEAN’s birth.

Fourth, Southeast Asia is the most culturally diverse region on earth. If you were looking for a place to start regional cooperation, the last place you would pick is Southeast Asia. In short, there were many reasons why ASEAN should have failed. And I could give a few more. This is why ASEAN’s success is a true miracle.

FEAR, NOT LOVE, BROUGHT ASEAN TOGETHER Yet, this miracle is also mystifying. No one really understands why ASEAN has emerged as the world’s most improbable success story. Our book cannot possibly provide a definitive explanation. Future historians will have to do this. Nonetheless, we try to provide a theory on why ASEAN succeeded. This theory is based on a few four-letter words. The first begins with “f”.

It is fear.

Given the major bilateral disputes they had with each other, it was not love that brought together the five founding members: Indonesia, Malaysia, the Philippines, Singapore and Thailand. It was fear of communist expansion. Indeed, these five countries were often referred to as the non-communist “dominoes” waiting to fall in the face of communist expansion. As Jeffery and I both lived through this period, we experienced this fear. It was real.

The second four-letter word is luck. ASEAN was lucky on several counts, especially in the 1980s.

After Vietnam defeated the U.S. in 1975, it became arrogant. It invaded Cambodia in 1978.

This triggered a geopolitical alliance between the 18

U.S., China and ASEAN. The three worked closely together. I experienced it first hand when I served as Singapore’s Ambassador to the United Nations (UN) from 1984 to 1989. This strengthened ASEAN considerably. It was geopolitical luck that drew us together.

ASEAN was also lucky to have unusually strong leaders, especially in the 1980s, including Indonesia’s Suharto, Singapore’s Lee Kuan Yew and Malaysia’s Mahathir Mohamad. Strong leaders don’t have to worry unduly about domestic political pressures – they can focus on doing the right thing for the region. Indonesian leadership was key. Suharto wisely decided that the best way for ASEAN to grow was for Indonesia to take a back seat. It allowed smaller countries, like Malaysia and Singapore, to play a stronger role. As our book documents, it was also Suharto who made the fateful decision that Indonesia should join the rest of ASEAN in opposing the Vietnamese invasion. If Indonesia had vacillated, ASEAN would not have succeeded. In short, ASEAN avoided many potential disasters. It was lucky.

The third four-letter word will make you laugh.

It is golf. When I mention the role of golf, many in the West think I am joking. Yet, I am dead serious. Multilateral negotiations are inherently messy. If you want to argue about texts of documents, you can go on for hours. Yet, somehow, after a golf game with my then ASEAN senior official counterparts in the 1990s, we would have a beer and reach agreements very quickly. The camaraderie produced by golf did the trick.

One recent miracle ASEAN achieved was the conclusion of the ASEAN Charter within about a year in 2007. This achievement should be recorded in the Guinness Book of Records. And how was agreement reached so quickly? Former deputy prime minister S. Jayakumar was a member of the Eminent Persons Group that was 19

set up to begin the discussions of the charter. In our book, we quote him as saying: “It helped that Ramos, Ali Alatas, Musa, Jock Seng and I had also been long-time golf buddies!” These were Fidel Ramos of the Philippines, Ali Alatas of Indonesia, Musa Hitam of Malaysia and Lim Jock Seng of Brunei.

MORE RESOURCES NEEDED Yet, even though ASEAN has succeeded in many ways, it continues to face many perils. Our book documents many of these, especially the geopolitical perils. But one peril that it faces can be solved quite easily. This peril is lack of money. For reasons I still don’t fully understand, the ASEAN Secretariat has been deprived of the resources that it needs to grow to a healthy state.

To understand the scale of the problem, just compare the budget of the world’s most successful regional organisation, the European Union (EU), with the budget of the world’s second-most successful regional organisation, ASEAN. The EU’s annual budget was €145.3 billion (S$219 billion) in 2015. ASEAN’s was US$19 million (S$26 million). The EU budget is 8,000 times larger than ASEAN’s. Yet, the combined gross domestic product of the EU is not 8,000 times larger. It is only six times larger.

Why is ASEAN deprived of resources? The simple answer is that the total size of the ASEAN budget is determined by the capacity to pay of the poorest member of ASEAN. This is a result of ASEAN’s insistence on the principle of equal payments from all 10 countries.

This principle is manifestly absurd as it says that large and rich member states should pay the same as small and poor member states. Virtually no other credible international organisation (IO)

$

WHY IS ASEAN DEPRIVED OF RESOURCES? THE SIMPLE ANSWER IS THAT THE TOTAL SIZE OF THE ASEAN BUDGET IS DETERMINED BY THE CAPACITY TO PAY OF THE POOREST MEMBER OF ASEAN. THIS IS A RESULT OF ASEAN’S INSISTENCE ON THE PRINCIPLE OF EQUAL PAYMENTS FROM ALL 10 COUNTRIES. uses this formula. Instead, all credible IOs, like the UN, use the principle of “capacity to pay”. Rich countries pay more. Poor countries pay less.

This is why one bold recommendation that our book makes is for Singapore to take the lead in arguing for the UN-style “capacity to pay” system to apply to ASEAN. Why should Singapore take the lead? Singapore should because it is the single biggest beneficiary of the magnificent ASEAN geopolitical umbrella. Singapore’s trade to GDP ratio is the highest in the world at 300 per cent. No other ASEAN country came close to this ratio. A lot of Singapore’s S$1.2 trillion in trade could shrivel up if ASEAN broke up and Southeast Asia once again became a region of turmoil, as it was in 1967.

This is what I meant when I said that Singaporeans were poking holes in the geopolitical umbrella gifted to us. We should do our best to strengthen this umbrella. Let’s start by paying more to it. We can afford it.

Kishore Mahbubani is Dean of the Lee Kuan Yew School of Public Policy and co-author of The ASEAN Miracle: A Catalyst for Peace.

This piece was published in The Straits Times on 18 March 2017.

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THE FUTURE

OF GOVERNMENT

BY ZEGER VAN DER WAL

TURBULENCE AND UNPREDICTABILITY DEFINE OUR ERA – AND GOVERNMENTS AROUND THE WORLD ARE NAVIGATING STORMY SEAS OF DIVERSE CHALLENGES, ESPECIALLY IN A VUCA-WORLD THAT IS CHARACTERISED BY VOLATILITY, UNCERTAINTY, COMPLEXITY AND AMBIGUITY. While hyper-connectivity and technology offer the opportunity for better governance, it poses a potential challenge of greater instability.

In this context, how can governments deliver meaningful services that demonstrate value to a diverse group of people, and what are the challenges that lie ahead?

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MASTERING BIG DATA The rapid pace of digital development is a defining characteristic of our times.

The proliferation of smartphones worldwide is creating massive amounts of data ripe for analytics. Whether it is daily commuter

FUTURE OF GOVERNANCE

movements throughout transport systems, banking transactions, currency movements, or footfall in public places, data provides policymakers with a wealth of insights useful in planning.

However, this doesn’t mean that life is easier for governments. There is a scarcity of talent in data analysis – and a paucity of expertise in dealing with this ocean of information. There are also higher expectations from citizens for data privacy and transparency.

Hacktivists behind emerging cybersecurity threats transform the way in which transparency demands confront governments. Moreover, the power of social media can unite citizens in rallies and demonstrations.

To counteract this, policy managers in the public sector need to become not only digitally literate, but also be able to leverage the power of social media campaigns by engaging with both the highly educated and less educated, the optimistic and the cynical.

BLACK SWAN EVENTS Although data is now able to help predict unexpected occurrences, disruptive events such as the Indian Ocean tsunami of 2004 and the 2011 Fukushima nuclear disaster remain outside the capabilities of data prediction. They can overwhelm governments’ ability to react – even with contingency planning in place – and can cause significant and unforeseen chain reactions.

For example, extreme weather events can cause disruption to the energy supply infrastructure.

And it is likely that these ‘black swan’ events will become the norm, rather than the exception, in the years ahead.

approach to public management systems. They will have to rapidly develop 21st-century capabilities to respond to both micro-trends (such as small, low-probability developments) and mega-trends (such as urbanisation, climate change and an ageing population).

Tried and trusted resilience-building strategies, such as stockpiling resources and building reservoirs, will need to be supplemented with planning, forecasting and scenario building.

THE RISE AND FALL OF POLITICAL AUTHORITY In a world where technology and globalisation have led to increasing public awareness of the workings of government, the greater transparency has not necessarily resulted in greater appreciation.

Such contradiction manifests itself in the populist sentiments that are sweeping across the world and resulting in political upsets such as Brexit and Trump’s U.S. presidential victory, or in civil unrest and uprisings in the public square like the Occupy Central movement in Hong Kong.

POLICY MANAGERS IN THE PUBLIC SECTOR NEED TO BECOME NOT ONLY DIGITALLY LITERATE, BUT ALSO BE ABLE TO LEVERAGE THE POWER OF SOCIAL MEDIA CAMPAIGNS BY ENGAGING WITH BOTH THE HIGHLY EDUCATED AND LESS EDUCATED, THE OPTIMISTIC AND THE CYNICAL.

Governments will need a fundamentally different 22

This is ‘authority turbulence’: unpredictable, rapid dynamics which influence how public leaders and institutions acquire, consolidate and lose authority when grievances are real or even perceived.

The radicalisation of some Western teenagers by the Islamic State is an extreme example: modern state authority is being abandoned in favour of traditional and charismatic (and often deadly) authority.

This increasingly turbulent environment in which authority and legitimacy have to be acquired, earned and maintained over and over again forces public leaders to balance distributive and collaborative leadership with tough and decisive leadership at the same time.

Administrative leaders will have to invest in political capabilities to manage ever faster changes of governments and in maintaining domain expertise because this legitimises their existence in the eyes of officeholders and stakeholders.

AGEING AND POPULATION GROWTH Political instability is aggravated by demographics that are putting societies under strain. The ageing population around the world has associated costs that are difficult to predict.

However, the burgeoning youth population in developing countries is adding to the global workforce. This has led governments in developing countries to rethink the size of their welfare state.

Their challenge is to achieve growth levels that allow the economy to absorb this exploding demographic. This requires governments to articulate complex policy architectures, and 23

forge new career structures, work-life balances and longer work periods that may see retirement ages creeping upwards.

In developed countries such needs will have to be balanced against social welfare policies that are under pressure.

ULTRA-URBANISATION AND MEGACITIES As populations burgeon and age, decisions on where people choose to live change and have attendant implications for the economy.

Across Africa and Asia, megacities are emerging as centres of economic activity, creating pronounced differences in development between rural and urban areas.

In countries such as China, where Beijing and Shanghai are top-tier cities, there are 135 smaller second-tier cities whose policies are increasingly driven by mayors and city managers. This shift is increasingly pivoting growth and governance innovation from the national to the local level.

As cities become magnets for population, drivers of economic growth and pioneers of technological innovations such as driverless cars, electric vehicles and robotics, public sector leaders will need to broker deals between central governments and outlying municipalities competing for resource allocation.

AUTHORITY TURBULENCE: UNPREDICTABLE, RAPID DYNAMICS WHICH INFLUENCE HOW PUBLIC LEADERS AND INSTITUTIONS ACQUIRE, CONSOLIDATE AND LOSE AUTHORITY WHEN GRIEVANCES ARE REAL OR EVEN PERCEIVED.

FORGING NEW GOVERNANCE PARTNERSHIPS The rise of the informal city states is accompanied by the rise of new actors and social agents – non-government organisations (NGOs) and non-profit organisations – that governments need to leverage social collaboration from.

The delivery of public services is no longer the sole responsibility of governments. A trifecta of corporations, local government and NGOs is increasingly collaborating on policy and decision-making.

In Australia, for instance, corporations, educational institutions and local governments are joining forces to reskill new workers to

remain employable at a large aviation company that threatened to leave the area.

Public leaders therefore increasingly find themselves developing innovative partnerships which leverage and synthesise the best that the public, the private and the voluntary sectors have to offer. Ignoring these different sectors will not create value moving forward.

Numerous challenges exist in the VUCA-world today, and it remains to be seen how successfully governments of both young and established democracies will keep evolving in embracing new roles, skills and competencies to meet them.

Zeger Van Der Wal is an Associate Professor at the Lee Kuan Yew School of Public Policy.

Read the Future of Government whitepaper at http://lkyspp.sg/future-gov-whitepaper.

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00

Lee Kuan Yew School of Public Policy

IS BLOCKCHAIN A ‘TRUST MACHINE’ FOR THE DIGITAL FUTURE? Anticipated changes in technology will disrupt businesses and pressure governments to rethink ways of working. One such major disruption is blockchain, which can facilitate mass collaboration and track all forms of transactions.

FUTURE OF GOVERNANCE

Touted as a “revolutionary technology” by IBM, blockchain is a shared, immutable ledger that can be utilised across various industries to record transaction histories, thus building trust through accountability and transparency.

Running 24/7 and promising continuous updates in real-time, blockchain stands apart as an innovative technology. Its ease of use has opened up new payment channels for customers, such as bitcoin cryptocurrencies, which they can manage transparently.

“The transaction costs that are connected to the need for trust in business affairs is what blockchain technology largely minimises,” said Wolfgang Drechsler, Visiting Professor at the Lee Kuan Yew School of Public Policy.

It is widely accepted that blockchain can revolutionise business, but it offers many benefits for the government sector as well. However, Drechsler cautions that in government, trust is more than a simple function: “It is not without ambivalence. It very much depends on context regarding desirability.”

With its focus on simplicity and efficiency, blockchain can be used to facilitate international agreements. Dias Lona, head of engineering at SERV Group, a cloud-based service delivery platform in Singapore, is confident that the technology will help governments make transactions more seamless.

“In Singapore, GovTech can use blockchain as an enabling or governing layer on top of open government data,” Lona said. “Voting and inter-government auditing processes as well as globally enforced environmental contracts can be strengthened.”

ENSURING TRANSPARENCY According to a Wired report, blockchain can help governments reduce conflict and enhance transparency in major transactions. The precision with which it tracks digital information discourages fraudulent activity in financial services. During a 2015 U.K. campaign, a candidate for the mayor of London pledged to run the city’s finances using blockchain technology.

Blockchain can also increase the efficiency of functions that require verification from government agencies, including real estate and retail transactions, government-licensed assets or intellectual property. As Drechsler pointed out, blockchain opens up the possibility of maintaining transactions through smart contracts without the need for authentication from authorities. State legislature in Vermont in the U.S., for example, is considering blockchain-based smart contracts for state businesses.

The Observer argued that more innovation and newer ideas are needed in order for governments to fully engage with the technology. This includes creating progressive and ambitious solutions that reduce costs and provide faster services to citizens.

However, before governments look at innovation, they must first prove blockchain’s utility to the masses, such as by providing protection for digital wallet software and recognising digital currency in everyday business.

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It is widely accepted that blockchain can revolutionise business, but it offers many benefits for the government sector as well. However, Drechsler cautions that in government, trust is more than a simple function: “It is not without ambivalence. It very much depends on context regarding desirability.”

SOCIALLY EMPOWERING CITIZENS While the overriding focus of blockchain currently revolves around its business applications, it has social implications as well.

According to Knowledge@Wharton, blockchain can create new identities for individuals.

However, this does not apply to people who are sanctioned by governments or restricted by geographic boundaries.

“It’s much more than about transaction efficiency or flexibility,” said Saikat Chaudhuri, executive director at the Mack Institute for Innovation Management. “It’s really beyond that. It could provide an identity to those who don’t have one, or promote financial inclusion.

Therein lies the power of this whole thing.”

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Governments pushing for public participation in governance through the use of open data sets is nothing new, but blockchain technology could provide the next step in this empowerment cycle through the ability to make decisions based on data.

“Any action, let it be highway repair or allocation of land for a certain activity, can be carried out with greater accountability and transparency,” Lona said. “Citizens will also have the opportunity to participate in decision-making on smaller tasks that have more of a local impact.”

Xavier Lepretre, senior blockchain software consultant at B9lab, believes blockchain has immense potential to bridge the gap between governments and citizens. “If the government delegates some of its decisions to smart contracts, citizens can gain a better understanding of its logic, inputs or people in charge, and point out errors or suggest improvements.”

FUTURE OF GOVERNANCE

BLOCKCHAIN’S NEW SPACE TO PLAY We have seen some remarkable blockchain initiatives recently, ranging from anti-corruption initiatives in Ghana and regulation of bitcoin exchanges in Tokyo and New York to fraud prevention for banks in Singapore and Sweden, and services for e-residents in Estonia.

ment and regulators think about it,” said Markus Gnirck, global COO of Startupbootcamp FinTech in Singapore. “For banks, this is an exciting time where the mindsets of institutions are changing and [this] finally allows [them] to think in new dimensions.”

By reducing time and money and adding convenience, blockchain will impact the overall economy as technology further embeds itself into our everyday lives.

According to Drechsler, cost-effectiveness is the key advantage of these applications, in terms of reducing transaction costs and human intermediation. Such applications also strengthen data integrity and defence against corruption attacks.

In an economy where the rules are rewritten and discarded daily, governments will stand to benefit by working closely with businesses to provide reliable, speedy citizen services, enhancing data security and encouraging global innovations.

To further elevate these trust levels, new conversations and points of engagement must be generated.

With its fast-growing reach and a foundation of sophisticated coding and borderless collaboration, blockchain could become a vibrant digital pillar aimed at sustaining user convenience and transparency.

“Blockchain can certainly be the technology that kickstarts this conversation and makes govern-

This article is written by Tristan Chan, a contributing writer for Global-is-Asian.

GOVERNMENTS PUSHING FOR PUBLIC PARTICIPATION IN GOVERNANCE THROUGH THE USE OF OPEN DATA SETS IS NOTHING NEW, BUT BLOCKCHAIN TECHNOLOGY COULD PROVIDE THE NEXT STEP IN THIS EMPOWERMENT CYCLE THROUGH THE ABILITY TO MAKE DECISIONS BASED ON DATA.

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Data analytics is a scientific and data-driven approach to help organisations solve problems, make better decisions, and increase productivity.

Despite its business origins, analytics has been applied in governments, hospitals, public policy, and even museums, spurring the growth of a US$125 billion market.

US$125 BILLION MARKET A significant number of analytics projects fail, however, due in part to poor science (techniques), art (communication, implementation, change management), or both. I draw on my experience as an analytics consultant, civil servant and academic to share four learning points for organisations and governments embarking on their analytics journey.

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SUCCESSFUL ANALYTICS INVOLVES BOTH SCIENCE AND ART Organisations spend an inordinate amount of time on the science of getting algorithms right, and much less on implementation and changing mindsets. The perils of not implementing well overshadow the promises of analytics, as illustrated in the following case studies.

In the first case study, for an agency managing inventory, my team achieved a US$250,000 -per-month-saving with a model to optimise the buy-store-distribute process. Scientifically, it was phenomenally successful, yet our solutions were not adopted. Apparently, this was because the project manager was so worried about being

SINGAPORE CASE STUDIES

punished for retrospectively losing the agency US$250,000 per month for the past 24 months on the job! I was astounded at how a tight organisational culture could turn a successful solution into an opportunity for reprimand.

Confronting the sobering reality that my team got the science right but neglected the art, I immediately convinced the company’s CEO with my point of view. What ensued was remarkable: The fearful project manager was promoted two levels up to junior director, every other manager started to initiate analytics projects, and thereafter, analytics blossomed in that organisation.

In the second case study, my team was engaged by an Asian government client to design more proactive human resource (HR) practices.

Current practices are reactive: When an employee leaves, it takes months to find a replacement, increasing the load of remaining staff. This client wanted to distill the drivers of attrition to achieve both macro and micro insights. At the macro-level, that meant adjusting HR policies to decrease attrition; on a micro-level, predicting who may leave the organisation and intervening with those they want to keep.

AN INTEGRATED-METHODS APPROACH IS BETTER THAN AN ANALYTICS-ONLY APPROACH When analytics is top-of-mind and investments in the form of software and a new team - have been made, the bias towards analytics is inevitable, though it significantly narrows the pool of solutions. Instead, organisations should focus on understanding the problem deeply and coming up with the best combination of tools, which may or may not include analytics.

In the third case study, a mega hospital in Asia was confronted with an increased incidence of falls resulting in serious injury. From a design-thinking approach, one would track the patient journey, find out the pain points and brainstorm solutions. An analytics approach would link disparate datasets and analyse for risk factors to predict fall risk of new patients.

Although large multi-nationals like Walmart, Credit Suisse and eBay have attempted these models, this was the first-known initiative for a government in Asia. As expected, the science was tedious yet straightforward, but the art of change was more complex, since we had to work through tough implementation questions: If an employee had a 40 per cent chance of leaving, and it took US$50,000 to keep them, can the immediate supervisor make the decision? And if not, to which level should it be escalated?

Integrating Design Thinking (DT), Analytics and Behavioural Insights (BI) along the solution value chain leverages the strength of each method to produce a better solution. Analytics can begin with patient segmentation: Among 2000 patients, how many unique behavioural clusters emerge? Behavioural segmentation, informed by analytics, provides the unique types of patients that DT can track through patient journeys. Thereafter, hypotheses can be quantitatively tested through analytics, revealing a list of risk factors for patient falls. BI picks up the baton to pilot test interventions and roll out the most successful programme.

Both case studies underscore the importance of paying attention to the art of analytics by asking, “how will the insights and models be used?” and “how will processes change with this new capability?”. Science distills the insights, art transforms them into strategy and implementation.

Similarly, in policy formulation and evaluation, this trio of techniques presents different means to acquire evidence, which will not be robust if only one method is used. Analytics, no matter how powerful, should be used with other techniques to build the best solution.

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STRUCTURING THE TEAM FOR INNOVATION Given the benefits of incorporating different techniques, the next important question is how to build a multi-disciplinary team and how to decide who will manage them. Typically, analytics, BI and DT are in separate teams, with analytics reporting to the chief information officer (CIO), and BI and DT, if existent, to the chief marketing officer (CMO).

I recommend bringing all into one team that reports to the chief operating officer (COO) or the chief executive officer (CEO). In doing so, the team is given the central mandate to tackle strategic whole-of-organisation challenges.

Problems can also be analysed from different perspectives with designers co-innovating with data scientists to craft creative solutions. The Singapore Health Promotion Board is one of the few national agencies that successfully integrated the DT-Analytics-BI talent trio into an innovation team filled with intellectually curious and academically agile members. When the team is centralised, rather than fragmented across the organisation, they deepen their skills by working on problems across domains.

In reality, not many (government) organisations have the luxury of an analytics team. In Singapore, most government agencies leverage on a central pool of talented software developers and data scientists at GovTech - the government’s IT talent hub. There are “exchange programmes” where the data scientist dedicates a few months to work with one agency to gain deeper domain knowledge; on the other hand, a policy analyst may spend an extended period at GovTech to pick up computational thinking and coding skills for a more evidence-based approach to policy formulation. Such programmes seek to close the analytics-domain and theory-practice divide.

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RESTRUCTURING THE PUBLIC SERVICE TO ENABLE WHOLE-OF-GOVERNMENT ANALYTICS Of broader significance, the public service is moving towards a whole-of-government approach to policy making. For example, ageing is not only a health issue, it is also a transportation, environmental, social and family issue. The rallying cry is to break down silos.

I prefer a more conservative approach. Having worked on a farm, I’m reminded of silos containing grains, cement and sawdust. I can’t imagine the mess if they are broken! Instead of perceiving silos as negative, consider them to be cylinders of excellence, with the need to build bridges between them.

To create opportunities for silos to “talk” to each other, Singapore’s government organised forums for top leaders within different sectors to discuss and craft policies. For example, the social forum brings together senior leaders of all the social agencies to build consensus for social policies. It is also a great platform to commission important

analytics projects that require data from multiple agencies – usually a difficult process. When these projects are debated and benefits delineated among senior leaders across agencies, they are more willing to share data that contributes to a common good.

Besides platforms to talk between silos, the Prime Minister’s Office started an important team of “bridge builders”, a.k.a. The Strategy Group, to shepherd and coax whole-ofgovernment policy and practice. The bridge builders staff the sectoral forums, and pioneer the data science commissioning platform to nudge line agencies toward a more whole-ofgovernment approach to policy, practice, and data sharing. At the tactical level, Singapore formed a Municipal Services Office whose app is likened to a one-stop shop for public feedback and manages it across government to ensure a coordinated response.

In sum, analytics must leap out of research to influence practice. Successful analytics in any organisation – government or corporate – depends on several ingredients: science, art, team and ecosystem. Together they nourish a strong data-driven and evidence-based culture for data analytics to thrive.

Reuben Ng is an Assistant Professor at the Lee Kuan Yew School of Public Policy.

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RESISTING AUTHORITARIAN

POPULISM: LESSONS FROM & FOR SINGAPORE

BY KENNETH PAUL TAN

The Trump presidency and Brexit have dominated public discourse this year. Both have been characterised as manifestations of what appears to be a rising tide of right-wing populist politics in many parts of the world.

Six years ago, in 2011, Singapore’s ruling People’s Action Party (PAP) won the country’s general elections, but earned its lowest percentage of the popular vote since coming into power more than half a century ago. Although many viewed these more competitive elections 33

and improved prospects for political opposition as a sign of political liberalisation and maturity, a few were quietly concerned that Singapore’s paternalistic and technically rational administrative state, credited with the republic’s remarkable success and largely insulated from political pressures, would start to succumb to populism, and that the Singapore success story would start to unravel.

This, in fact, has not happened.

SINGAPORE CASE STUDIES

In the years leading up to the next general election in 2015, the PAP government carefully studied the situation and adjusted its policies to reassure the voters – including those who were feeling left out of Singapore’s economic success story – that their concerns and needs were being taken into account, even as the global city became more and more expensive and crowded to live in. In 2015, Singapore grandly celebrated 50 years of independence and memorialised founding father Lee Kuan Yew’s heroic leadership following his death. The PAP was rewarded with a very comfortable majority, securing once again the dominance that is the only system that many Singaporeans have ever known.

Despite a young, small and multi-ethnic nation-state, Singapore is prosperous, peaceful and surprisingly influential in the global imagination. But its international image has attracted contradictory reactions.

On the one hand, the liberal West criticises Singapore for not adequately defending human rights, freedom of expression, and freedom of assembly. The West acknowledges that Singapore’s elections are free, but argues they are not sufficiently competitive, as they always produce and legitimise the same authoritarian outcome.

But authoritarian Singapore’s economic success has been impressive, celebrated in the myth of the “Four Asian Tigers” and in the city-state’s own national narrative of developing rapidly from third world to first. Singapore’s success has been explained, and its authoritarian methods justified, by constructing an ideology first of Confucian values and later of Asian values.

These have been held up as a shield against an occidentalised image of Western insensitivity, ignorance, hypocrisy and arrogance. Singapore’s material success and ideological expressions of this success have had the effect of weakening the legitimacy and force of liberal criticisms.

On the other hand, there has also been widespread admiration for the Singapore model of development and governance. Developing countries have looked to Singapore not only for a model of rapid growth and development, but also for viable alternatives to liberal democratic trajectories.

Advanced countries of the West have looked favourably upon the seriousness with which Singapore takes governance and policy making.

They admire the pragmatism of a technocratic government that has managed to escape the paralysis of ideological and political deadlock, and to enjoy the luxury of focusing on performance and results, upon which its legitimacy and popular support are staked.

Singapore is also viewed as a policy laboratory, especially relevant at the scale of cities, where ideas can be tested and, if successful, adapted elsewhere.

History presents numerous examples of fragility where liberal democracies are concerned.

Political philosophy tells us that diversity – and nearly every society today is diverse – can weaken the communitarian basis of a society, making it difficult for the state to function well and eroding the trust that binds people to one another and to their institutions. Without a strong institutional basis, the nation-state can become vulnerable to authoritarian populism, particularly when hit by crisis. Out of a demoralised society, moral and political entrepreneurs – often skillful demagogues – emerge and compete for power by mobilising a collective sense of victimhood directed against an allegedly corrupt establishment, as well as scapegoats such as immigrants, ethnic minorities, and sexual minorities, upon whom the entire blame for all of society’s ills is placed.

To prevent this, liberal democracies need to focus not only on aggregating the votes and voices of their citizens. Just as much, they need to strengthen state institutions and build 34

LIBERAL DEMOCRACIES NEED TO DO A BETTER JOB OF PRODUCING AND IMPLEMENTING COHERENT AND EFFECTIVE POLICIES THAT ARE NOT HARMFULLY CONSTRAINED BY THE LIMITS OF ELECTORAL CYCLES.

resources, capacity and shared narratives to protect an inclusive and vibrant public space in which diversity helps to shape public moralities, rather than allow a singular public morality to restrict and even eliminate diversity. Liberal democracies need to do a better job of producing and implementing coherent and effective policies that are not harmfully constrained by the limits of electoral cycles. How can all of this be achieved?

Singapore’s strong state may provide some answers. Its rigorously meritocratic institutions attract the most talented Singaporeans into public service, forming an unashamedly elite government that is able to implement policies – even unpopular ones – that it deems to be in the long-term public interest. High quality education, which has been consistently lauded in international benchmarking tests, is available to all and has helped build a broadly reasonable citizenry. To attract the best people for public service and keep it clean, Singapore pays some of the highest public service salaries in the world. The incentive structure and harsh punishment have made corruption not only a risky but also an irrational choice. Integrity is more than just an organisational slogan. It is deeply suffused in the culture.

Singapore’s clean and meritocratic government is also a pragmatic one. Policymaking is mostly grounded in evidence, research, analysis and the projection of future scenarios. Refusing to be shackled by ideological, moralistic and sentimental rigidities when it matters, the government’s focus has been on performance and results. Formal international validation of Singapore’s success together with the day-to-day experience of ordinary Singaporeans, who have seen their country transform into a global city of the first rank, have given the state good reasons to earn performance legitimacy. Despite their specific grievances and mild resentment of Singapore’s often-arrogant establishment, the people of Singapore on the whole trust their 35

government indicate.

highly,

as

surveys

regularly

For liberal democracies to thrive and not collapse under the weight of their unavoidable diversity, they could benefit from instituting a strong, meritocratic, clean and pragmatic state to ensure peace, stability, effective policies, a well-educated citizenry, and generalised trust.

These can help regenerate civic life and fortify it against the threat of authoritarian populism.

Although Singapore may offer some lessons to strengthening liberal democracies, Singapore itself can afford to learn many lessons from healthy liberal democracies to prevent its own institutions from degenerating and to keep them dynamic. Without a healthy dose of political competition, for instance, there is nothing stopping Singapore’s meritocracy from degenerating into vulgar elitism, producing a self-serving establishment consisting of individuals who are self-congratulatory, unrepresentative, unresponsive, complacent and lacking in imagination and courage. Such an elite will devote much of their energies to keeping themselves in power or defining merit exclusively in their own image. Armed with expertise, leaders can appear like cold technocrats, arrogant and incapable of understanding the challenges of ordinary life or of making policy decisions in an inclusive and empathetic way. Without social and political mobility, the elite can lose the motivation to

SINGAPORE CASE STUDIES

excel and the masses can become disillusioned with and disengaged from the system. As ordinary Singaporeans continue to witness a rise in relative poverty, socio-economic inequalities, cost of living, and immigration, the global city may also become vulnerable to authoritarian populism.

Increasingly aware of these dangers, Singapore’s government has attempted to rebalance and re-qualify its rhetoric and practice of meritocracy. It now speaks regularly about compassionate and inclusive forms of meritocracy, focusing on skills and not academic qualifications alone, and implementing new programmes that purport to advance continuous lifelong learning. Clearly, for the rhetoric to be more believable and the programmes effective, more needs to be done, particularly in the coming years, as disruptions to the economy and the nature of work will create a bigger pool of disenfranchised Singaporeans.

Similarly, Singapore’s government speaks more articulately of sustainability, resilience and foresight as essential aspects of its practice of pragmatism. They have the potential to dislodge the system from its now crude and sometimes even dogmatic adherence to neoliberal economic growth, made respectable by the fig leaf that is Singapore’s rhetoric of pragmatism. But success makes it difficult to shed the formulas that have led to it, even when it seems to make sense to do so.

Liberal democracies need strong government – clear, meritocratic and pragmatic – in order to survive the constant threat of authoritarian populism. At the same time, Singapore’s strong state can be made more resilient by heightening competition in the political system, including instead of avoiding alternative positions and points of view, embracing change, and developing capacity for more empathetic modes of engaging and including a diverse public.

Kenneth Paul Tan is Vice Dean for Academic Affairs and an Associate Professor at the Lee Kuan Yew School of Public Policy.

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HEALTHCARE: SINGAPORE’S SUCCESS STORY

BY M RAMESH

RANKING SECOND IN THE BLOOMBERG HEALTHCARE EFFICIENCY INDEX 2016, SINGAPORE IS INCREASINGLY ACKNOWLEDGED BY ANALYSTS AND COMMENTATORS AROUND THE WORLD FOR ACHIEVING EXCELLENT HEALTHCARE OUTCOMES AT MODEST COSTS. The issue of healthcare reform has become ever more contentious, as governments look to rein in spending and limit their fiscal responsibility. In the face of anxieties over rising healthcare costs, Singapore’s healthcare model has caught their eye, especially its medical savings account scheme, Medisave. Observers see it as a clever mechanism for reducing government’s fiscal obligations while building households’ capacity to pay for their healthcare needs.

The interest in Medisave coincides with the ongoing healthcare reform debate in the U.S..

Health savings account is a prominent component in all Republican proposals to replace Obamacare. They all offer attractive tax benefits to those who take it up and then use the accumulated funds to purchase health insurance of their choice. They argue that this will expand individual choice while reducing the government’s involvement.

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However, in their latest research paper, “Tools Approach to Public Policy: Healthcare in Singapore”, Professor M Ramesh and co-author Dr. Azad S Bali from the Lee Kuan Yew School of Public Policy argue that outside observers’ focus on Medisave is misplaced and misses the deeper reasons for the success of Singapore’s healthcare system.

They point out that Singapore’s achievement is not the result of any single programme, but of the targeted and orchestrated manner in which the government deploys a broad range of policy tools. The scope and depth of government’s involvement in healthcare is unlikely to appeal to most American policymakers, Democrat or Republican.

THE GOVERNMENT INTERVENES COMPREHENSIVELY IN THE HEALTHCARE SECTOR Back in the mid-1980s, the Singapore government introduced reforms centred on privatisation, deregulation and marketisation that were in vogue at the time. The ensuing increase in healthcare expenditures and political disquiet led the government to reverse course, and develop and refine a comprehensive set of tools to steer the sector. These policy tools can be broadly classified into four categories: organisational, fiscal, regulatory and information.

SINGAPORE’S HEALTHCARE ACHIEVEMENT IS NOT THE RESULT OF ANY SINGLE PROGRAMME, BUT OF THE TARGETED AND ORCHESTRATED MANNER IN WHICH THE GOVERNMENT DEPLOYS A BROAD RANGE OF POLICY TOOLS.

ORGANISATIONAL TOOLS

An important part of Singapore’s health system is the government’s ownership of the vast majority of hospitals in the country. This allows the government leverage to direct the hospitals while granting operational autonomy to managers regarding day-to-day activities.

The emphasis on autonomy and competition while remaining in public ownership makes hospitals more customer-centred and financially prudent, and ensure that they remain under the government’s direct control.

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FISCAL TOOLS

Out-of-pocket payments form the bulk of total healthcare expenditures in Singapore as free healthcare is non-existent. Every service user is expected to pay all or part of the costs of treatment. Medisave forms only a very small part of total expenditures. However, the government has elaborate measures in place, including subsidies for lower cost wards, to keep costs down and ensure that basic services remain affordable.

REGULATORY TOOLS

The government maintains tight regulatory supervision and control over all healthcare providers in Singapore. These regulations work in conjunction with the controls it exercises through ownership of and subsidy to public hospitals.

INFORMATION TOOLS

To promote healthy competition among providers – competition based on substantive matters rather than frills – the government requires hospitals to publish the average estimated bill for major medical procedures on the Ministry of Health’s websites. On admission, hospitals are required to provide patients with an estimate of their bill, and among others, the average bill at other hospitals. This allows patients to make informed choices, and providers to remain conscious of cost and quality issues.

SINGAPORE CASE STUDIES

TARGETING SHORTCOMINGS WITH A PORTFOLIO OF TOOLS Singapore’s health system is not without its challenges. Though Singapore has managed to maintain modest overall spending, it has a rapidly ageing population and most healthcare expenditure continues to be financed out-of-pocket. What is unique about Singapore’s approach to healthcare, however, is that it has developed a portfolio of targeted tools to address specific problems that afflict the sector.

The coordinated use of these tools ensures that healthcare providers compete on costs and quality, and that total costs remain relatively low.

Singapore will have to calibrate these tools to respond to challenges in the coming years.

Unlike the focus on financial and payment issues that characterises healthcare reforms in most countries, Singapore’s approach to healthcare shows a promising pathway to managing the sector effectively. However, governments have to make their own assessment as to whether they have the political will or the administrative capacity to adopt and execute a similar strategy.

M Ramesh is UNESCO Chair on Social Policy Design in Asia and a Professor at the Lee Kuan Yew School of Public Policy.

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GOVERNMENT PLANNING

PAVES THE WAY FOR SINGAPORE’S PETROCHEMICAL SUCCESS

THE EVOLUTION OF SINGAPORE’S PETROCHEMICAL INDUSTRY OFFERS SOME SAGE LESSONS TO OTHER NATIONS LOOKING TO REPLICATE ITS SUCCESS. When Britain departed Singapore in 1959, it left behind a clutch of colonial buildings, a port and little else in a country with no natural resources.

From these modest beginnings, Singapore’s early leaders drafted an ambitious and detailed agenda to best take advantage of the country’s attributes and develop it into the world-class economy it is today. A large portion of this 41

success can be attributed to its petrochemical industry.

Almost 60 years on, the petrochemical cluster is now an important driver of Singapore’s modernisation and economic growth. Here, Singapore has succeeded where other Asian nations such as China have lagged.

SINGAPORE CASE STUDIES

In a recent paper, “Embracing globalization to promote industrialization: Insights from the development of Singapore’s petrochemicals industry”, published in China Economic Review (2017), Associate Professor Vu Minh Khuong of the Lee Kuan Yew School of Public Policy examines the Singapore experience and sheds light on recent industrial policy debates

surrounding the optimal level of government intervention. The paper also identifies lessons for developing countries who are looking to replicate Singapore’s success.

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SINGAPORE IS WELL LOCATED TO SERVE THE WORLD Chemicals was first identified as a potential industry in 1960 in Singapore’s original economic plan, drawn up a year after its colonial.

British rulers bowed out and left the country to self-govern. Singapore’s strategic location – near the Malacca Strait and with easy access to the sea – made it well-placed to become a bunkering facility for oil storage and later a trading post for petroleum products.

SINGAPORE’S STRATEGIC LOCATION – NEAR THE MALACCA STRAIT AND WITH EASY ACCESS TO THE SEA – MADE IT WELL-PLACED TO BECOME A BUNKERING FACILITY FOR OIL STORAGE AND LATER A TRADING POST FOR PETROLEUM PRODUCTS.

The early stages of Singapore’s modern industrialisation saw a focus on chemicals at the lower end of the value chain, and by the late 1970s the country had become one of the largest refining centres in the world. The 1980s saw advances up the value chain through investment in the production of downstream products. In 1995, the government began work on an ambitious land reclamation project to create Jurong Island, which, after opening in 2000, quickly became the state’s petrochemical hub.

THE THREE FUNDAMENTAL PRINCIPLES AND CORE FRAMEWORK Today petrochemicals is a key pillar of Singapore’s manufacturing sector, which contributes up to 25 per cent of GDP. As such, it is vital to the state’s continued economic success. The industry is also a major source of the country’s export growth, particularly over the past decade. Petrochemical exports grew at an annual average of almost 15 per cent between 2000 and 2013, increasing from US$21 billion to US$124 billion. It has also meant that related industries, such as ship repair and building, have grown to be globally competitive.

PETROCHEMICAL EXPORTS

15% ANNUAL GROWTH

FROM US$21 bn TO US$124 bn

IN JUST 13 YEARS

SINGAPORE CASE STUDIES

It has taken significant detailed government planning to get Singapore to where it is now. In promoting the petrochemical industry, economic planners were guided by Singapore’s overall development strategy, which is based on three fundamental principles.

1

The interdependence between government and market.

2

A focus on establishing links with industrialised countries and attracting investment from multinational companies.

3

Effective strategic positioning to best leverage competitive advantage.

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This foresight has reaped rewards. For example, the fundamental principle of strategic positioning meant that Singapore’s attributes were quickly identified and capitalised upon. In this case, its strategic location as a bridge between the supply of crude oil from the Middle East and demand from growing Asian markets led to several multinational companies building petroleum refineries here, spurred by government incentives.

Planners also formulated a strategic action framework consisting of four pillars: capacity building, opportunity seizing, resources upgrading and enduring success. Combined, they are referred to as the CORE framework.

Capacity building, in particular, has always been a key priority for Singapore. To this end, the Economic Development Board (EDB) was established in 1961 as a one-stop agency to lend support to investors. Over the decades, the EDB has played an important role in helping to drive Singapore’s ambitions.

TAKEAWAYS FOR OTHER COUNTRIES The Singapore example reveals that a developing country can indeed overcome government failures – such as information constraints and rent-seeking – to vitalise industries and accelerate industrialisation.

If leaders of other countries adopt an effective development strategy, maintain a deep commitment to building capacity and gather the best talent, they too could help their nations to enjoy similar successes and all the benefits that flow down from that.

It is also important to note the quality of government interventions, which are classified 45

as ‘hard’ and ‘soft’. In Singapore’s case, the former approach included measures such as tax credits while the latter involved creating a favourable business environment, an excellent education system and entering into free trade agreements with major trading partners to enlarge markets.

In particular, other countries would be well advised to take note of the three fundamental principles and the CORE framework, which would be of invaluable assistance in preparing the ground for a petrochemical boom.

Singapore’s success did not happen by chance.

Rather, it was the result of long-term planning and thoughtful government intervention. The story behind the sector’s development offers transferable lessons to other nations in knowledge and processes. At the same time, insight into how the Singapore government successfully balanced market forces and intervention provide food for thought in the light of recent industrial policy debates.

This article is written by Aarti Betigeri, a contributing writer for Global-is-Asian.

Global-is-Asian is the Lee Kuan Yew School of Public Policy’s flagship online content hub focusing on policy issues affecting Asia and the world. Backed by research and grounded in practitioners’ experience, our content aims to stimulate global thinking and understanding of key policy issues, especially among policymakers and fellow academics. We also provide insight on global affairs through the lens of a rising Asia.

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