Safety net? More like a trampoline: DPM Tharman

Singapore's economic success, social policies and safety nets were some of the main issues discussed by Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam in an interview by BBC Hardtalk presenter Stephen Sackur at the St Gallen Symposium in Switzerland earlier this month.

Below is an excerpt from the session:

If you could define one thing that has been of paramount importance behind Singapore's rise, what would it be?

An attitude of mind. We took advantage of disadvantage. We converted permanent disadvantage into continuing advantage. And that's a very fundamental attitude of mind. What disadvantage did we have?

We were not a nation that was meant to be. It's a diverse group of people coming out of colonial migration patterns, very different origins, very different belief systems and religions. We were small, no domestic market, decolonisation happened suddenly and the British withdrew their military forces quickly and it impacted a very large part of the economy.

We're surrounded by much larger neighbours. To our south, and (who) at the very outset objected to the very formation of Singapore and Malaysia. We had every disadvantage you could think of for a nation and we did not expect to survive, we were not expected to survive.

But that, to Lee Kuan Yew and the pioneer team of leaders, was converted to advantage because it forces you to realise that all you have is yourself, the world owes you nothing.

Your piece of granite rock - fortunately it's granite by the way - not even a waterfall or mountains that allow you to have a little bit of hydroelectric power, nothing.

Just a group of people of different origins who were willing to work hard and had to fend for themselves and make themselves relevant to the world.

And that mindset, thinking of yourself as not having that advantage of size or history and that you've got to create it for yourself, turns out to be a phenomenal advantage.

So maybe it was size that allowed you to find the collective will that other larger nations could not forge?

Let me put it this way: People think of Singapore as an economic success... But what was really interesting and unique about Singapore was social strategy, and most especially the fact that we took advantage of diversity, different races, different religions, and melded a nation where people were proud of being who they were but were Singaporean first and foremost.

But was it melded from top down? And we can't get away from the figure of Lee Kuan Yew himself. It wasn't there at the beginning. He imposed it.

The natural workings of society would not have led it to that happening. Not just in Singapore but anywhere in the world. The natural workings of society would have just as easily and more likely led to mistrust, discomfort, bigotry and what we see in abundance in many countries in the world today.

The most intrusive social policy in Singapore has turned out to be the most important, and it has a level of intrusiveness that doesn't come comfortably to the liberal mind.

Eighty-five per cent of Singapore lives in public housing. It covers the lower-income group, the middle-income group, the upper-middle- income group. These are middle-class housing estates.

But every single block of flats and every single precinct requires an ethnic balance. You can't just get more and more of the same people concentrating themselves in the same neighbourhood. When it was first done, I don't think we knew how important it was going to be.

It sounds extraordinarily authoritarian.

It was intrusive and it has turned out to be our greatest strength, because once people live together, they're not just walking the corridors together every day, taking the same elevator up and down.

Their kids go to the same kindergarten, the kids go to the same primary school, because all over the world young kids go to school very near to where they live, and they grow up together.

The lessons coming out of Baltimore, the lessons coming out of France's large cities, the lessons coming out of all our societies show that neighbourhoods matter, place matters, where you live matters.

It matters much more than economists thought. It matters tremendously in the daily influences that shape your life and the traps you fall into.

To some of our sensitive flowers in the West, the authoritarianism that underpins that approach to managing a society feels uncomfortable to us.

That's a caricature. I mean even the Economist, which is not exactly a cheerleader for Singapore, would say - as it just did in its editorial form of obituary when Mr Lee Kuan Yew passed away - that Singapore has free, fair and regular elections.

We are a parliamentary democracy, not in an exactly the same mould as Britain or the United States certainly, and an elected government makes decisions which it feels are in the best interests of the country today and for the future. And we are accountable for it.

It's a democracy of sorts. You don't have a genuinely free, truly liberated press. When journals that are respected and have a role to play like the Far East Economic Review for years and years are hounded by the government...

No, the rules are very clear and simple. Singapore is an extremely open society by virtue of the number of foreign publications that are circulated - well over 5,000 - the fact that Singaporeans are, probably more than any other society broadband penetrated, the fact that they're English-educated and have access to a whole world of information on the Internet. It's an extremely open society.

We are unconventional in requiring in our laws that we have the right of reply when foreign publications publish something that we feel is false or misleading. We just have the right of reply. And when publications refuse to publish a reply, we impose restrictions on them that affect their advertising revenues.

Unconventional, you might not agree with it, but the larger point is this: I think we all need some humility on the ways that best advance a liberal order economically, socially and politically.

We all need some liberty, some humility as to how we achieve that not just for today but for tomorrow. How do you best sustain it? The most thoughtful observers in the West are of the view that you need some buffers, you need some margins of safety, and you need some compromises on some liberties in order to achieve others.

And the freest possible media is not the only liberty we aspire to. I do think it's a good idea by the way. It appeals to my ideals.

But it's not the only liberty you aspire to. You do aspire to a liberty of being able to walk the streets freely, particularly if you're a woman or a child, at any time of the night. You aspire to the liberty of living in a city that's not defined by its most disorderly elements.

You aspire to the liberty of having an opportunity for an education and a job regardless of your race or your social background. And you aspire to a liberty of practising your own religion without fear of bigotry or discrimination. Those are very important liberties in many societies and they are lacking in many societies.

Is there going to be room for more individualism in Singapore in the future?

Yes. So if you look at Singapore today compared to not even 50 years ago, 10 years ago, it's a vastly different place. Singaporeans are educated, discerning, sceptical and critical people. They know what's what. And Singapore continues to evolve.

It's a function of course of the fact that we've had some success in education. It's a function of the fact that it's a digital world, it's an open world. But let's not think that we are all moving teleologically towards that destination that you now see in the US or UK. We all have to evolve and we all need some humility as to how we progress democracy.

But will Singapore always be the kind of society where the government says, ultimately, you can't live there because the quota for your particular ethnic grouping has already been reached, you've got to go and live there? Is it going to be that kind of society forever?

That's an imponderable. I think it will be naive to think that you can lift it and people will automatically gravitate towards diverse neighbourhoods and you won't in fact get the reverse. Because if you look at the most advanced democracies, that's exactly what's happened.

In the UK, half of the Muslim population lives in your bottom 10 per cent of neighbourhoods. Did it happen because of some random chance? Or did it happen because that's the natural workings of society?

We have to address these facts honestly and realise that human beings aren't perfect; everyone has biases, discomforts, a sense of liking or distrust for each other. And there is a rule of government to unify people. And it doesn't happen through speeches.

It means you need mechanisms, you need instruments. They mustn't be too constraining on individual choice, but you do need to constrain something.

And you end up a better society or don't - that's the test, not whether the government is right. You end up a society that people feel more comfortable in. That's the real test. It's easy to talk about Singapore but this is a challenge we all face.

Another challenge you face is on the size of government. If you look at the figures, your government is actually an advocate of massive state spending. I don't know whether you are worried that looking forward, particularly if you mix demographics with the size of your government and the ambition of your government, you are going to run into real problems.

So I think we're a very interesting case of a country that has low government spending, by the way, by most standards, as a percentage of GDP, low taxes.

Our starting point is not a bad one. We've got relatively low government spending and revenues. But we're able to achieve the social outcomes that countries with much larger spending do. And how do we do it?

I think one of the very important lessons of the last 50 years is that traditional concepts of welfare and social expenditure and government intervention have led to a weakening of private initiative and personal responsibility. Not because that was the intent.

But the point is, there are ways in which an active government can intervene to support social mobility, to develop opportunities and to take care of the old, which don't undermine personal and family responsibility. And that's the compact that we're trying to achieve. It's almost a paradox.

Do you believe in the concept of a safety net?

I believe in the notion of a trampoline.

So people are just bouncing up and down in Singapore.

It boils down to what policies you're talking about. If you provide help for someone who is willing to study hard; if you provide help to someone who is willing to take up a job and work at it; and make life not so easy if you stay out of work.

If you provide help to someone who wants to own a home - and we're very generous in our grants for home ownership, which is why we have 90 per cent home ownership.

And amongst the low-income population, more than 80 per cent own their homes. It transforms culture. It's not just for transactions, it's not about the size of grants.

It's about keeping alive a culture where I feel proud that I own my home and I earn my own success through my job. I feel proud that I'm raising my family. Keeping that culture going is what keeps the society vibrant.

Singapore made its great strides in the 60s, 70s, 80s when the rest of Asia, many of its countries, were under terrible misrule. It's a bit different now. Foreign investment, for example, might begin to think Singapore's gone as far as it can go, there are other places where we can put our money. Are you worried about that?

Singapore wouldn't be where it is today if it didn't have to compete very hard against formidable competitors. They weren't always in Asia; they weren't always in the immediate neighbourhood.

But it's always been about competition. And that's how we've moved up from highly labour-intensive, low-skilled, low-wage production to what is now basically high-skilled, high-wage enterprise. And it's a constant race.

But don't forget the intangibles. There's some advantage in being constant, in keeping to your promise, sticking to the contract and building confidence amongst every investor that in 20 years' time, in 30 years' time, the rules are not going to change.

Being constant - does that mean that Lee Kuan Yew's family will always be in charge?

That would be most unusual. It's a meritocracy. It would be most unusual if that was the case. It's not the way most Singaporeans would expect it to be.

This article was first published on May 20, 2015.
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