Why I'd Listen to the Ideals of Great Singaporeans Over People Who Insist the Wrong Notion About Foreign Investments
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| You know how stressful it gets arguing with such small-minded people! |
Where would it be better to get information about Singapore than Singapore itself?
Pages 57-58
After several years of disheartening trial and error, we concluded that Singapore's best hope lay with the American multinational corporations (MNCs). When the Taiwanese and Hong Kong entrepreneurs came in the 1960s, they brought low technology such as textile and toy manufacturing, labor-intensive but not large-scale. American MNCs brought higher technology in large-scale operations, creating many jobs. They had weight and confidence. They believed that their government was going to stay in Southeast Asia and their businesses were safe from confiscation or war loss.I gradually crystallized my thoughts and settled on a two-pronged strategy to overcome our disadvantages. The first was to leapfrog the region, as the Israelis had done. This idea sprang from a discussion I had with a UNDP expert who visited Singapore in 1962. In 1964, while on a tour of Africa, I met him again in Malawi. He described to me how the Israelis, faced with a more hostile environment than ours, had found a way around their difficulties by leaping over their Arab neighbors who boycotted them, to trade with Europe and America. Since our neighbors were out to reduce their ties with us, we had to link up with the developed world-America, Europe, and Japan-and attract their manufacturers to produce in Singapore and export their products to the developed countries.The accepted wisdom of development economists at the time was that MNCs were exploiters of cheap land, labor, and raw materials. This "dependency school" of economists argued that MNCs continued the colonial pattern of exploitation that left the developing countries selling raw materials to and buying consumer goods from the advanced countries. MNCs controlled technology and consumer preferences and formed alliances with their host governments to exploit the people and keep them down. Third World leaders believed this theory of neocolonialist exploitation, but Keng Swee and I were not impressed. We had a real-life problem to solve and could not afford to be conscribed by any theory or dogma. Anyway, Singapore had no natural resources for MNCs to exploit. All it had were hard-working people, good basic infrastructure, and a government that was determined to be honest and competent. Our duty was to create a livelihood for 2 million Singaporeans. If MNCs could give our workers employment and teach them technical and engineering skills and management know-how, we should bring in the MNCs.
Page 66
Our job was to plan the broad economic objectives and the target periods within which to achieve them. We reviewed these plans regularly and adjusted them as new realities changed the outlook. Infrastructure and the training and education of workers to meet the needs of employers had to be planned years in advance. We did not have a group of readymade entrepreneurs such as Hong Kong gained in the Chinese industrialists and bankers who came fleeing from Shanghai, Canton, and other cities when the communists took over. Had we waited for our traders to learn to be industrialists we would have starved. It is absurd for critics to suggest in the 1990s that had we grown our own entrepreneurs, we would have been less at the mercy of the rootless MNCs. Even with the experienced talent Hong Kong received in Chinese refugees, its manufacturing technology level is not in the same class as that of the MNCs in Singapore.
Pages 68-69
If I have to choose one word to explain why Singapore succeeded, it is confidence. This was what made foreign investors site their factories and refineries here. Within days of the oil crisis in October 1973, I decided to give a clear signal to the oil companies that we did not claim any special privilege over the stocks of oil they held in their Singapore refineries. If we blocked export from those stocks, we would have enough oil for our own consumption for two years, but we would have shown ourselves to be completely undependable. I met the CEOs or managing directors of all the oil refineries-Shell, Mobil, Esso, Singapore Petroleum, and British Petroleum on 10 November 1973. I assured them publicly that Singapore would share in any cuts they imposed on the rest of their customers, on the principle of equal misery. Their customers were in countries as far apart as Alaska, Australia, Japan, and New Zealand, besides those in the region.
This decision increased international confidence in the Singapore government, that it knew its long-term interest depended on being a reliable place for oil and other business. As a result, the oil industry confidently expanded into petrochemicals in the late 1970s. By the 1990s, with a total refining capacity of 1.2 million barrels per day, Singapore had become the world's third largest oil-refining center after Houston and Rotterdam, the third largest oil trading center after New York and London, and the largest fuel oil bunker market in volume terms. Singapore is also a major petrochemical producer.
To overcome the natural doubts of investors from advanced countries over the quality of our workers, I had asked the Japanese, Germans, French, and Dutch to set up centers in Singapore with their own instructors to train technicians. Some centers were government-financed, others were jointly formed with such corporations as Philips, Rollei, and Tata. After 4 to 6 months of training, these workers, who were trained in a factory-like environment, became familiar with the work systems and cultures of the different nations and were desirable employees. These training institutes became useful points of reference for investors from these countries to check how our workers compared with theirs. They validated the standards of Singapore workers.
In short, the very words of the late great leader proved them all wrong. Kishore Mahbubani, a former United Nations (UN) diplomat, and the former dean of the National University of Singapore's Lee Kuan Yew School of Public Service, even said words that practically (and indirectly) proved Davide's statement wrong. Mahbubani said that it's a third-world mentality to say that foreign investors are rapists and exploiters. Instead, Mahbubani said that foreign investors create jobs, teach new skills, and bring in capital. Who else knows Singapore better than the Singaporeans? Who else can be more credible than people not only who are from Singapore but who took part in building Singapore into the nation that it's become today?
It's been several decades since the Filipino First Policy. However, it only caused the Philippines to fail to a certain extent. Sure, living in the Philippines would be better than living in Venezuela or North Korea. However, it could end up like that should the restrictions become higher. Inflation is a result of supply and demand. When demand is low and supply is high then prices go low. If demand is high and supply is low then prices go high. When a company has too many customers--it will soon meet its constraint and must increase costs as a result. If a company doesn't increase costs then it can't keep up with the quality of the service. However, there's so much a company can handle which can explain why the prices of utilities are high and services eventually get lower quality. In Venezuela, a simple Google search will tell you of the food scarcity where people even eat rotten meat. North Korea at night is even very dark in contrast to China and South Korea. Decades of Filipino First Policy had made the Philippines left behind. Yet, people still insist on it even after it's been proven wrong by neighboring Southeast Asian countries like Singapore, Malaysia, Taiwan, and Japan.
Instead, listen to real intellectuals who made Singapore great like Lee Kuan Yew and Mahbubani. Don't listen to people who have talked a lot but never brought any significant progress? Have all these thought leaders in the Philippines who kept having wrong notions of foreign investments brought any real improvement? That's a question to ask. Who would you listen to between people who made Singapore a successful country or people who are holding the Philippines back? I'd listen to those who made Singapore great than people who still insist on obsolete ideals.