STORY OF REBUILDING SINGAPORE PART 2
From our first part we knew, in 1965 Singapore was already facing an economic crisis and apart from that they had no natural resources, no population advantage, no industries,very less factories and most importantly their biggest employer, that is, the British Army was planning to leave which was about to wipe out 20% of their GDP.
BASICALLY, EVERY POSSIBLE OBSTACLE THAT YOU CAN THINK ABOUT TO PULL THE COUNTRY DOWN TO EXTREME POVERTY WAS BEING FACED BY SINGAPORE.
So the question is:-
Who is this Leader? What was his strategy?
And more importantly what can a country like India learn from the incredible case study of Singapore?
This incredible person That i am talking about is Lee Kuan Yew
and his strategy can be summarised in 3 important pillars that laid down the foundations for Singapore's Progress.
The first thing he did was to identify the risk points and design a strategic solution for each one of these high risk elements. and before getting into the act Lee Kuan Yew spoke to the British Authorities and convinced them to stay till 1975 because had the Britishers left immediately the island would have been left in ruins. Thankfully, the Britishers agreed.
And that is how the countdown started for the people of Singapore and Lee Kuan Yew had just 10 Years in hand to turn the situation around for Singapore.
Now in 1965, there were 3 areas wherein they possessed extremely high risk-
Number 1- The British Army was planning to withdraw so they had to build an army from scratch because during the same time Indonesia was facing a military coup because of which the government in Indonesia had fallen and If Singapore did not have an army of their own either a country like Indonesia could have invaded them or there could have been an insider threat.
Number 2- The Britishers also employed a lot of people which is why at least 30,000 jobs had to be created before the Britishers left.
Number 3- Lastly but most importantly, because there were no industries or a lot of factories they had to build the infrastructure just so that they could either build businesses of their own or invite for an investment into the island.
And this is where the first pillar came in and that is building an army from scratch. Now to fix this issue, Lee Kuan Yew got in touch with multiple countries like India and Egypt. But nobody actually came to help. That is when, like a guardian angel Israel came to their support. And just like Israel national service was made mandatory for all men above the age of 18 by something called the National Service Act in 1967.
Now this gave the island 2 major benefits.
The first was obviously an army of their own but secondly each one of these cadets was taught in school that the greatest threat to their country is not an invasion from an outsider but the conflict between the insiders. And the military practices started to lay the foundations both for the army and the unity of the country.
And even today the value of unity is engrained in the lessons taught in the schools and colleges of Singapore. Then we move on to the Second high Risk element and that is creating enough jobs.
And this is where Lee Kuan Yew's perspective of learning from other countries came in very very handy. To tell you about it.
People just like today we have got software companies that are creating jobs all across the world the era of 1940s and 50s was all about the textile industry. And this is where countries like Hong Kong and South Korea were also undergoing a similar situation like that of Singapore in the 1960ss wherein they had a poor economy and they did not have enough jobs.
So you know, what they did?
They opened up their country and invited textile industries from all across the world to create jobs because they could provide them with the cheapest labour rates in the world. And Lee Kuan Yew understood the potential of this move way back in 1960s itself. During this time just like the textile industry was prospering in the 1940s-50s the electronics industry was prospering the 1960s. So way back in 1960s itself just like Hong Kong the Government of Singapore enacted new laws which would lower the labour cost and gave out amazing incentives to companies by lowering the taxes on imports and exports duties.
For example, If a company wants to move from one country to the other for manufacturing the only reason for their hesitance is the heavy investment that they have to make for land and infrastructure. So to make it easy, the Government would give them land at a very heavy discount and the import taxes on machines and equipment would be lowered to a rock bottom level. If you see, this is very similar to taht of Razor Blade model where in the land and import duties are like Razors which are given away at a dirt cheap cost just so that the government can create a recurring income out of the taxes on the profits of the company and the salaries of the employees. Now just to tell you how incredible and futuristic this vision was !
And immediately when things were going very well, a shocking news came in where in the Britishers announced that they were about to leave the country four years early in 1971 itself. And this meant that 30,000 people will be left jobless within that year itself.
But guess what!!!
By 1971 itself, Singapore had created so many jobs that not a single one of those people were left jobless. Not a single piece of land was left unoccupied. Not a single building was left unutilized. And every single resource was turned into an economic asset.
This is how Singapore evaded second Risk and that is loss of jobs due to the early departure of the Britishers.
And when this happened, the world knew that Singapore in not just an ordinary island but an extraordinary nation in the making. And this is what brings me to the third pillar and that is Strategic Infrastructure Investment.
Strategic Infrastructure Investment
People from 1963 to 1975, the government of Singapore took 14 loans from the World Bank and 10 of these loans were exclusively invested into the infrastructural projects. And two of the most mind-blowing projects are
1) The Jurong Port and
2) The Jurong Town Corporation (JTC)
Both these projects were implemented such that Singapore could leverage the only valuable asset they had and that is the strategic location for the trade. (Straight of Singapore.)
And the reason why i say they are mind blowing because Singapore invested $14 million to build the Jurong Port and today, the Jurong Port generates a revenue of more than $15 million dollars every single year.
Meanwhile the JTC was responsible for the major infrastructure projects like the cleanup of the Singapore river which was once dumping ground by the way, full of filth but today it has turned into one of the most beautiful and the most attractive tourist spot in the island. The JTC was also responsible for reclamation of land and many such major construction projects on the island.
And guess what???
The same Jurong Town Corporation that was initiated during the old days of Singapore today it has become a major contributor to the economy and in 2020 alone it has generated a revenue of $2.43 billion.
This is what happens when the government knows how to do Business!
Now we move onto the most incredible infrastructural project of Singapore and that is the fixing the housing crisis!
If you remember, Singapore was once one of the largest slum colonies in the world. And these slum colonies again brought 3 potential threats to the country.
Number 1-The slum colonies occupied a large area which could have been used for more productive ventures like industries and hotels.
Number 2- These slum colonies were in a very unhygienic condition and could have resulted into disease outbreak in no time. And most importantly , these colonies were formed in clusters and led to communal segregation.
For Example,
There was a cluster where in only Tamilians lived or the other cluster wherein only Chinese lived. Now on the outside this might not look like a big deal but you know what guys?
Communal segregation is one of the biggest threats to the society because communal segregation is what leads to communal violence.
You don't believe me!
Number one, in order to make houses affordable they made it mandatory for the people of Singapore below the age of 55 to save 20% of their income into a social savings fund and this is what was called the Central Provident Fund.And the employers were also asked to contribute 17% to this fund. And this money could be spent only on specific essentials or on housing. And for those who can't afford it, apartments were given at subsidized rates on rent so that when these people had enough money in their savings account they could take a low interest loan, eventually, buy the house itself.
Number two, to prevent these societies from deteriorating into modern slum, HDB ensured high quality maintenance and made hygiene a priority because of which the public housing of Singapore looks like an elite township.
For example, The Malays can occupy 25% and Chinese can occupy 87% of the block. And because of the wonderful move the chinese, the malays, The Tamilians, and all other minorities lived in the same neighborhood. And most importantly, they had equal access to both the housing facilities like parks and government facilities like metro and railways. And this avoided clusters to a large extent and minimized one of the biggest threats that haunted Singapore for decades and that is Communal Violence.
And there are very less clusters because of which all the communities in the island live peacefully together. As a result of which, the best part is politicians have not been able to use communal disputes to create a vote bank.
Today, Singapore is such an amazing place to do business that people brag about how you can open up a company in Singapore in less than 3 hours. And the medical facilities are so good that the leaders of other nations take a special trip to Singapore just so that they can get admitted into a hospital and get themselves treated.
These are the high standards that Lee Kuan Yew set for the people of Singapore and in 35 years of his governance, the per capita GDP of the country grew by astonishing 2800%. And went from just $400 to $14,500. And Singapore went from being a slum colony to becoming a land full of high rises and skyscrapers. And the same Singapore which was once sinking in poverty has now become super prosperous financial and manufacturing hub of the world. And most importantly, Singapore went from being a vulnerable piece of Island to becoming one of the richest and one of the most powerful nations in the world.
Now we come to the most important part of case study and that is the lessons from this miraculous case study.
Lesson Number 1- Just like Singapore has mandatory military Service We need a system in India not because we want to expand the military but because today in India, in the name of nationalism, we have got pseudo-liberals and radicals popping up and in Twitter, you will see more often, both of these groups engaging in texting wars which results into nothing but futile debates.
But the underlying problem over here is these cyber riots won't take long before they turn into physical riots. So our generation needs to be taught the value of UNITY and the fact that there is a thin line between pseudo-liberalism, nationalism, and radicalism.
Lesson Number 2- Every politician, every leader and every Citizen in this country needs to understand the difference between Mindless Socialism, Conscious Capitalism and Evil Capitalism.
Mindless Socialism is when the government gives out unnecessary subsidies not for the progress of the people but to create a vote bank.
The other extreme of the same is Evil Capitalism wherein the government and the companies will try to make money even if it means charging for cancer medicines and making money out of the disease caused to the citizens.
And far far away from both these concepts is where we have Conscious Capitalism wherein the Government puts restriction on the citizens and spends every penny of the public fund to generate a return on investment (ROI) and runs a country like an Organisation which needs to channelise it\s profits towards the welfare of its citizens.
And most importantly, People just like World Class Companies teach us business lessons and marketing strategies, World Class Countries can teach us invaluable growth lessons on how to develop a country. And just like Lee Kuan Yew learned from Hong Kong and South Korea, it is important that the citizens and politicians learn from the success and failures of countries just so that we can become constructive critics of these policies and politicians can frame policies based on the learnings from these countries. This is the crucial step that we all need to take to become informed citizens of this democracy.
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