Singapore: Sovereign City
March 7th, 2018
Epistemic status: Highly uncertain, asserted with ~40% confidence. Low enough that I didn’t publish this piece when I originally wrote it in May of 2016. But a recent first trip to Singapore reaffirmed the intuitions in here. Even if the argument is wrong, I think it’s wrong in interesting ways, and I want to start a conversation about it. Plus, since originally drafting this essay I now have the concept of "epistemic status" in my toolset (h/t Scott who got it from Gwern who got it from Muflax), so this seems like a great time to use it.
Despite seemingly insurmountable challenges, Singapore has flourished over the last 50 years. Many countries look to Singapore as an alternative model to western-style governance, and even more import experiments after they have been tested in Singapore’s "sandbox". However, the international community has largely overlooked a key lesson from Singapore’s meteoric rise: its form as a city-state.
Few expected Singapore to survive when it became an independent country in 1965. It was a tiny, impoverished island with a diverse population of recent immigrants. They had little shared history and no natural resources. Singapore had been colonized, occupied, and abused for over a century, and it was surrounded by hostile nations in a region succumbing to pressure by Communist forces.*
Despite these seemingly insurmountable challenges, Singapore has flourished over the last 50 years. Here are just a few measures of the city-state’s success:
- Singapore’s per capita GDP has skyrocketed from less than $500 in 1964 to over $52,960. Starting at a similar level as Mexico and South Africa, Singapore’s per capita GDP is now third highest among nations worldwide.
- Unemployment is below 2%.
- Singapore is ranked as Asia’s most environmentally sustainable city.
- Singapore modernized without imposing "Western political models on Asian realities".
In light of these dazzling achievements, many countries look to Singapore as a model of governance and a source of urban innovation. Singapore’s example has been particularly influential in China. Lee Kuan Yew, the Prime Minister of Singapore who governed the city-state for the first three decades of its independence, is sometimes called "the father of modern China". Deng Xiaoping, the Chinese leader who led his country through market-economy reforms after Mao’s death, took direct inspiration from LKY’s blend of authoritarian governance and liberal economic policies. Deng saw the Singapore Model as proof that a country could modernize without surrendering to "wholesale Westernization". Thousands of Chinese officials are sent to Singapore each year to learn from the city-state’s experience, and, after being anointed in 2010 as China's next leader, one of the first things that Xi Jinping was drop in on Lee Kuan Yew.
"If I had only Shanghai, I too might be able to change Shanghai as quickly," Deng once complained, reflecting upon Singapore’s meteoric rise. "But I have the whole of China!" In this comment, Deng got to the heart of key lesson from the Singapore experiment: Singapore’s form as a city-state was critical to its success.
Lack of resources was a blessing in disguise
At first, Singapore’s small size was considered a major disadvantage. The city-state imported all of its food, energy, and fresh water, and the surrounding region was embroiled in ethnic conflict, nationalist fervor, and Communist insurgencies. However, Singapore’s lack of resources proved to be a blessing in disguise. Its reliance on the outside world forced the country to think in terms of a global network. To survive, it had to focus on being a valuable, stable trade partner. Many other newly-independent nations turn inward, focusing on ideological conflict rather than economic progress. Self-sufficient countries do not thrive under these conditions, but neither do they collapse (not immediately, at least). The consequences are much more immediate for a nation like Singapore that depends on trade for survival.
Singapore’s geometry superimposed over the San Francisco Bay Area. Singapore is tiny!
It was clear from the beginning that economic relationships were Singapore’s only asset. The British East India Company had chosen Singapore as a trading post because it had a sheltered deepwater port, and it was perfectly situated along busy shipping routes that connect Europe to China. After independence, the small country took advantage of its strategic location, positioning itself as stable trading partner and an international center for commerce. This was particularly valuable given the instability of its neighbors. In a volatile but fertile, populous, and productive region of the world, Singapore was a sanctuary for Western business executives.
Singapore’s dearth of resources also allowed it to sidestep the resource curse, the paradox that countries rich in natural resources tend to experience conflicts over extraction and allocation. Countries in which commodity exports comprise a large portion of GDP are far more likely to experience armed conflict. (According to The World Bank, a country in which commodity exports comprise 5% of GDP has a 6% risk of conflict; meanwhile, the chance of conflict rises to 33% when exports are 25% of GDP.) As as a result, these countries tend to undergo economic stagnation and social unrest. In contrast, Singapore focused its energies on value creation rather than value extraction, because there were no natural resources over which to fight.
The city-state prioritized infrastructure from the very beginning to underscore its function as a sanctuary. When it was still struggling to make ends meet in the 1970s, Singapore upgraded its airport to be a world-class transportation hub, recognizing that it served as both a functional connection to the outside world and a symbol of the nation’s desire to join the international community. This costly investment extended past the airport terminal to every detail that foreigners might seen during their travels through Singapore. The immigration counter is exactingly efficient, and the roads leading from the airport to the business district of the city are meticulously maintained and lined with shrubbery. LKY once said:
I thought the best way to convince them was to ensure that the roads from the airport to their hotel and to my office were neat and spruce, lined with trees and shrubs. . . . Without a word being said, they would know that Singaporeans were competent, disciplined, and reliable, a people who would learn the skills they require soon enough.
The city-state also emphasized "soft" infrastructure. Sound fiscal and monetary policies ensured macroeconomic stability, and the government has run budget surpluses almost every year for the past five decades. It set competitively low taxes for pioneer industries, while heavy investment in education combined with zero tolerance for corruption and crime made the island even more attractive to businesses. This focus on stability, business conditions, and human capital underpinned investor confidence, which in turn improved the prosperity of the country. Today, the World Bank ranks Singapore as the "best country in which to do business", and the city-state has held that title for over a decade.
Singapore's small size enabled it to reap the benefits of authoritarianism while avoiding the worst of its costs
LKY is often called a "benevolent dictator" or, less generously, a "ruthless tyrant" for his autocratic style of governance. Lee’s party, the People’s Action Party (PAP), has remained in power almost completely unopposed for the past five decades. His country is infamous for its harsh punishments, media regulation and occasional censorship, and a parliamentary system in which it has proved curiously difficult for the opposition to do well. The country’s record on LGBT rights is particularly dismaying, and its punishments for drug-related offenses are extremely harsh.
I am opposed to many of these features of Singaporean society. I am unconvinced that these human rights violations were ever important building blocks for Singapore's social cohesion, and it at least seems clear that the city-state has now reached a level of stability where the government can safely loosen its iron grip on social life.
However, for all of its flaws, it is impossible to argue that this "soft" authoritarianism hasn’t produced results. Singapore’s prosperous if constrained society has achieved both a far higher quality of life and higher degree of freedom than many of its peers who took a more democratic approach.
The continuity of single-party dominance has major advantages over a more disjointed system. Many Singaporeans argue that they have the "perfect compromise between accountability and efficiency". Their democratic elections ensure politicians are on track, but they can "take the long view" rather than capitulate to short-term interests because they know they are likely to win. "Our strength is that we are able to think strategically and look ahead," said Lee Hsien Loong, Singapore’s current prime minister. "If the government changed every five years it would be harder."
Singapore is infamously strict when it comes to public behavior.
Singapore's small size enabled it to reap the benefits of authoritarianism while avoiding the some of its costs. Its autocratic governance is tempered by the fact that the country is a tiny city-state, interconnected with the rest of the world. If its citizens are unhappy, it is relatively easy for them to leave for one of its neighbors. By contrast, if a citizen of a much larger state—say Mexico or Germany or even a large sub-federal entity like California—is unhappy with the system, (s)he would have to move much farther to escape the clutches of that unsatisfactory government.
Singapore’s dependence on trade also makes it far less likely that excessive abuse of its citizens would occur in the first place. Its citizens have economic and personal ties stretching all around the globe. If Singapore were to stop being such a benevolent dictatorship in favor of a more violent, repressive approach, the international community would have incredible leverage over forcing the government to change, because the island is wholly reliant on relationships with the outside world.
Beyond that, Singapore’s success rests upon its populace being healthy, well-educated, and trustful of the government. "Even the most cynical assessment of Singapore involves the government taking enough care of the populace to keep making money from it," said my friend Visakan who lives in Singapore. "For Singapore Inc to make more money, citizens need to be educated and skilled, so repression will never reach resource-curse levels."
Finally, it’s important to consider Singapore’s politics from the perspective of its small geographical scope. Singaporean elections seem shockingly uncompetitive when measured against other democratic nations. However, the nation is as much a city as it is a country, and in cities one-party rule is the norm, not the exception. Singapore’s Law Minister K. Shanmugam noted that "cities like Chicago, San Fransisco, and New York City … have enduring one-party rule", though they are also unquestionably democratic. A single party has dominated elections in each these cities for decades because its policies reflected the needs and preferences of that population, not because it has coerced the populace to support it.
An urban sandbox
Singapore’s small size makes it remarkably maneuverable. It has the sovereignty of an independent country, so it is free to determine its own destiny. At the same time, it is manageably small; its local scope makes it easier for leaders to understand and respond to the needs of their citizens. The government also doesn’t have to make as many compromises, because it is much easier to reach a consensus within a small group than in a larger, more disparate society.
The government’s single-minded focus on economic development could not have been achieved without a large degree of autonomy early on. In the Singaporean system, leaders can act boldly and take risks for the benefit of the society rather than pandering to special interests for the sake of re-election. For example, Singapore was the first place in the world to implement congestion pricing, and it has one of the highest rates of infrastructure investment in the developed world. The government’s autonomy allows it to take this long term view and make unpopular choices that are best for the city state as a whole rather than shortsighted special interests.
Singaporean citizens have steadily gained political power over time, but the government’s ability to act decisively remains one of the city-state’s most important assets. The country recently announced a comprehensive Smart Nation initiative, "the most extensive effort to collect data on daily living ever attempted in a city". In typical Singaporean fashion, the initiative is focusing on building smart infrastructure rather than specific one-off projects, recognizing that many potential applications may not be known until the system is fully implemented. An article from the Wall Street Journal imagined that the data produced by these systems might for example enable the government "to predict … how infectious diseases might spread or how crowds could react to an explosion in a shopping mall".
The city-state has been able to commit to this "whole-of-nation journey" because it has the maneuverability to guarantee the infrastructure, legislation, funding, and holistic vision necessary for this rally the relevant stakeholders. The entire nation—the government, the private sector, and the individual citizens—has bought into this effort in a way that a larger country could not.
Singapore recognizes that its pioneering smart city initiatives will have impact far beyond just the shores of its tiny island nation. Its Smart Nation: Singapore announcement website explains that "such solutions are essential not just for Singapore but the entire world" and that "global trends indicate two-thirds of the world will have migrated into cities by 2050".
The city-state has also positioned itself as an innovative hub for financial technology (fintech). It overhauled and streamlined its regulatory framework in order to attract entrepreneurs, and it has opened a "sandbox" to enable fintech startups to test unproven products in a more flexible, forgiving environment.
"If any one of you has an idea, or a product, or a service, which makes life better for citizens: come to Singapore," said Singaporean foreign minister Vivian Balakrishnan. "Prove it, test it, prototype it, upscale it. If your solution works, we will buy it from you."
Singapore has a real competitive advantage here; its maneuverability enables it to make bold changes to the ecosystem, and its small scope minimizes the potential for causing damage to the wider international economy. By contrast, larger systems like here in the US are far more entrenched, because the sheer size of the American financial system makes it hard to quickly change the direction of its momentum, and the risk of doing so is far greater. Singapore’s ability to act as a fintech sandbox is particularly valuable within this particular industry. So many budding fintech entrepreneurs are forced to abandon their plans due to the high regulatory burden most developed countries place on the financial sector. Singapore is unique in both providing room for experimentation as well as having a developed, prosperous economy. Very few countries can check both of these boxes. Singapore’s openness gives it a distinct advantage, one that would not have been possible if Singapore were a much larger country.
What should we learn from Singapore?
By serving as a sandbox for new ideas about governance, Singapore has had a global impact disproportionate to its size. It has exported novel approaches to nation-building, and it continues to work at the cutting-edge of social innovation. However, we have all but missed an important lesson—the city as an autonomous political unit is a powerful force.
Large states have lost control over their destiny to a terrifying extent. The United States has a level of complexity and patchwork of needs that cannot be adequately addressed at the tier of government that is currently responsible for them. And unfortunately the US’s challenges are the rule rather than the exception among nations of its size. Instead, countries should vest far more power at the city level. Cities, which are already the hub of national life and international relationships, should be further empowered to act as active problem-solving agents and assert their domestic autonomy.
There are some promising initiatives moving in this direction. The C40 Cities Climate Leadership Group has recognized the importance of urban leadership, bypassing their nations’ inability to escape gridlock and effectively respond to climate change. China’s special economic zones (SEZs) have followed Singapore’s lead as testbeds for economic and cultural innovation. Their small size enabled them to assert domestic autonomy and international credentials without putting all of China at risk. After they proved to be successful, the lessons learned in these zones could then be carefully disseminated across China.
These sorts of initiatives should become more common. Vesting power in smaller political units would encourage nations to be better neighbors, allow cities to push the boundaries of what it means to govern while maintaining a safety hatch for unhappy citizens to exit, and enable profound experimentation.
Caveats and open questions
Key open questions, i.e. the places you’re most likely to change my mind:
- Figures reported by the Singaporean government exclude large swathes of the population, but it’s hard to know exactly how much. The people they exclude tend to be "temporary" migrant workers, who make significantly less than their naturalized and permanent resident peers. We should expect the numbers we see to be less dazzling if we were to include them in the numbers. Even if we make the extremely conservative assumption that this doubles the population and that the migrant workers make zero income (which is clearly an overly conservative assumption), it’s still far wealthier than any other Asian country.
- Singapore — 52,960 USD per capita, if we divide by 2 with our generous assumption about migrant workers it's still 26,480, still one of the highest in all of Asia.
- Vietnam — 2,185 USD per capita (~13x)
- Malaysia — 9,502 USD per capita (~2.5x)
- Indonesia — 3,570 USD per capita (~7.5x)
- Thailand — 5,907 USD per capita (~4.5x)
- China — 8,123 USD per capita (~3.25x)
- A lot of rich people move to Singapore after they’ve earned much of their wealth. It’s a refuge for lots of Chinese and other Asians who’ve made a lot of money in their home country but want the stability and quality of life of Singapore.
- "A counterpoint might be, maybe any reasonably networked citystate along a major trading route chokepoint would have 5x to 10xed." — Visakan
- "‘Impoverished island’ is disputed." — also Visakan. It makes for a great story that serves political ends, so his point on this makes me particularly skeptical that the starting point I compare against is the proper measuring stick. He also pointed out that the modern state of Singapore was founded right after WWII and a brutal Japanese occupation. As a result, measures from that time are a low point. It’s kind of like comparing your mile time between when you had the flu and a week after you’re back to health—it sure looks like you’ve gotten a lot faster in a short amount of time, but really you’ve just gotten back to where you’d otherwise be.
- "Home ownership rates are kinda muddied by the fact that rent is exorbitant" — also Visakan. The government subsidizes the purchasing of government-owned flats and builds them aggressively, so home ownership is cheap (relative to other major world cities). This isn’t exactly a counterpoint, because it still leads to high rates of homeownership, but under a certain value system one could argue that it "doesn’t count" or counts less than homeownership in the States. (Though that’s subsidized too, just in less visible ways…)
- An Economic History of Singapore offers a great overview of the city-state’s journey from humble beginnings to its immense prosperity. It also offers a perspective on some of the sacrifices made along the way to this success; in particular, Singapore’s wealth inequality has been stubbornly high through the course of its history, though income distribution has become more equal.
- Lee Kuan Yew is a total badass. He led the People’s Action Party for over a half-century, in which he brought Singapore out from British colonial rule, through Singapore’s brief matrimony with Malaysia, and into independence marked by decades economic prosperity. In the first draft of this essay, I constantly found myself going on tangents about LKY, but I sadly had to slash many of them out because they distracted from my main point. But I don’t want to keep you from learning about this incredible (and controversial) man, so here are a few recommendations: This WSJ article by Orville Schell is a beautiful introduction to LKY, and his memoirs are definitely worth reading, too. Conversations with Lee Kuan Yew by Tom Plate is a quick, enjoyable read in dialogue form from a series of interviews the author conducted shortly before LKY’s death. It doesn’t go into as much depth as I would have liked, but it gave me a much better sense of LKY’s personality and outlook than some other profiles of him.
- This article from The Economist entitled "Go East, young bureaucrat" is a fascinating look into the inner workings of Singapore’s bureaucracy. Arguments for benevolent dictatorship always struggle with the issue of how to maintain talent and honorable goals within government, and this article offers some fairly compelling answers to that question.
* Singapore had a complex, disjointed political history in the two centuries preceding its independence. Control had passed through the hands of a half dozen regimes, each with very different political structures and objectives. It had been ruled by the Sultanate of Johor, colonized by British India, occupied by the Imperial Japanese Army, and governed as a Crown Colony from London. It was briefly part of the Malaysian Federation following the dissolution of the British Empire but was pushed out after just two years. A quick timeline:
- Singapore began the 19th century as part of the Sultanate of Johor. In 1824, the island became a British possession and trading post under the British East India Company, and in 1826 it became part of the Straits Settlements under the jurisdiction of British India.
- During World War II, the Japanese invaded Malaya and crushed the Allied forces, resulting in what Winston Churchill called "the worst disaster and largest capitulation in British history". The Japanese occupied the island for the remainder of the war. The Allies bombed Japanese-occupied Singapore intensely, destroying much of the city’s infrastructure.
- After the war, Singapore briefly fell back under control of British India until the Straits Settlements was dissolved in 1946. Singapore then became a separate Crown Colony, controlled directly from London. However, the British Empire’s failure to defend its possessions in South East Asia had destroyed its credibility as an infallible ruler, and its control over the region weakened in the decades following WWII.
- In the wave of nationalism sweeping the colonial world, Singapore joined the Federation of Malaysia in 1963. At only about 1 million residents, the tiny island thought it couldn’t survive alone due to its scarcity of land, resources, and markets, and it wanted Malaysia’s support in a region succumbing to pressure by Communist forces. However, the Federation had defined its identity by its Malay majority, which didn’t fit with Singapore’s largely Chinese population. After two years of ethnic hostility, Singapore was expelled from the federation and forced to become an independent country.
When Singapore first gained independence, the country was deeply divided due to its colonial history and polyglot population. (Singapore’s demographic breakdown upon independence: 75.4% was Chinese, 13.6% Malay, and 8.6% Indian.) LKY concluded that "everyone would simply vote for their own ethnic group and overlook the common interests of the country" if full democracy were implemented. In his foreword to Lee’s memoir From Third World to First –– The Singapore Story, Henry Kissinger wrote:
When the state comprises diverse ethnic groups, political opposition is often considered an assault on the political validity of the state rather than of a particular government.
By the time Singapore gained independence in 1965, many other post-colonial societies had already broken away from their European rulers and experimented with various forms of government. "The advantage we had was that we became independent late," explained LKY. "In 1965, we had 20 years of examples of failed states. So, we knew what to avoid — racial conflict, linguistic strife, religious conflict. We saw Ceylon [modern-day Sri Lanka]."
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