Market forces key to Lee's Singapore

IFR 2076 28 March 2015 to 3 April 2015
6 min read
Asia
Jonathan Rogers

SINGAPORE’S FOUNDING FATHER passed away last Monday and I have returned from a trip to Europe to find the city state convulsed with outpourings of grief that are unusual in a place renowned for its emotional reserve.

In the queue leading to the Parliament House, where Lee Kuan Yew has been lying in state during a six-day period of national mourning, people waiting to view his coffin were openly weeping. I have never seen anything like it in person.

The Straits Times, Singapore’s flagship newspaper, has run page after page of tributes since the news broke early on Monday of Lee’s death at the age of 91 from pneumonia. The tributes dwarf by column feet the coverage the British press accorded to Winston Churchill on his death in 1965 (I know this because my father kept copies as souvenirs).

The word “great” has been the most frequently used epithet in both the local and international press in summing up Lee, who was Singapore’s prime minister from 1959 to 1990. I’m not going to attempt to parse the meaning of that word here.

Certainly Lee presided over an extraordinary period of nation building as Singapore emerged from British colonial rule, but it was Lee’s canny economic policies and respect for financial markets – as well as his notoriously strong will – that enabled Singapore to punch above its weight on the international stage.

Lee’s canny economic policies and respect for financial markets enabled Singapore to punch above its weight

SINGAPORE WAS NEITHER a swamp nor a fishing village when Lee assumed power, as is often reported in the international media, but a successful Asian trading entrepot. Still, when Singapore was expelled from Malaysia in 1965, this little country, devoid of natural resources, appeared doomed.

More than most politicians of his era, Lee understood the pivotal role markets play in economic growth. He helped foster an offshore US dollar market in the 1960s that became known as the “Asiadollar” money market, and created a mindset that sought to position Singapore as a natural hub for capital market activity in South-East Asia.

The darker side of Lee’s tenure is openly acknowledged – even by his fans. Even the Straits Times, a newspaper known for its pro-government stance, has reminded readers in its tribute copy of Lee’s penchant for detaining opposition politicians without trial under Singapore’s internal security act.

Whatever the jurisprudential take on such actions, there’s no doubt that Lee Kuan Yew triumphed in the business of generating national wealth, political stability and racial cohesion in a country of diverse ethnicity. And his emphasis on education has produced a population that is one of the best schooled in the world and – most likely as a result – contains the most millionaires per capita.

What has happened since his death is a national introspection that I have never before witnessed in the decade-odd I have lived here. Social media has become a forum for a voluminous, vigorous and hyper-emotional debate.

Posts are tinged with nostalgia, gratitude (often bordering on the obsequious) and the comments of “haters” are promptly rebutted in the name of respect for the recently departed. The resulting melée is overwhelming.

Only the local stock market was unemotional in response to Lee’s passing, posting modest gains and suggesting that little material change to Singapore Inc’s outlook will occur as the result of his death.

Perhaps that should be no surprise. While it battles with Hong Kong for supremacy in the offshore renminbi market and as a potential venue for all Asian debt settlement (the long-planned Asiaclear system), Singapore’s willingness to adopt brutal mercantile price undercutting and pragmatic generosity on the tax front leaves it well positioned to build on Lee’s foundations.

ASIDE FROM HIS clear impact on Singapore, Lee’s importance to China hasn’t had the space in the press it deserves. A visit to Singapore in 1978 by China’s emerging leader Deng Xiaoping may have been key to the “light-bulb moment” that convinced Deng of the merits of capitalism.

The rampant economic growth and emergence of China as a global powerhouse probably dates from that visit. Deng abandoned his official itinerary so he could spend hours questioning Lee on just how he had produced the order and prosperity he saw around him. To many observers, Singapore became China’s blueprint for an economic transformation that remains ongoing to this day.

It is ironic that Lee Kuan Yew did not live to see out the celebrations for Singapore’s 50th anniversary in August. But perhaps it was apposite. The soul-searching prompted by his death has caused Singaporeans to reach for the essence of their identity. The mourning period will give way to celebration and further reflection.

As 50 years of sensational economic growth gives way to something more modest the central question will be how to keep the Singapore success rolling.

Perhaps one should observe the shiny skyscrapers of modern Singapore and summon the words written on the gravestone of Sir Christopher Wren in Saint Paul’s Cathedral in London. For Wren, the architect of the cathedral and the rebuilder of London after the Great Fire of 1666 (who, coincidentally, also died at the age of 91), the epitaph reads: “If you seek his memorial, look about you.”

Jonathan Rogers
Lee Kuan Yew funeral