Speaking to The Australian newspaper’s foreign editor Greg Sheridan, PM Lee said that Singapore has been “lucky” and its government has been able to deliver on its promises. So you may not know or feel it, guys, but we’re already living like the Swiss – as promised.
Indeed, I had to read the article a second time to confirm that it was indeed our current Prime Minister and not our former PM Mr Goh Chok Tong who is saying this: “political deadlock is particularly a problem in the United States because of the way their system of government works”.
There is a nostalgic ring to the statement. I remember reading and hearing statements like this coming from PM Goh, ministers, MPs and journalists in the early 1990s. I can’t find and quote the exact words now, but our leaders and journalists strongly and brazenly purported that Western values were the reasons for the USA’s decline and Asian values were the reason for Japan’s booming economy in the early 1990s. I’m not sure how many people accepted the argument, but even though I was young and naive back then, I didn’t.
Canadian journalist (The Economist’s editor) Greg Ip wrote:
The year is 1990. Which of the following countries has the brighter future?
The first country leads all major economies in growth. Its companies have taken commanding market shares in electronics, cars, and steel, and are set to dominate banking. Its government and business leaders are paragons of long-term strategic thinking. Budget and trade surpluses have left the country rich with cash.
The second country is on the brink of recession, its companies are deeply in debt or being acquired. Its managers are obsessed with short-term profits while its politicians seem incapable of mustering a coherent industrial strategy.
You’ve probably figured out that the first country is Japan and the second is the United States. And if the evidence before you persuaded you to put your money on Japan, you would have been in great company. “Japan has created a kind of automatic wealth machine, perhaps the first since King Midas,” Clyde Prestowitz, a prominent pundit, wrote in 1989, while the United States was a “colony-in-the-making.” Kenneth Courtis, one of the foremost experts on Japan’s economy, predicted that in a decade’s time it would approach the U.S. economy’s size in dollar terms. Investors were just as bullish; at the start of the decade Japan’s stock market was worth 50 percent more than that of the United States.
Persuasive though it was, the bullish case for Japan, as fate would have it, turned out completely wrong. The next decade turned expectations upside down. Japan’s economic growth screeched to a halt, averaging just 1 percent from 1991 to 2000. Meanwhile, the United States shook off its early 1990s lethargy and its economy was booming by the decade’s end. In 2000, Japan’s economy was only half as big as the U.S. economy. The Nikkei finished down 50 percent, while U.S. stocks rose more than 300 percent.
What explains Japan’s reversal of fortune and its decade-long economic malaise?
For the answers, you may want to check out Greg Ip’s Little Book of Economics instead of just reading the Straits Times.
Of course, Mr Ip (Chinese) also talked about the subsequent tech boom in which many prospered and its subsequent crash in which many lost their shirts. There are opportunities and there are pitfalls. The more protected and regulated you are, the lower your glass ceiling. When PM Goh and then MITA George Yeo condemned Western values and swooned over booming Japan, I’m not sure if they had any idea that Japan would soon be on the path of decline and the Asian economic crisis was waiting in the wings.
When Asia sat in the economic doldrums towards the end of the last century, the “decadent” US saw a phenomenal tech boom. Yes, this was followed by a devastating crash, but the US was not sunk; not in the least the technology sector. Google stocks opened in 2004 at US$85. Less than 12 years on today, it’s trading at well over US$700. Facebook shares opened at $38 in 2014, plunged sharply due to scepticism but then took off to trade at over $100 today. Tesla stocks were launched at $17 in 2010. Today, it trades at over $220. All this took place in spite of Lehman Brothers going bust and a subprime crisis towards the latter part of the first decade in this millennium. Are the successful people in the US really concerned about their government “delivering” or not “delivering”? Is there something wrong with the Singaporean mindset vis-a-vis the “duty” of the government? Does the government need to “deliver” anything in the first place? Is the guarantee of “delivery” a reason for restricting press freedom and throwing dissidents in prison? Are fellow Singaporeans supporting these measures as necessary to sustain their sheltered and spoonfed lives in a dome?
To his credit, PM Lee admitted that information technology has changed lifestyles and the quality of life in Singapore but it has not shown up clearly in productivity numbers. Why? I think it may have something to do with people being required to be slaves and not masters of the system.
© Chan Joon Yee