Singapore

September, 1968

In 1959 there were many who doubted whether Singapore’s intense, impatient young Prime Minister, Lee Kuan Yew, could avoid being devoured by the Communist element in his infant People’s Action Party. The Communists were indeed strong, vocal, and politically predacious. Yet with cunning and incredible drive Lee and his nonCommunist associates outmancuvered and eventually caged the threatening minority. So effective were they that in the general elections last spring, the third since Singapore gained independence, Lee’s People’s Action Party ran unopposed in 51 of the 58 voting districts, and won a complete sweep of the elections. The Communists, through their front organization, the Barisan Sosialis, failed to contest even one seat.

Again there were dire predictions when, in August, 1965, Singapore was forced to withdraw from the Malaysian federation. The preceding months of union had been stormy ones, with racial rioting casting doubts on Lee Kuan Yew’s ability to forge a united multiracial society. After separation, Singapore was alone, with only a speck of land devoid of natural resources to call home, and a basically (80 percent) Chinese state bobbing precariously in a sea of Malay chauvinism. Many concluded that an independent Singapore simply was not a viable proposition.

Now, nearly three years later, the Singapore of no apparent viability, no future, is on to becoming an industrious, prosperous state. The years since separation from Malaysia are evidence of the island-state’s ability to survive. Yet once again grim forecasts are being heard, this time because of London’s decision to withdraw, by the end of 1971, the 50,000 British military forces and dependents based on the island. Say the pessimists, the security and economic problems that will create will be fatal. But as the doubters have been proved wrong in the past, it seems likely they will be proved wrong again.

Rugged Society

In essence, Singapore is a parvenu society. It must be to survive. There is no question that the island republic, with a land area of only 224.5 square miles — less than that of Greater New York — and a population that has just reached two million — less than that of Philadelphia — is presently facing its greatest challenge. The remainder of the 1960s and the early 1970s are, as the Singapore government has appropriately tagged them, “the crucial years.” They are the years during which the island republic must demonstrate that it can fend for itself without the underpinning of the British military or any other outside power. It is the period during which Singapore must come to terms with its lengthy unemployment lists: currently 76,000, or 9.7 percent of the labor force, and provide an estimated 43,000 new jobs a year to cover the normal increase in the employable ranks and those 35,000 displaced by the British pullout. And not least of all it must work out an amiable arrangement with its neighbors, Malaysia and Indonesia, both for economic progress and for mutual security, and carry on the effort to instill a sense of regionalism in the area.

The demand on Singapore’s multiracial (Chinese, Malay, Indian, Ceylonese, Eurasian) society was graphically explained recently by Lee Kuan Yew. “Singapore,” he said, ”is like a spinning top or perhaps more like a gyroscope. The moment it stops spinning, it topples and falls down. You can put a gyroscope on the edge of a table or on a string and it will maintain its equilibrium so long as it keeps up the momentum, the dynamism. If we keep it up for another ten years the chances are the momentum will carry the place for the next hundred years.” There is, in Lee’s view, only one way to keep up that dynamism — that is, by making Singapore a resolute, highly trained, highly disciplined community, a Rugged Society, as he calls it.

Pulling his own weight

If Lee fails, it won’t be because of slackness. Because Singapore is compact and urbanized, because nearly every family has a television set or radio, and because more than 60 percent of the population is literate, the Rugged Society can be put across. Through the mass media, and the four languages in official use (Malay, Chinese, Tamil, and English), the leadership reaches 90 percent of the adult population and incessantly pounds into their minds the one theme: Every single person in Singapore must pull his own weight, or else he deserves what he will get. “If we do not measure up to the challenge,” the message runs, “we deserve to perish either as individuals or together as a community.”

The decision by the British early this year to step up their phased military withdrawal by four years has, understandably, caused deep concern here. Singapore was of course making preparations for the pullout. But its planning was geared to the mid-1970s, not 1971. The initial plan, dating from 1965, was to create two infantry brigades in five years, then commence raising the naval and air forces during the remaining five years. This would stretch the armed forces program over a long enough period so that it would not be a financial burden on the economy, and sufficient time would be available to train the men needed to man the radar screens, pilot the naval patrol craft and the fighter-interceptors.

Those plans have now been scrapped, and the land, sea, and air forces must lie created simultaneously. It is one of the impressive qualities of the Singapore leadership — and a characteristic so vastly different from the narrow approach of so many other Southeast Asian leaders — that they do not assume to know everything and quite openly search for ideas and help from others. What kind of armed forces would Singapore require? The government studied several countries’ training systems. It chose Israel’s,

“Damn unpleasant”

Today some 20 Israeli advisers, sometimes referred to as “our Mexican businessmen” because of the sensitivities of Singapore’s Muslim neighbors, are putting young Singapore citizens through their paces and molding them into the hard core of the island’s defense forces. All able-bodied men (and starting next year, women, in good Israeli fashion) between the ages of nineteen and forty-five must do national service. Singapore, in effect, plans to make its entire adult population into some form of defense force, ranging from the hard-core military units to a popular ragtag Vigilante Corps. It hopes to be able to field 100,000 soldiers by the mid-1970s. “Not enough to make us an aggressor,” says one official, “but enough to make it damn unpleasant for anyone who wants to start trouble.”

Singapore feels it needs at least a small navy to help keep the vital shipping lanes open, and a sophisticated air defense network to guard against surprise attack. At best, the island can provide only patrol craft for its navy and must depend on the cooperation of Malaysia and Indonesia in guaranteeing unhindered shipping. The problem of air defense is expected to be solved in two ways: first, Singapore will raise and support two interceptor squadrons (of about 12 aircraft each, probably British-built) together with local antiaircraft defenses; second, it will cooperate with Malaysia in manning radar defenses and perhaps groundto-air missiles. Talks this year between Britain, Australia, New Zealand, Malaysia, and Singapore are aimed at cooperation among the five countries or in providing for the area.

The problem of creating adequate security is not really hinged to immediate military contingencies. There is, for the moment at least, no threat from either of the two close and potentially antagonistic neighbors, Malaysia and Indonesia. By providing an effective military force, however, Singapore is saying it is not to be trifled with. It is also saying that should the day come when a regional defense pact is a realistic proposition, Singapore, tiny though it is, can contribute its share. More important, it is saying to the potential and crucial foreign investor that the island will remain secure even after the British have left.

The question of assuring Singapore’s security as a means of enhancing the investment climate is of paramount concern. Not only is Singapore faced with the task of maintaining its economic growth and reducing the high unemployment; it must during the next four years take steps to offset the economic effect of the British withdrawal. In 1967, British military expenditures totaled $150 million, of which an estimated $115 million created actual income and employment for the island. This represented 10 percent of Singapore’s gross national product. Now, in four annual cuts, that figure will drop to zero. Singapore’s Finance Minister and the man rated second only to Lee Kuan Yew in power and influence, Goh Keng Swee, estimates that an additional $355 million above normal government and public spending will be needed between now and 1971 just to offset the loss from the British military. Britain is offering $120 million in aid during that period to help soften the effects of the cutback. Through additional public spending on construction, additional expenditures on the defense forces, and additional induced private investment, Goh Keng Swee believes the problem can be overcome.

The greatest challenge is Singapore’s ability to industrialize, to shift the major emphasis of its economic activity from that of the traditional storehouse and exchange, or entrepot, trade to that of manufacturing goods for export. The need for this shift harks back to the unemployment register, for despite the continued growth in entrepot activities, there has not been a corresponding growth in the numbers employed. In 1957 some 115,000 persons were listed as engaged in trade. In 1967 the figure was only 117,000. The reason for the failure of new employment to keep up with the new business is obvious: too much trading can be done too easily by one man and a telephone.

Farewell to sealing wax

The only answer, the Singapore officials believe, is rapid industrialization. Singapore’s industrial development really began only in 1963, and since then there has been an annual increase of 5000 to 6000 new jobs. Two or three times that number, however, is needed just to keep the unemployment rate at current levels. Yet despite the pressure of need for any and all new employment, the economic officials are turning to a more selective and discriminatory policy toward industrial projects. In the words of Goh Keng Swee, “the shoes and ships and sealing wax phase of industrialization is over.” What Singapore wants now is those industries which have the greatest potential for longterm growth. “All proposals are welcome,” Goh says, “but some will be more welcome than others.

In particular, Singapore has determined it has no future if it depends on the light industries that increasingly large numbers of developing states have taken up. Singapore must leapfrog into the more sophisticated fields: electronics, shipbuilding, engineering and metal fabrication industries, aircraft repair and maintenance — all labor-intensive, all with substantial international markets, and all requiring other industries for support.

A second field that the island republic plans to enter with its customary zest is tourism. Last year 204,852 tourists visited Singapore, including, at the top of the list, 53,548 Americans. This was a 59 percent increase over the 1966 total. Singapore figures it can do much better: close to one million by 1975.

White-collar consciousness

With employment the overwhelming problem, with an estimated 75 percent of the population under thirty-five years of age, population control is of high priority in Singapore. The birthrate has been reduced to 2.5 percent compared with 4.1 percent eight years ago. More than three quarters of all maternity cases pass through one hospital, a fact the family-planning people quickly spotted and turned to good advantage. When an expectant mother enters the hospital and the labor room, a family-planning representative is there to assist her and at the same time begin the pitch for birth control. Shortly after the woman has given birth, she again is visited by the family-planning representative and again is told the advantages of birth control. Not surprisingly she listens, and later shows up for the complete course in family planning. The birthrate goes down.

Education is a factor that weighs heavily on Singapore’s future, especially now that it is turning its attention to industries requiring a more highly skilled labor force. Here Singapore’s record is not so good, but improving. There is only one polytechnic institute, and a severe shortage of technical and vocational schools. As the able and at times excitable new Minister of Science and Technology, former Deputy Minister Toh Chin Chye, pointed out in April, Singapore is going to have to lose its white-collar consciousness. In Singapore last year only one student out of every eight was receiving even a minimum amount of vocational or technical education. Steps now are being taken to improve this situation, including the setting up of more production and training centers like the $660,000 technical training project being sponsored by Japan.

The problem then is to attract the new export industries. Singapore, to be sure, has a lot in its favor. It straddles the crossroads between the Pacific and Indian oceans, and through years of entrepot activity, had developed the necessary insurance, banking, and financial facilities. (There has been occasional talk of a Panama-type canal across the Isthmus of Kra, a canal that would considerably shorten the distance between the Indian and Pacific oceans and undermine Singapore’s position. But this remains at the talking stage and is still too far in the future to be of immediate concern.) Its population is energetic and its society has long been urbanized. It has the unique quality in Southeast Asia of having no stubborn traditions and myths to impede modernizing forces. Although its domestic market is small — though larger than the two million population suggests, for the per capita income of $640 is second in Asia only to Japan — it is located next to the potentially vast outlet of a now resurgent Indonesia.

Cornucopia

As a further inducement to investment, the government has come up with a number of incentives that truly make it seem like the best bargain in Asia’s bargain basement. Investors are offered land, buildings, five-year or longer tax holidays, 100 percent foreign ownership if desired, loans from the Economic Development Board (EDB) up to 50 percent of the cost of machinery and equipment and 70 percent of the value of the factory building, 90 percent tax exemption for at least 15 years on profits of exports, complete and easy repatriation of capital investment and profits, and virtually no duties on imports of raw materials.

The aggressive Economic Development Board, however, is not content with simply offering this cornucopia of incentives and waiting for the investors to gather round. The board was created in 1961 in part to cut through the red tape so often encountered in Asia. It can supply the potential investor with fast and final answers to his needs, because it can make decisions binding on the government but without having to clear them with the politicians and bureaucrats. And this is done with vengeance. Take the case of a large magazine publisher currently printing in another Asian city. At a social gathering one recent Friday evening in Singapore a representative of the EDB asked a representative of the magazine why the magazine did not publish in the island republic. Somewhat stunned by this sudden and direct approach on a social occasion, the magazine representative hemmed and hawed but finally under continued pressure began ticking off a few difficulties that came immediately to mind: specialized staff would have to come to Singapore, and that would require visas; the right kind of printing plants were not then available in Singapore; it would be necessary to have a personal income tax situation at least as favorable as in the present city of publication. The EDB representative made a mental note of all this. The magazine representative more or less forgot about it. The following Monday morning, back at his office in the other city, the magazine representative received a call from Singapore. It was the gentleman from the EDB who was happy to say that the visas had been okayed, the income tax arrangements had been made, and the government would finance the necessary printing plant. When would the magazine like to move?

Filling station

There is little doubt that Singapore is being successful in its efforts to attract new investment. At the end of 1967, total U.S. investment alone stood at about $50 million; at least another half dozen American firms were in the final stages of negotiations on opening plants. Both Mobil and Shell oil companies have opened refineries on the island. With the vast oil fields in neighboring Indonesia feeding refineries in Singapore, the island hopes to become the marine filling station of Southeast Asia. The British shipbuilding firm Swan Hunter has been given the rights to convert the military dockyards to civilian use. Negotiations also are under way for the use of the British air bases for civilian aircraft maintenance and repair. The Economic Development Board in fact receives some 150 inquiries a week on industrial possibilities.

Three developments since the separation of Singapore from Malaysia have contributed to the strengthening of Singapore’s position. First, the break with Malaysia itself forced the island to look more seriously for wider markets for its manufactured goods. The abortive Communist coup in Indonesia in 1965, followed by the rise of General Suharto and his milder mannered crew, who see more advantage to developing Indonesia than attacking neighboring states, has helped tremendously. Trade between Indonesia and Singapore is approaching the record preconfrontation levels. The other boon to Singapore’s exporting industries is the war in Vietnam. South Vietnam took $102 million worth of goods from Singapore in 1967, though about 80 percent of the flow consisted of petroleum and petroleum products. Another important factor is that Singapore is not letting politics hinder its hunt for markets. Most recently it has established trade links with the Soviet Union and several Eastern European countries, selling them everything from shoes to Anchor Beer.

Lee Kuan Yew and his administrators fully recognize the difficulties in bringing about regional cooperation. As the Foreign Minister, S. Rajartnam, remarked a few weeks ago, “Cooperation between economically weak and politically unstable units, with all the goodwill in the world, cannot ensure rapid growth and progress. To achieve this we must have developed and more advanced partners in a joint enterprise for common security and prosperity.” Lee, Rajartnam, Goh Keng Swee, and the other senior officials know they cannot force on the rest of Southeast Asia their attitude and outlook. But by example they can demonstrate the value of modernization.

— Arthur C. Miller