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From third world to first- Lee Kuan Yew

July 14, 2010

Singapore’s Godfather Makes His Case

FROM THIRD WORLD TO FIRST
The Singapore Story: 1965-2000

By Lee Kuan Yew
HarperCollins — 729pp — $35

Two kinds of images have stayed with me from the years I spent in Southeast Asia back in the late 1960s. One is of vibrant, fecund, rambunctious villages and cities, with mounds of peppers in the markets, loud pigs in backyards, spicy foods, sewage smells, and crowded, busy streets. The other image is of a little girl, deathly sick in my arms, in a dank hovel in a Manila slum. Her mother had sold her medicine so that her sisters and brothers could get food and clothes to go to the school I taught in as a Peace Corps volunteer.

I had these dueling images in my head when I arrived in Singapore at the end of my Asian stay. I was struck by how sterile it appeared compared with Malay and Thai societies. There was order, public cleanliness, and a touch of fear in the air. I hated it. A puritanical, authoritarian state had replaced the rich Southeast Asian tapestry. But something else was also absent–abject poverty. There were no starving children. So I gave Singapore a ”pass,” the kind of ends-justifies-the-means rationalization for which Lee Kuan Yew, founder and father of Singapore, makes a strong case in his fascinating memoir, From Third World To First.

Lee is perhaps the greatest Asian strategic thinker of the modern era. He understands the ballet of big-power relations, the rise and fall of nations over time, and, most important, the role of the U.S. in stabilizing the global scene, especially in Asia. In such matters, only Henry Kissinger rivals Lee, who has participated in virtually every major Asian event of the past 40 years, mediating, triangulating, teaching.

There are a number of revealing surprises. During the Asian financial crisis of 1997, Lee met with Indonesian President Suharto’s oldest daughter, Siti Hardiyanti Rukmana (Tutut), and urged her and her siblings to abandon their huge business privileges. Lee knew international fund managers wanted them out. Tutut said she would not be able to get her brothers and sisters to change their ways. The rupiah collapsed, and with it the Suharto government.

Lee served as a mediator between China and Taiwan, and China and the U.S., over the years. He encouraged the U.S. to get China into the World Trade Organization, Taiwan to reduce its independence rhetoric, and China to be patient about reunifying with Taiwan.

Lee has always been ambivalent toward America, recognizing its power but being critical of its mores. This volume shows that Lee’s mixed feelings may have personal roots. In 1965, following years of anti-Chinese race riots, Malaysia decided to expel Singapore. At this time, Lee’s wife became seriously ill. The top specialist for the disease was an American doctor then in Switzerland. Lee asked the U.S. government for help in persuading the specialist to come to Singapore. ”They were unhelpful,” he writes. ”Either they could not or would not help.” Lee became so angry that he gave a TV interview in which he embarrassed Washington by disclosing that the CIA had tried to spy in Singapore.

Of course, Lee’s most pointed critique of America concerns values. Time and again, he has argued that Asia has certain group ideals that suit it better than American individualism would. But the book reveals that Lee is very selective in his choice of Asian values, clearly favoring the values of the educated Confucian class of which he is a member (his father was a doctor). In the city-state’s formative years, he expressed pure contempt for the traditional rural, farming values of most of its people (values they shared with 80% of Asia’s population at the time).

Lee’s noblesse oblige authoritarianism and distrust of popular democracy may very well reflect his British upper-class education as much as his Asian background. Certainly corporal punishment and caning in particular, while common in the British upper-class private schools are hardly ”Asian” practices. Lee says in the book that the British practiced both whipping and caning before the war in Singapore and his new government adopted the caning.

British elitism also appeared to extend to issues of race and culture with Lee. When he was at Harvard in 1968, learning about American society, Lee was struck by the fact that ”no scholar was prepared to say or admit that there were any inherent differences between races or cultures or religions. They held that human beings were equal and a society only needed correct economic policies or institutions for government to succeed.” Such assertions were naive, according to Lee.

Lee doesn’t trust the market, either. In the book, he says that a market economy quickly devolves into a winner-take-all society because of peoples’ unequal abilities. That, in turn, leads to social tensions and political instability. So Lee concludes that the nanny state, run by an elite, is the proper Asian model. Never mind that Korea, Taiwan, and Japan have evolved from authoritarian states to democracies.

At 77, Lee stands as one of Asia’s great modern leaders, in part because of his intolerance of hypocrisy. Americans, he writes, ”want to promote democracy and human rights everywhere, except where it would hurt themselves, as in the oil-rich Arabian peninsula.” Ouch.
Yet it is every bit as hypocritical to defend state authoritarianism in a prosperous, highly educated, and secure Singapore. Lee’s powerful memoir reveals a great deal–perhaps even more than the author intended.

An island city state in south East Asia could not be ordinary if it was to survive. We had to make extraordinary efforts to become a tightly knit, rugged, and adaptable people who could do things better and cheaper than our neighbors

Assistance should provide Singapore with jobs through industries and not make us dependent on perpetual injections of aid. … the world doesnot owe us a living, we cannot libe by the begging bowl… to do so would undermine confidence, and whatever aid we might get could never make up for the loss of confidence..

He dispelled my previous belief that industries changed gradually and seldom moved from an advanced country to a less-developed one. Reliable and cheap air and sea transpoert made it possible to moce industries into new countries , provided their people were disciplined and trained to work the machines and there was a stable and efficient government to facilitate the process for foreign entrepreneurs

American weighed business risks. They looked for political, economic, and financial stability and sound labor relations to make sure that there would be no disruption in production that supplied their customers and subsidiaries around the world

When the Taiwanese and HongKong entrepreneurs came in the 1960s, they brought low technology such as textile and toy manufacturing, labor- intensive but not large-scale. American brought higher technology in large scale operations, creating many jobs..they believed that their gov was going to stay in SE and their business were safe from confiscation or war loss

Link up with the developed world- America, Europe, and japan- and attract their manufacturers to produce in Singapore and export their products to the developed countries

Constantly upgraded their technology and products. This reduced their unit labor costs, enabling them to pay higher wages without losing competitiveness

I assured them publicly that Singapore would share any cuts they imposed on the rest of their customers on the principle of equal misery….increased international confidence in the Singapore gov

Asked the Japanese to set ip centers with their own instructors to train technicians

Triple pay on public holidays had led to cleansing workers deliberately allowing garbage to accumulate befire public holidays to ensure that they would have to work on these holidays. The purposre of public holidays was to give the workers leisure, but our workers wanted more pay, not more leisure…we need new attitudes, the most important of which was that pay must accord with performance, not time spent on the job

I convinced them that industrial relations between employers and workers were more important for out survival than wage increases and that together we had to het the labor movement into better shape by cutting out restrictive practices and the abuse of fringe benefits

I urged our employers to do their part so that our woekers would put in their maximum effort to get maximum rewards: direct rewards in their wages and benfits and indirect returns throufh gov revenue by wat of homes, health, education, and social benefits

Corruption became worse when china embarked on its open door policy in 1978. Many communist activists who felt they had been deceived and had wasted the best years of their lives set out to make up for lost time and enrich themselves in every way they could

But Singapore will remain clean and honest only if honest and able men aare willing to fight elections and assume office.they must be paid a wage commensurate with what men of their ability and integrity are earning for managing a big corporation or a successful legal or other professional practice

If we underpay men of quality as ministers, we cannot expect them to stay long in office earning a fraction of what they could outside. With high economic growth and higher earnings in the private sector, ministers’ salaries have to match their counterparts’ in the private sector

People wore the same style Mao Jacker and trousers, ostensibly of the same material with the same ill-fitting cut… while they might liik alike, they were of different quality cloth

I knew when a country and its administrators were dmoralized from the way the buildings had been negnected- washbasins cracked, taps leaking, water closets not functioning properly, a general dilapidation , and , evitably , unkempt gardens. VIPs would judge Singapore the same way

All factories had to landscape their grounds and plant trees before they could commence operations

Following Japanese practice, Park Chung Hwa  jealously protected his domestic market and exprted aggressively. He encouraged, even forced Koreans to save , denying them luxuries like color television sets which they ertr exporting in increasing numbers

If China wanted normal diplomatic relations with the countries of south east asia that had Chinese populations, they had to give up their principles of sanguinis ( the law of the blood) , that any person descended from a Chinese father was automatically a Chinese national

We would not allow the Soviet Union to engage in any anti- china activity , but as a free economy we had allowed Soviets to open a branch of their Moscow bank to conduct trade relations

My experience of developments in asia has led me to conclude that we need good people to have good gov. however good the system of gov, bad leadrs will bring harm to their people.

Leadership is more than just ability. It is a combination of courage determination, commitment, character, and ability that makes people willing to follow a leader

JAPAN
to appogize is to admit having done a wrong. to express regrest or remorse merely express their present feeling

after living in JP for decades, Chines Singaporean bankers and business pp rarelyh develop deepfriedhsips with their JP associates, in spite of speaking fluent JP and coforming to JP socialnorms. they meet over dinner andat social gatherings its public places alnostnever  in their homes
the JP do not give busienss to foreign banks. Singaporebanks inJP depend entirely on SIngaporean and other foreigners. whenbig JP firm investinSIng, they bring their supporting comapnies to cater to their needs, including JP supermarkets, restaurants,and other supplies of theirway of life

having earned their newly foundwealth the hard way,they are loath to part with it to spendthrift 3rdworld regimes, to benefit not the pp but a fewleaders. Singaporeans have also comeup the hard way, so i understand JP sentiments. wehave always preferred to give aid in the form of training and technical assistance, not in grants which could be misused

MITI’s advice to our officials in 1980s was, given Singapore’s geographic positionandenvironment, to prepare for a possiblerrole as a center for knowledge and info , to complement TOkyo. They believe that for such a center to succeed, the pp had to be reliable and trustworthy

becasue supplementary benefits were high, a company facedwith a recession could immediately trim bonuses and allowances to save as much as 40 to 50 % of their wage bill and restore tham later whan company profits recovered. This made life-long employemnet possible. their comapnies provided medicaland dental care, housing, including hotels for bachelors and housing loans at highly subsidized rates, family recreational facilities, education foremployee’s children , farewell and welcoming parties, long-service gifts , stock options, congratulatory and condolence allowances. the ties that boundthem to their company were many and strong. But only the big companies andthe public sector could affordthis life-longemployment system. they were able to pass on the burden of retrenchments in a downturn to their suppliers, the smaller companies.  i wanted to emulate them but gave up after discussion with SIngpore’s employers beucase we did not have their cuture of strongworker loyalty to their companies. moreover,many of our big employers were US and EU MNCs with diff company cultures

i have tried to identify those JP strong points which we could adopt becasye theywerre system or method- absed. since i have had many meetings with JP engineers, CEOs , ministers, formidable beaucrats, i have come to believe reports of some western psychologists that their avg IQ, especially in math, is higher than that of US and EU. in spite of my experiences during the JP occupationand the JP traits, i had learnedtofear, nnow I rspect andadmire them. their group solidarity, disciptline, intelligence, industriousness, conservative in natural resource willingness to sacrifice for their nationmake them a formidable and productive force

as the economy has globalized, JP has been forced to open up its domestic market. many time-honored practices, like life-time employment, will have to change. while they may not have encouraged as many entrepreneurs in new start-ups as American have done, their yhoung men and women do not lack imgination, creativity, they willl fight back

KOREA
Oct 1979, i met President Park Chung Hee. he had no small talk at dinner that night. the Korean intellgentsia, like the Taiwanese, were as much influeced by th e JP as i was by the British. educated in JP , until now they stil read Jp novels andnewspapers. following JP, He jealously protected his domestic amrket and exported agressively. he encouraged, even forced Koreans to save, denying them luxuries like color tv sets which they were exporting in increasing numbers. i was impressed by his strong will and grim resolve for Lorea o suceed. 5 days after i left, he was assasinated by his closest aide, the chief of itelligence. according to the gov, it was part of a plot to seize power. their press reoirted that the intelliegence chief had feared being replaced after Park criticized him for his failure in handling unrest when sudents and workers fought police in Pusan

Koreans were tough and capable of enduring great hardships. they were proud of their history, but their hatred for the JP was intense. 35 years of merciless JP supression of any rebellious activity had left deep scars on their soul. they remembered the Jp invasions over the last 500 years, each of which they repelled. even among the most Jpnized of the Lorean elite, including Prime minister Choi and his wife, both completely at home in Japanese  anguage, literature, and culture, there was an underlying antipathy toward their former  rulers. The Japanese were hard on the Koreans because they resisted colonization and domination. They had also resisted Chinese overlordship for a thousand years, but they did
not have that same deep antipathy for the Chinese. They had adopted the Chinese script and with it had imbibed the teachings of Confucius. orean students in American universities have shown that they are as bright as the Japanese or Chinese. But although physically Koreans are hardier. they cannot equal the Japanese in cohesiveness and dedication to
thei r companies. Korean workers and unions were quiescent as long as there was martial law. When it was lifted, the unions became militant with go-slows, sit-ins, and strikes. They demanded more pay and better conditions regardless of what was happening to their  export markets.

Korean employers and unions never achieved the cooperative relationship that Japanese companies and their unions enjoy. Japanese unions never damaged their companies’ competitive position however sharp their disputes ‘with their employers over who got what.

The Koreans are a fearsome people. When they riot, they are as organized and nearly as disciplined as the riot police who confront them, policemen who resemble gladiators in their helmets with plastic visors and plastic shields. When their workers and students fight in the streets with these policemen, they look like soldiers at war. Their strikers squat on the ground to listen to speeches and pump fists into the air rhythmically. They are an intense people not given to compromise, and when they oppose authority, they do so with vigor and violence.

HONGKONG
with little or no social safetynet, it spurred HK to strive to suceed. In HK when pp fail, they blame themselves or their bad luck, pick themselves up and try again, hoping theit luck will change
Singpore hprefer job security and freedom from worry. whenthey do not suceed, they blame the gov since they assume its duty is to ensure that their lives get better. they expect the gov not only to arrance a level playing field, but at the end of the race, to give prizes even to those who have not done so well

A Hongkong entrpreneur established textile and garment factories in Sing in early 1970s, he brought his Hongkong managers and hired several more sing.the SIng managers were still working for him in 1994, while his HongKong managers had set up their own businessesand were competing agaist him. they saw no reason why they should be working for him whenthey knewthe trade as well as he did. all they needed was a little capital,and the moment they had that, off they waent. SIng lacks that entrepreneur drive, the willingness to take risk and be a tycoon

HK ‘s British rulers had governed in the old imperial tradition, haughty, aloof, condescending tothe localsand even to me, because i was chines. the earlier govonors were promoted fromthe ranks of the British colonial service. this changed after 1971,Murray McLehose was from the British foreign service, a superiorservice. he decided to visit Sing to get advice for corruption, polytechnics, publichousing

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