In the midst of an ongoing global economic crisis, I have sought through research to identify possible approaches to our governance, economic and social management for the future. I recently read with great interest an interview with Singapore’s Minister of Finance, in a Credit Suisse journal entitled Singapore’s Economic Miracle, and immediately asked what is Singapore able to do socially and economically, that Barbados and other Western nation apparently find themselves
unable to achieve.
I have used key aspects of this interview to make comparisons between two service-based economies with more similarities than economic and social indicators may suggest.
Cornerstones of Success.
Singapore highlights the following critical success factors in achieving its current performance:
1. Culture –– a multireligious and multicultural nation united in a search to make the most of what they had and leading to a work-based society and culture with a strong work ethic leading to a social DNA that yields superior productivity.
2. National response to adverse external conditions –– with very limited options in a very competitive world the country sought to determine how it could make itself more relevant to the world.
3. Government policies with specific emphasis on housing and education –– create policies that encourage local employment and export of goods and services, which in turn leads to attracting international companies and their investments.
Can Barbados seek success on a similar path? I say yes! As a services-based economy, we, through all of our structures, must create a culture of productivity and service. It however has to be the collective responsibility of all citizens to be successful. Our national response to the current crisis has been naturally more outward looking with efforts to stimulate demand from other markets.
Singapore’s approach of seeking to add value to other nations would be a useful tool for us to adopt as it will guide decisions on national development. Are we still able to add value through tourism, sugar, international business? How can we add more value through innovation and improved work ethic? Fiscal and economic policies are necessary, but cannot be the only plank we stand on.
Despite current decisions, like Singapore, our policies seek to attract foreign investment; however, on many occasions, it is at the expense of local communities. As a country we need to focus on growing our local entities and equip them for export our GDP is declining, while Singapore has an increasing GDP has it seeks to compete with major countries like Switzerland operating in the same sectors as their country. This focus on local business would ensure access to finance, marketing and other critical resources that aid development.
1. Education –– Singapore created a national focus on its people and by extension the development and continuous upgrading of their skills to better equip local and international businesses. The Government declares that its educational system is one of the foundations on which Singapore was built and that most successful countries understand the crucial role for education as a force for transformation. His advice is that it cannot simply be about graduating as many people as we can with academic skills, despite the challenges of creating the resulting benefits to be had from educational systems.
2. Security justice and stability –– the country ensured that the rule of law was strong, yet fair transparent and predictable in all aspects. Stability of the political system was also critical in providing certainty. International investors crave security and predictability in determining where to place
3. Taxation –– create measures and implement policies that facilitate low tax regimes, in an environment that frowns upon fiscal imbalance. Our nation is currently in the midst of a debate on the financing of tertiary education and there is no denying it has been one of our key pillars; however the Singapore experience clearly shows how inability to manage government expenditure and fiscal imbalance will always restrict your ability to maintain such initiatives. The focus of our education system must shift from quantity of education to usefulness and quality of education in providing individual opportunities but in areas that will also satisfy national economic goals.
Barbados already boasts a very safe and stable society, however, our justice system currently does not offer the certainty and predictability that it should and remains a work in progress. On the other hand, our country is now heavily taxed and many agree overtaxed. High taxation is a deterrent to business development and economic expansion. The Singapore model illustrates an attitude of welcoming competition and a refusal to use taxation as a tool to fund over spending by governments as high tax rates restrict growth.
Other Important Lessons.
The economic management of Singapore’s economy does not thrive on political relationships and the resulting fiscal mismanagement that can occur. In identifying the core values of its model of management, the Minister of Finance stated in the interview that citizens taking personal responsibility for helping themselves and demonstrating a collective willingness to help the less fortunate were the main features of the value system employed. Work ethic and productivity are maintained by providing Government support in return for self-reliance.
The state of our economy and prospects for development are more tied to our willingness to adopt a different approach to how we see economic and social management in a developing nation. The Singapore view of the predicaments Western governments’ have found themselves in is actually quite profound and I quote from the interview.
Politicians promised their people social benefits that were simply unsustainable. With each electoral campaign they added new promises, leaving the bill for subsequent generations. It has unfortunately had not just financial consequences, which are now obvious, but has also changed social values and norms. The culture of entitlement is now widespread and will take time to reverse. It’s tragic particularly for the next generation. That’s why Europe is in search of new social models.
Have we as a country reached for the reverse yet? The clock is ticking and history will write of our response to the adverse conditions that confront us. It is our poor fiscal management that has taken away 100 per cent free education at university and further threatens health care and many other social amenities and benefits we have become accustomed to. While our countries have clear differences the similarities
lie in what we both seek to achieve through service based economies.
Like Singapore, we require a sound national policy and, where relevant, legislation or even constitutional amendments to address fiscal management, immigration, education, poverty eradication through upliftment and opportunity. We can no longer depend on fiscal policies only. Our standard of living and the access to social services that we have grown accustomed to are under threat.
I look forward to Barbados, through better leadership and commitment, being able to raise its hand in the next decade to say we lived and governed by similar ideals, but attained using approaches best suited to our peculiar circumstances. This is well within our reach as a nation.