連接上兩篇分別講解新加坡之「房屋與公積金的發展」及「人口變動和相關的政府政策」,祖兄在本篇繼續分析新加坡政府之「經濟發展模式」,詳情如下。

The Government’s Visible Hands in the Development of Singapore Economy
Extensive and active government intervention has played a critical role in the development of “Singapore’s economic model”to drive the strategic direction and structural transformation of the economy for strong gross domestic product (GDP) growth and high national saving. The state-driven economic development model with a strong one party rule in Singapore has delivered consistent economic policies and high growth rates in the past decades and it has been credited for the success of Singapore economy until Year 2000. The Singapore story has been viewed as a rare success case of centralised economic planning by the state. One contributing factor is the strong one-party rule with political/social policy stability over the past decades as few parliamentary seats has been taken up by the opposition party. This enabled the government to pass any laws and regulations which could be un-popular among the locals but viewed as essential by the government to secure the country’s long term interest.

Since the days of Lee Kuan Yew, Singapore always maintains the foreign policy to develop good relations with as many countries as possible to ensure an inflow of technology, capital and management skills to the country. Besides being a member of most multilateral free trade agreements in recent years, the country has also signed double taxation treaties with more than 50 countries to mitigate the double taxation burden to the multi-national companies (MNCs) which are doing business in Singapore and a low tax regime has been implemented till now.

The Singapore government’s intervention in the economy was very successful in attracting foreign direct investments (FDI) in the 1960s. With the strategic objective of transforming Singapore from a trading hub after the Second World War into a manufacturing base for the foreign MNCs from US, Europe and Japan to create jobs for the locals, the government made strategic investments in its infrastructure and also provided tax and other incentives to attract large foreign companies to use Singapore as their preferred regional production, servicing and distribution centre.

One successful example was the establishment of petrochemicals and energy industry on the man-made “Jurong Island”(裕廊島;位處新加坡西南部外海的人工島) which is specially focused on the petrochemicals and oil refinery industry’s requirements to create business synergies for the investors and to make Singapore a global chemicals hub. With a huge investment in its physical infrastructure by the Singapore government and close collaboration between the government and industry players during the project planning and execution stage, more than 100 international companies have since located there and this business sector had contributed 35% (approx. S$100 billion) of the total manufacturing output of Singapore in 2011.

The Singapore government has continued its investment to make the strategic industries remaining progressive and it is promoting industry-wide partnership for shared use of capital intensive infrastructures in order to increase business productivity despite the rising cost of doing business. With 25% of the company’s global chemicals manufacturing capacity located in Singapore, Rex Tillerson (美國國務卿提勒森), chairman of ExxonMobil (埃克森美孚集團) at that time (who is now the US Secretary of State in Donald Trump’s Administration) praised the Singapore government for its stable policy course that encouraged international investment, teamwork and advanced technologies.

Singapore government has also strongly intervened in those industries which are viewed as strategically important but the local private sector would not have the capability or capital to develop. Initially Statutory Boards and Government Linked Companies (GLCs) were set up to lead the development in strategic segments of the economy: banking, telecommunications, industrial parks, port, airport, shipbuilding, defense technology, computer/information technology, and air/sea transportation. As the ultimate shareholder with significant or controlling minority ownership shareholding in these GLCs, Singapore government can appoint the CEO and other top executives to operate such companies on a commercial basis, closely follow the government’s direction to develop such industries, and realise the government’s long term vision for the economy. The business activities of GLCs have been expanded to cover many other business segments such as convenience store, supermarket, and taxi services with significant market share in most sectors.

As of today the manufacturing export industry of Singapore still mainly consists of foreign owned MNCs with the supporting industry infrastructure being provided by local enterprises. The survival of such local firms would be a question mark if the MNCs move their factories in Singapore to other countries with lower labour and land cost in future. Coupled with the GLC’s dominance in almost every major industry and market segment, the local Small and Medium Sized (SME) firms can find it difficult to grow and become globally competitive firms with the rising cost of doing business in the domestic market and limited access to the markets in neighboring countries (unlike Hong Kong (HKG) with the China market behind her). It is also difficult for the local firms to attract young local talents who are more willing to work for MNCs, GLCs and government agencies. As a result there is a lack of locally owned manufacturing ecosystem and locally owned patents/capacity for innovation to provide long term sustainable economic growth.

Recently the Singapore government has set up certain task force to promote the growth of local SMEs, boost the innovation mindset among locals, and look for deeper integration of the domestic market with neighbouring markets (but with only limited success so far). In comparison, the SME segment in HKG is much more vibrant in the absence of strong government intervention in its economy. Even though the manufacturing industry has largely migrated from HKG to the Pearl River Delta region, it is still serviced by the HKG based sales and business services operation.

By the late 1990s, Singapore government was of the view that the FDI driven growth model would end soon as the comparative advantage of Singapore had diminished over time with the rising cost of doing business in the country and the neighbouring countries are catching up rapidly to provide efficient infrastructure at a lower price. The huge injection of China capital and technology into Malaysia under the One-Belt One-Road Initiative to upgrade its infrastructures and the planned construction of the greatest sea port in South East Asia would pose a threat to Singapore’s status as a regional hub in future.

To meet future challenge, the Singapore government has identified the certain local industries to drive further economic growth are: global banking, bioscience, healthcare, lifestyle, arts and design, and wealth management. The government has invested heavily in the related infrastructure to improve the business environment for innovation activities, co-investment and other incentives / subsidies are offered to pharmaceutical companies who build their manufacturing plant and / or research and development centre in Singapore. The government’s idea was that Singapore should be turned into a leading global city and increased its cosmopolitan appeal (in order to get rid of its boring image to the foreigners) to attract foreign creative talents from aboard to live in Singapore. A pool of creative talents would then be formed which could in turn attract companies engaged in innovation work to set up their operation or headquarters in Singapore.

Under this foreign talent driven growth strategy, the immigration and foreign worker policy was relaxed in the early 2000s to let in more foreign workers. The size of non-resident workforce had been doubled by 2014 whereas the resident workforce only grew 26%. The country’s landscape has also been “beautified” by iconic projects such as Gardens by the Bay, Esplanade, integrated resorts with casinos in Sentosa (聖淘沙) and Marina Bay (濱海灣) areas, and the holding of Formula One night racing and international music / art festivals so that foreign talents can enjoy similar lifestyles as if they are in New York or London. However, the great inflow of foreign workers and immigrants had created strains to the housing, transportation and local’s employment opportunity besides widening the income inequality gap within its residents.

Labour disputes and industrial strikes were common in Singapore during the 1950s and 1960s. Lee Kuna Yew had acted as the legal advisor of certain labour movement parties in the early stage of his political career to fight against business enterprises and colonial government. However, new industrial relations laws were passed in 1968 after the country’s independence which enabled the government to control the whole country’s workforce to reduce labour unrest and indirectly lowered the labour cost to the MNCs and business owners. The National Tarde Union Congress was formed to become the only official labour union recognised in Singapore and its leaders are appointed by the government. The National Wages Council was established to issue annual guidelines and set wages for the economy at national level.

During the recession in mid-1980s, the government-controlled labour unions supported the government’s proposal to cut wages in order to help the economy to regain competitiveness. In recent years a floating wage automatic adjustment mechanism has also been introduced for the workers of local enterprises and GLCs under which a certain percentage of the employee’s monthly salary is treated as a variable component. The variable component amount of the employees can increase or decrease according to a pre-agreed formula which is linked to the national economy and company’s performance during the period under review. The government argued that under this mechanism more employees can keep their jobs albeit at a lower wage level during a cyclical recession instead of outright retrenchment.

Singapore government has a strong civil service and statutory boards system which are based on meritocratic management and low corruption to implement its policies. Some ministers had been charged in court for corrupt practices in the earlier years to deter others. The wages for civil servants are made comparable to private sector wages, help the government to retain talents and reduce their corruption incentive. Besides basic salary, they are also entitled to performance merit payment and bonus which is linked to the country’s GDP growth rate. The pay of Singapore prime minister, ministers and other political appointments are the highest in the world. The government has argued that the high remuneration package is required to attract the elites to join the civil service workforce.

Statutory boards are public sector organisations which are given great autonomy to carry out their tasks in an efficient and less bureaucratic way in order to achieve high economic growth. One outstanding example is the Economic Development Board (EDB) which is responsible to attract MNCs and provide them with a one stop service to invest and operate in Singapore. They would also assist the foreign investors to negotiate with other government departments for tax, financial and other incentives. EDB can also enter into joint ventures with foreign investors in certain industries which are considered as critical to the future economic development of Singapore.

Like HKG, Singapore is in lack of natural resources and land, the availability of human talents is critical for the country’s economic growth and business enterprises’ survival in the global economy. Besides meeting the academic secondary and tertiary educational needs, Singapore government has invested a lot of resources for vocational and skills upgrade training in response to the changing skills that are in demand by the MNCs and enable Singaporeans to acquire high skills to seize opportunities in the new economy. The Ministry of Education has also revised the school curriculum recently to enhance the creativity and critical thinking capability of Singapore students to meet the changing work skills requirement as the government is of the view that such capability is critical for securing a job in the new digital age.

Like some Western countries, the central and provincial governments of China sent thousands of officials and academics to study the economic development model of Singapore over the past years. The general consensus is that its economic model cannot be transplanted elsewhere due to the following factors:

(1) Political stability with strong one party rule even though its general election process is in line with the Western practice;

(2) Good governance with an efficient and almost corruption free civil service;

(3) The government can attract and retain the country’s talents and elites in its civil service; and

(4) Singapore is a small country with a single tier public service administration system (unlike China with its provincial and city administration systems which can make it difficult for the central government to enforce the central policies and regulations), it is much easier for the prime minister to evaluate the capability and performance of his ministers / top civil servants and monitor their compliance with the government’s objectives and policies.

Issues Arising from the Government’s Intervention in Economy and Remedies
Singapore government has acknowledged that the weakness and flaws of Singapore’s economic development model began to surface in recent years as its past policies were mainly focused on GDP growth rate. Under the meritocracy and pragmatism management system of the government, the quality of life and adequate funding for the retirement and healthcare of its citizens were not the major concern of the government in the early years of its economic planning. Singapore’s share of wages in its GDP is much lower than the developed countries and a great portion of the GDP is repatriated as the company’s profit by the MNCs to their home countries as they are the main engines of growth in the past decades, therefore the benefit to an average Singaporean can be much less than the apparent GDP growth while the expectation of its citizens has grown over the years.

The income of local elites and senior expatriate staff has risen rapidly but the wage increase of lower income workers is much lower with the influx of foreign workers (who can be professionals or catering service/construction workers/cleaners). The linking of the remuneration for the senior civil servants to the GDP growth rate and the CEOs’ pay in the private sectors of Singapore had also become a thorny issue to many Singaporeans. The unemployment rate of local professionals and managers started to rise when mid-age workers are retrenched due to technological change or when that industry is in its decline path. Like other developed countries, the dissatisfaction of the more educated younger generation is more pronounced than the older generation.

The discontent of many locals was reflected in the 2011 General Election results which caused the government to renew its approach in managing the economy. Anticipating that high GDP growth rates are no longer sustainable and the improvement in living standard may have reached a plateau, the government has recognised the need to provide greater social security to the lower income group and to address potential issues arising from the widening income gap between the rich / elites and lower income groups.

As a measure for the government to collect the views of its people on major issues which are of concern (instead of just relying on the input from the elites as in the past), the one year “Our Singapore Conversation” campaign was launched by the government in 2012 for the public, youth and trade associations, professional bodies, university lectures / students, overseas Singaporeans and government departments to attend discussion sessions (conducted via traditional forums and online platforms) and voiced out what they want Singapore to become in 10 years’ time. The government focused its attention on education, healthcare, population, transport and housing issues after the consultation period was over.

To address the people’s concern over the high pay of top civil servants, after conducting a salary review the annual pay of prime minister was lowered from S$3.1 million to S$2.2million from 2012 onward and the junior ministers’ pay was lowered to S$1.1 million. The president’s pay was also reduced by 51% to S$1.5 million and the annual allowance given to the parliament members was reduced to around S$200,000. As of today the annual remuneration of a US president is still just 25% of the Singapore prime minister’s pay.

In 2014, the medical benefits provided to the residents under the Central Provident Fund (CPF) medical insurance scheme has been improved and it has become a life-long insurance cover scheme without medical pre-condition exclusion clause.

To address the local transport congestion issue, the government has launched the Mass Rapid Transit (MRT) system upgrade programme to expand the MRT system coverage and is exerting pressure on the operating companies to improve their service standards. After studying the UK and Australia bus operating models, the public bus service in Singapore was “nationalised” in 2016 by the government with the objective to improve its service standard at reasonable bus fares. The government now owns all the buses and associated infrastructure, the bus routes have been re-grouped into 12 bundles and outsourced to third party operators. The existing bus service providers can run 9 bundles with the remaining 3 bundles to be run by foreign / local operators after tendering. The bus service revenue goes to the government and the operators would receive management fee in return.

A national Future Economy Council has been formed in May 2017 with the objective of growing an economy that is vibrant and connected to the world, strengthen local enterprises through industry-specific transformation to help them grow, innovate and scale up.

Summary
The Singapore government has managed to combine political stability with market efficiency to produce the desired outcome for the country for the past 50+ years. As the Singapore economy enters a new development phase under the forces of globalisation and rapid technological change, the government would need to be more competent and efficient in utilising the country’s resources to broaden its economy with sustainable long term growth.

【後記:
Carrie Lam would try to boost the HKG economy in the coming years by using the hands of the government similar to what SNG government had done for 50 years. The main issue is how to attract the elites in HKG to join the civil service under the current political environment. An elite working in MNC or the private sector in Singapore with outstanding achievement can be invited by the prime minister to become a minister and receive a pay which is not lower than his previous job in the private sector. When the government is actively involved in the planning and operation of commercial activities to set mid or long term objectives and boost economic growth, the ministers must be very capable and corrupt free; otherwise, it would lead to the misallocation of the country’s resources and catastrophic results.
2017年8月4日。】

這篇文章發表 於 星期五, 八月 4th, 2017 9:55 上午 在 邁向現代 Road to Modernity. 你可以回應這篇文章透過 RSS 2.0 feed. 你可以 留下回覆, 或 引用 從你的個人網站.

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