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Singapore a Nation in Transition

The shining economic miracle of Asia. This is probably the first thing that comes to mind when one thinks about modern Singapore. Separated from Malaysia in 1965, the tiny city state had no natural resources to call its own and grappled with socio-economic underdevelopment and corruption. While many point to Lee Kuan Yew, the country’s first Prime Minister, as the chief architect of the “Singapore Miracle,” every Singaporean who contributes to the country’s 323.91 billion USD Gross Domestic Product helps keep it a reality.

The following is an excerpt from an essay by Rachel Loh of the Harvard Kennedy School of Government, who joined the Asia Leadership Trek in 2014. Visiting Hong Kong, Kuala Lumpur, Shanghai, and Seoul, Loh couldn’t help but note Singaporean culture’s robust stress on hard work, personal responsibility, and discipline. This is a nation where slacking off is not an option. Read on and discover new insights into how national values translate to public policy and individual behavior. The complete chapter is in Rethinking Asia 1: Education and Innovation.

Keeping Busy:

Industriousness and Individual Responsibility

On our second day in Singapore, we visited the Lee Kuan Yew School of Public Policy to attend a lecture and speak with a few academics. Arriving at the garden-like campus of the school, which is under the National University of Singapore (NUS), my thoughts hearken back to an earlier period; I walked through the corridors of the school’s colonial-era buildings and thought back to my own early days in Singapore, when I attended NUS. My economics professor at that time shared a story with the class to illustrate the industriousness and personal responsibility of the Singaporean people. He poignantly described how his seventy-year-old father was continuing to work each day at McDonald’s. Despite the best efforts of his son, who urged him to “just retire,” his father wanted to keep busy.

The meritocratic society of Singapore values self-reliance and individual responsibility, and it frowns on idleness. It is perhaps unsurprising that there is a big emphasis on individual responsibility when it comes to social policies in Singapore. My taxi-ride conversations often revolved around these unique policies—from the pension scheme to healthcare and education policies, all vital cogs in building a self-reliant population. Sometimes the drivers were critical, but underlying nearly everyone’s comments is the basic understanding that hard work brings good results.

These values are represented in the government’s antipathy towards certain public welfare spending initiatives. Instead of a national pension, each working person in Singapore contributes a portion of his or her salary towards a personal account in the Central Provident Fund. In addition to buying an annuity after retirement, funds in this account can be used to pay for housing, education, and medical expenses. As a result of this forced saving, home ownership rates in Singapore are well over 80 percent (comprising mostly government housing), and government expenditure on healthcare as a percentage of total healthcare costs is one of the lowest in the developed world, even while the quality of care is one of the highest. Singapore’s universal healthcare system is based on a hybrid model, with government subsidies, compulsory savings, and price controls within the public health system. To ensure against the over-utilization of healthcare services, no public medical service is provided for free, regardless of the level of subsidy, even within the public healthcare system.

One of the few areas in which the government has deviated from its philosophy of public welfare spending is education. After defense, education commands the highest share of government spending, as education is seen as the most effective way to promote social mobility.

Many of the Trekkers were surprised to learn how much the government spends on education in Singapore. When we visited the Singapore School of Science and Technology, we learned that the government spends about 20 percent of the annual national budget on education funding. Singaporean children have access to affordable and high-quality public schools up to at least the secondary level. Tertiary education, some form of which is available to those who want it, is also subsidized.

Besides education, public services are for the most part operated strictly according to market principles, although the government does provide targeted and means-tested subsidies for housing and healthcare. The public is expected to pay fair market prices for services consumed—from utilities to public transport. Direct social transfers are available on a limited basis, but they are heavily means tested.

By Rachel Loh