From Third World to First The Singapore Story pdfdrive com

New York Times
, American
author Bob Shacochis asked, “What went wrong? Setting aside for the moment
the culpability of the Haitian leadership, Washington’s policymakers might
acknowledge that 
in vitro
democratisation is a risky procedure. Haitian
democracy, born prematurely, will not survive without a genuine multiparty
system, which won’t exist without a secure middle class, which can’t evolve
without a viable economy, which won’t exist without credible leadership strong

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and wise enough to wrench the country out of its tailspin.” Because the
American administration did not publicly acknowledge this failure and its
reasons, this will not be the last time it makes this mistake.
At our discussion in March 1992, I had emphasised to Schmidt that it was
different with human rights; technology had brought the peoples of the world
into a global village, all watching the same atrocities on television as they
happened. Because all peoples and governments want the respect and esteem of
others, they must gradually move away from behaviour that made them
disreputable. The next time Schmidt was in China, I noted that he pressed for
universal standards of human rights, not of democracy. Later, Schmidt wrote in
his newspaper 
Die Zeit
that China could not become an instant democracy, but
that the West should press for its human rights to become acceptable.
The interest of America, the West and even Japan in democracy and human
rights for Asia springs from their concern over the outcome in China, not in
Taiwan, South Korea, Hong Kong or Singapore. America wanted these East
Asian “tigers” to be examples to China of free societies that had prosperous
economies because of democratic political institutions. The 
New York Times
, in
the article Huntington quoted in 1995, had pointed out that Taiwan and
Singapore were the two most successful Chinese societies in 5,000 years of
Chinese civilisation, and that one or the other was likely to be the model for the
future of mainland China. This is not the case. China will chart its own way
forward. It will select and incorporate those features and methods of government
that it finds valuable and compatible with its own vision of its future. The
Chinese people have a deep and abiding fear of 
luan
(chaos). Because of their
country’s immense size, their leaders are extra-cautious, and will carefully test,
adjust and adapt before incorporating new features into their system.
The fight between the United States and China over human rights and
democracy focused on Hong Kong’s return from Britain to China. The United
States has economic leverage on China through Hong Kong. If it is not satisfied
that Hong Kong is administered separately from China, it can cut off the separate
export quotas and other benefits to Hong Kong. The fate of six million Hong
Kongers will not affect America or the world. But the destiny of 1,200 million
Chinese in China (likely to become 1,500 million by the year 2030) will
determine the balance of forces in the world. Americans have joined issue with
China over Hong Kong’s “democracy” more to influence the future of China
than that of Hong Kong. Similarly, American liberals criticise Singapore not
because they are concerned about democracy and human rights for our three

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million people but because they believe we are setting the wrong example for
China.
From 1993 to 1997 Clinton’s policy on China underwent a sea change. This
was the result of a crisis caused by China’s missile exercises in the Straits of
Taiwan in March 1996 and the United States’ response of sending two aircraft
carrier groups to the waters east of Taiwan. This stand-off led to a re-
examination of positions by both China and the United States. After intense
discussions between their top security officials, relations stabilised. President
Jiang Zemin made a successful state visit to Washington in October 1997, and
President Clinton made a return visit to Beijing in June 1998 when he was
agreeably surprised to find Jiang ready to reciprocate their live TV press
conference in Washington. When he arrived in Hong Kong on his way out, he
said President Jiang Zemin was “a man of extraordinary intellect, very high
energy, a lot of vigour. He has a quality that is profoundly important at this
moment of our history: he has a good imagination. He has a vision, he can
visualise a future that is different from the present.”
Yet within months, this warmth turned cold as the Cox Report of the Senate
committee investigating the loss of nuclear missile secrets blamed it on Chinese
espionage. Leaks of the Cox Report created such a hostile mood in Congress that
President Clinton did not seize the offer to close a WTO deal with Chinese
Premier Zhu Rongji in Washington in April 1999. Within two weeks, in May,
American bombs hit the Chinese embassy in Belgrade, a tragic error. Relations
turned sour. This roller-coaster relationship between the world’s most powerful
and the world’s potentially next most powerful nation is unsettling to all in Asia.
US-China relations took a promising turn in November 1999 when they
agreed on the terms for China’s entry into the World Trade Organisation.
China’s entry will greatly increase its economic links, based on a framework of
set rules, with the United States and other member countries. This will lead to
mutually beneficial relationships.
From time to time American administrations can be difficult to deal with, as
during President Clinton’s first term (1993–96). After the Michael Fay incident,
Singapore suddenly became persona non grata because we were not following
the American liberal prescription for how to become a democratic and developed
country. But our relations warmed up again after the currency crisis in July
1997. The United States found us a useful interlocutor. Singapore was the only

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country in the region where the rule of law and sturdy banking regulations with
rigorous supervision had enabled it to withstand a massive capital outflow from
the area. At an APEC meeting in Vancouver in November 1997 President
Clinton accepted Prime Minister Goh Chok Tong’s proposal for a special
meeting of the affected countries and G7 members to discuss the economic crisis
and help them put their banking systems right and restore investor confidence.
The first meeting of G22 finance ministers was held in Washington in April
1998.
As the crisis worsened in Indonesia, there were close consultations between
key US Treasury and State Department officials and ours as we tried to halt the
meltdown of the Indonesian rupiah. President Clinton phoned Prime Minister
Goh before he sent out Deputy Treasury Secretary Larry Summers to see
President Suharto in January 1998. In March 1998 Clinton sent former Vice-
President Mondale as his personal representative to explain the gravity of the
situation to Suharto. Their efforts failed because Suharto never understood how
vulnerable Indonesia had become after he opened up its capital account and
allowed Indonesian companies to borrow some US$80 billion from foreign
banks.
In the middle of this financial crisis, Singapore further liberalised its
financial sector. What we did was out of our own convictions, but it coincided
with the IMF and US Treasury prescription on how to develop a financial free
market. We were commended by the Americans as an example of a free,
unfettered economy.
There will be ups and downs in Singapore’s relationship with the United
States because we cannot always follow their formula and act as their model for
progress. Singapore is a densely populated, tiny island located in a turbulent
region, and it cannot be governed like America. However, these are small
differences compared to the value of US presence in Asia, which has ensured
security and stability and made economic growth possible. America accelerated
this growth by opening up its markets to exports from non-communist countries.
If Japan had won the war, we would have been enslaved. If the United States had
not entered World War II and the British had continued as the major power in
Asia, Singapore and the region would not have industrialised so easily. Britain
did not allow its colonies to get ahead industrially.
When China entered the Korean War, threatening peace and stability in East
Asia, the Americans fought North Korean and Chinese forces to a standstill at
the 38th parallel. They helped to rebuild Japan with aid and investments, and

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made possible the industrialisation of South Korea and Taiwan. The United
States expended blood and treasure in Vietnam from 1965 to 1975 and checked
the spread of communism. American companies came to Southeast Asia to set
up repair facilities to support the US forces in Vietnam. Then they built
manufacturing plants unrelated to the Vietnam War, and exported their products
to America. This triggered off the industrialisation of Southeast Asia, including
Singapore.
America’s generosity of spirit grew out of an innate optimism that it could
give and still have more to give. Unfortunately this spirit weakened in the late
1980s because of trade and budget deficits. To correct the deficits, America
demanded that Japan and the other NIEs open up their markets, revalue their
currencies upwards, import more American products and pay royalties for
intellectual property.
After the collapse of the Soviet Union, Americans have become as dogmatic
and evangelical as the communists were. They want to promote democracy and
human rights everywhere, except where it would hurt themselves as in the oil-
rich Arabian peninsula. Even so, the United States is still the most benign of all
the great powers, certainly less heavy-handed than any emerging great power.
Hence, whatever the differences and frictions, all non-communist countries in
East Asia prefer America to be the dominant weight in the power balance of the
region.
My reservations in the 1960s about dealing directly with Americans were
because they acted as if their wealth could solve all problems. Many of their
officials then were brash and inexperienced, but I found them easier to work
with than I expected. I did not need interpreters to understand them. They too
could read me easily. Had I made my speeches only in Chinese or Malay, Bill
Bundy, the assistant secretary of state for East Asia, would not have read them
and initiated the relationship with successive administrations that began with my
meeting with President Johnson in October 1967. I was fortunate in getting on
with most of the US presidents and their principal aides, especially their
secretaries of state. Several have kept up our friendship even after they left
office. Working together for shared objectives, we learnt to trust each other and
became good friends.
America’s political process, however, can be unnerving for its friends.
Within 25 years I have seen impeachment proceedings started against two

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American presidents – Nixon in 1974 and Clinton in 1999. Fortunately, no great
harm was done to the state of the union. Just as great a source of anxiety is the
speed at which policies in Washington change with changes in the principal
players. It makes for unpredictable relationships. According to friendly
diplomats in Washington, these new faces bring fresh ideas and act as a
“flushing mechanism” to prevent the consolidation and fossilisation of a ruling
elite. I believe only a wealthy and solidly established nation like America can
roll with such a system.
Notwithstanding the openness of the American political process, no country
knows how America will react to a crisis in its part of the world. Were I a
Bosnian or a Kosovar, I would never have believed that Americans would
involve themselves in the Balkans. But they did get involved, not to defend
America’s fundamental national interests, but to uphold human rights and put an
end to crimes against humanity committed by a sovereign government against its
own nationals. Is such a policy sustainable? And applicable worldwide? In
Rwanda, Africa, it was not. Hence American friends keep reminding me that
their foreign policy is often driven not by considerations of strategic national
interest, but by their media.
In spite of many mistakes and shortcomings America has succeeded, and
spectacularly so. In the 1970s and ’80s, its industries were going down as against
Japanese and German industries, but they came back with unexpected vigour in
the 1990s. American corporations lead the world in the use of computers and
information technology. They have exploited the digital revolution to restructure
and flatten their organisations, and increased productivity to previously unheard
of levels while keeping inflation low, increasing profits and staying ahead of the
Europeans and Japanese in competitiveness. Their strength is in their talent,
nurtured in their universities, think-tanks, and in the R&D laboratories of their
MNCs. And they attract some of the brightest minds from the world over,
including many from India and China, to new, high-growth sectors like Silicon
Valley. No European or Asian nation can attract and absorb foreign talent so
effortlessly. This gives America a valuable advantage, like having a magnet to
draw in the best and brightest from the world.
It has taken some time for Europeans to acknowledge the superiority of the
American free-market economy, especially its corporate philosophy of
concentrating on rates of return on equity. American executives are driven by
their ceaseless search for increased shareholder value through higher
productivity and competitiveness. The cost of this high performance-high reward

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system is an American society more divided than European or Japanese society.
These two societies do not have the equivalent of the American underclass.
European corporate culture puts much importance on social unity and harmony.
German companies have trade union representatives on their management
boards. But they pay a price in lower rates of return on capital and poorer
shareholder value. The Japanese have life-long employment and place high
value on loyalty to and from their employees. The drawback is over-manning
and loss of competitive edge.
However, in the 1990s many European companies have listed themselves on
the New York Stock Exchange. This requires them to focus on quarterly returns
and shareholder value. Acceptance of American standards of corporate
governance is the accolade Europeans have paid to Americans.
As long as its economy leads the world, and America stays ahead in
innovation and technology, neither the European Union nor Japan nor China can
displace the United States from its present pre-eminent position.

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