From Third World to First The Singapore Story pdfdrive com

éminence grise
on international
affairs. Bright but not profound, he claimed good fortune of geography and

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history had blessed Ceylon with peace and security so that only 2.5 per cent of
its budget was spent on defence. I wonder what he would have said in the late
1980s when more than half its budget went into arms and the defence forces to
crush the Jaffna Tamil rebellion.
Ceylon was Britain’s model Commonwealth country. It had been carefully
prepared for independence. After the war, it was a good middle-size country
with fewer than 10 million people. It had a relatively good standard of education,
with two universities of high quality in Colombo and Kandy teaching in English,
a civil service largely of locals, and experience in representative government
starting with city council elections in the 1930s. When Ceylon gained
independence in 1948, it was the classic model of gradual evolution to
independence.
Alas, it did not work out. During my visits over the years, I watched a
promising country go to waste. One-man-one-vote did not solve a basic problem.
The majority of some eight million Sinhalese could always outvote the two
million Jaffna Tamils who had been disadvantaged by the switch from English to
Sinhalese as the official language. From having no official religion, the
Sinhalese made Buddhism their national religion. As Hindus, the Tamils felt
dispossessed.
In October 1966, on my way back from a prime ministers’ conference in
London, I visited Colombo to meet Prime Minister Dudley Senanayake. He was
a gentle if resigned and fatalistic elderly man. When we played golf on the
former Royal Colombo golf course, he apologised for the encroaching squatter
huts and the goats and cows on the fairways. He said it was inevitable with
democracy and elections; he could not justify keeping these green open spaces in
the centre of the city. He sent me by train to Nuwara Eliya, their once beautiful
hill station. It was a most instructive lesson on what had happened after
independence. The food on the train (in a special carriage) was poisonous. The
crab was badly contaminated and stank. I went immediately to the toilet and
spewed it all out. This saved me. In Nuwara Eliya, I stayed at the former British
governor’s hill residence, “The Lodge”. It was dilapidated. Once upon a time it
must have been well-maintained, with roses (still some left) in the garden that
looked like an English woodland. About 5,000 feet above sea level, it was
pleasantly cool. I played golf on a once beautiful course; like the one in
Colombo, this also was encroached upon by huts, goats and cows.
At dinner, a wise and sad-looking elderly Sinhalese explained that what had
happened was inevitable with popular elections. The Sinhalese wanted to be the

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dominant race; they wanted to take over from the British as managers in the tea
and coconut plantations, and from the Tamils who were the senior civil servants.
They had to go through this tragedy of making Sinhalese the official language
for which they had paid dearly, translating everything from English into
Sinhalese and Tamil, a slow and unwieldy process. The universities taught in
three languages: Sinhalese to the majority, Tamil to the Jaffna Tamils, and
English to the Burghers. At the university in Kandy I had asked the vice-
chancellor how three different engineers educated in three languages
collaborated in building one bridge. He was a Burgher, and wore a Cambridge
university tie so that I would recognise he had a proper PhD. He replied, “That,
sir, is a political question for the ministers to answer.” I asked about the books.
He replied that basic textbooks were translated from English into Sinhalese and
Tamil, always three to four editions late by the time they were printed.
The tea plantations were in a deplorable condition. The locals who had been
promoted were not as good supervisors as their British predecessors. Without
strict discipline, the tea pluckers were picking not only young shoots but also
full-grown leaves which would not brew good tea. Their coconut plantations had
also suffered. It was, said the old Sinhalese, the price people had to pay to learn
how to run the country.
I did not visit Ceylon for many years, not until I had met their newly elected
prime minister, Junius Richard Jayewardene, in 1978 at a CHOGRM conference
in Sydney. In 1972 Prime Minister Mrs Bandaranaike had already changed the
country’s name, Ceylon, to Sri Lanka, and made it a republic. The changes did
not improve the fortunes of the country. Its tea is still sold as “Ceylon” tea.
Like Solomon Bandaranaike, Jayewardene was born a Christian, converted
to Buddhism and embraced nativism to identify himself with the people. In his
70-odd years, he had been through the ups and downs of politics, more downs
than ups, and become philosophical in his acceptance of lowered targets. He
wanted to move away from Sri Lanka’s socialist policies that had bankrupted it.
After meeting me in Sydney, he came to Singapore, he said, to involve us in its
development. I was impressed by his practical approach and was persuaded to
visit Sri Lanka in April 1978. He said he would offer autonomy to the Tamils in
Jaffna. I did not realise that he could not give way on the supremacy of the
Sinhalese over the Tamils, which was to lead to civil war in 1983 and destroy
any hope of a prosperous Sri Lanka for many years, if not generations.
He had some weaknesses. He wanted to start an airline because he believed it
was a symbol of progress. Singapore Airlines employed a good Sri Lankan

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captain. Would I release him? Of course, but how could an airline pilot run an
airline? He wanted Singapore Airlines to help. We did. I advised him that an
airline should not be his priority because it required too many talented and good
administrators to get an airline off the ground when he needed them for
irrigation, agriculture, housing, industrial promotion and development, and so
many other projects. An airline was a glamour project, not of great value for
developing Sri Lanka. But he insisted. So we helped him launch it in six months,
seconding 80 of Singapore Airlines’ staff for periods from three months to two
years, helping them through our worldwide sales representation, setting up
overseas offices, training staff, developing training centres and so on. But there
was no sound top management. When the pilot, now chairman of the new airline,
decided to buy two second-hand aircraft against our advice, we decided to
withdraw. Faced with a five-fold expansion of capacity, negative cash flow, lack
of trained staff, unreliable services and insufficient passengers, it was bound to
fail. And it did.
It was flattering to have Sri Lanka model their country after Singapore. They
announced that they would adopt the Singapore-style Area Licensing Scheme to
reduce traffic entering the city, But it did not work. They started a housing
programme in 1982 based on ours, but there was no adequate financing. They set
up a free trade zone only slightly smaller than the area of Singapore which might
have taken off but for the Tamil Tigers whose terrorist tactics scared investors
away.
The greatest mistake Jayewardene made was over the distribution of
reclaimed land in the dry zone. With foreign aid, he revived an ancient irrigation
scheme based on “tanks” (reservoirs) which could store water brought from the
wet side of the mountains. Unfortunately, he gave the reclaimed land to the
Sinhalese, not the Tamils who had historically been the farmers of this dry zone.
Dispossessed and squeezed, they launched the Tamil Tigers. Jayewardene’s
private secretary, a Jaffna Tamil loyal to him, told me this was a crucial mistake.
The war that followed caused 50,000 deaths and even more casualties, with
many leaders assassinated. After more than 15 years, it shows no sign of abating.
Jayewardene retired in 1988, a tired man. He had run out of solutions.
Ranasinghe Premadasa, who succeeded him, was a Sinhalese chauvinist. He
wanted the Indian troops out of the country, which was not sensible. They were
doing a nasty job for Sri Lanka. When the Indian troops left, he was in a worse
position. He tried to negotiate with the Tamil Tigers and failed. He was not
willing to give enough away.

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I met him on several occasions in Singapore after he became president and
tried to convince him that this conflict could not be solved by force of arms. A
political solution was the only way, one considered fair by the Jaffna Tamils and
the rest of the world; then the Tamil United Liberation Front, the moderate
constitutional wing of the Tamil home rule movement, could not reject it. I
argued that his objective must be to deprive the terrorists of popular support by
offering the Tamils autonomy to govern themselves through the ballot box. He
was convinced he could destroy them. In 1991 and 1992 he sent the Sri Lankan
army to fight major battles against the Tamil Tigers. They did not succeed. In
1993, at a May Day parade, a suicide bomber approached him in a street
procession. He and many others died. His successor, Mrs Bandaranaike’s
daughter, President Chandrika Kumaratunga, tried negotiation and war. She
recaptured the Jaffna peninsula but did not destroy the Tamil Tigers. The
fighting goes on. It is sad that the country whose ancient name Serendip has
given the English language the word “serendipity” is now the epitome of
conflict, pain, sorrow and hopelessness.
We established diplomatic relations with Pakistan in 1968 but for many
years had little trade or other links. We did not share common positions in
international affairs until the 1980s when the Afghan and Cambodian conflicts,
both funded by the Soviet Union, brought us together.
President Zia ul-Haq visited Singapore in 1982 as part of a tour of Southeast
Asia. He told me his sole purpose in visiting Singapore was to meet me as the
person responsible for modern Singapore. I gave him my standard reply, that
modern Singapore was the work of a team. We discussed Indo-Pakistan
relations. Singapore relations with India then were strained because of
differences over Cambodia. I agreed with Zia that Soviet strategy and objectives
had created the war in Afghanistan and Cambodia.
He invited me to visit Pakistan, which I did in March 1988. He welcomed me
in style as President Marcos had done in 1974. Once our commercial aircraft
crossed the India-Pakistan border near Lahore, six F-16 fighter planes escorted
us to Islamabad. He mounted a huge guard of honour for inspection, and
arranged for a 19-gun salute and hundreds of flag-waving children and
traditional Pakistani dancers to greet me at the airport. I was impressed to see
Islamabad noticeably cleaner and better maintained than Delhi, with none of the
filth, slums and streets overflowing with people in the city centre. Standards at

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their guesthouse and hotels were also higher.
Zia was a heavy-set man, with straight black hair carefully combed back,
thick moustache, a strong voice and a confident military manner. He was a strict
Muslim and made Pakistan’s military officers go dry like the rest of the country.
As his guests, we were provided with locally brewed beer at the guesthouse. At
dinner, Zia made an off-the-cuff speech to compliment me, not just on
Singapore, but especially for standing up to the Western press. He had been
following the Singapore government’s exchanges with the Western media and
cheered for us. He had suffered in their columns and was delighted we were not
taking it lying down. He conferred on me Pakistan’s “Order of the Great Leader”
(Nishan-I-Quaid-I-Azam).
In a press conference before departure, I praised President Zia for his
courage in undertaking the dangers of giving logistics support to the Afghans.
Had he been a nervous leader who preferred to look the other way, the world
would have been worse off. Unfortunately, a few months later, before our
relations could progress, Zia was killed in a suspicious plane crash.
Ties with Pakistan again stagnated until Nawaz Sharif became prime
minister in November 1990. He was a stout man of medium height, short for a
Pakistani, already bald although only in his late 40s. Unlike the Bhuttos, Nawaz
Sharif came not from the landed property feudal elite but from a middle-class
business family in Lahore. He had built up steel, sugar and textile companies
during the years when Pakistan was ruled by military leaders, including Zia ul-
Haq. He visited Singapore twice in 1991 – in March, quietly, to study the
reasons for our economic progress; in December, to ask me to visit his country
and advise on the opening up of its economy. Pakistan, he said, had started on
bold reforms, using Singapore as a model.
He struck me as keen to change and make Pakistan more market-oriented. I
agreed to go the following year. At my request he sent the secretary-general of
his finance ministry, Saeed Qureshi, to Singapore to brief me. We met for three
sessions of three hours each, to discuss facts and figures he had sent earlier. It
was soon obvious that they faced dire and intractable problems. They had a low
tax base, with income tax yielding only 2 per cent of their GDP. Many
transactions in land sales were not documented and tax evasion was widespread.
They subsidised agriculture, railways and steel mills. Defence took 44 per cent
of the budget, debt servicing 35 per cent, leaving 21 per cent to administer the
country. Hence their budget deficits were 8–10 per cent of their GDP and
inflation was reaching double-digit figures. The IMF had drawn their attention to

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these parlous figures. The solutions were obvious but political will was difficult
to exercise in a country without an educated electorate and with the legislature in
the grip of landowners who controlled the votes of their uneducated tenant
farmers. This made land and tax reforms near impossible. Corruption was
rampant, with massive thievery of state property, including illegal tapping of
electricity.
I spent a week in Pakistan from 28 February 1992. I had two meetings with
Prime Minister Nawaz Sharif and his key cabinet colleagues, including his
finance and economics minister, Sartaj Aziz, an irrepressible optimist. After I
returned I sent Nawaz Sharif a report together with a personal letter to
summarise the actions he should take.
He was a man of action with much energy. He sympathised with the plight of
taxi drivers and lowered taxes for taxis even though that raised problems of
fairness to other car buyers. His business background made him believe in
private enterprise as the solution for slow growth and he was eager to privatise
state enterprises. But in Pakistan they were not sold by inviting open tenders.
Friendship, especially political ones, determined who got what. He always
believed that something could be done to make things better. The problem was
that often he had neither the time nor the patience to have a comprehensive study
made before deciding on a solution. On balance, I believed he was better able to
govern than Benazir Bhutto, the leading opposition leader who was later to
succeed Nawaz Sharif. He knew more about business, with or without patronage,
than either she or her husband, Asif Zadari.
On my journey home I stopped in Karachi to meet Benazir Bhutto. She was
full of venom for Nawaz Sharif and President Ghulam Ahmed Khan. She said
her party had been unfairly treated; the government had tried to discredit her and
her party by prosecuting her colleagues and her husband. The corrupt police
were abetting the government, and a troika of the military, the president and the
prime minister ran the country. She also claimed she had started their current
push for deregulation and had passed the legislation for privatisation.
Nawaz Sharif visited Singapore in December 1992 on his way home from
Japan. He wanted me to make a follow-up visit to assess progress in
implementing my recommendations. He had privatised 60 per cent of targeted
enterprises and foreign investments had increased. Again Saeed Qureshi briefed
me. I discovered many of my recommendations had not been implemented. I had
feared this would happen. Before I could visit Islamabad again, confrontation
between President Khan and Prime Minister Nawaz Sharif led to the resignation

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of both and fresh elections. Benazir Bhutto became prime minister.
Shortly after the election, I met Benazir Bhutto in Davos in January 1994.
She was elated and full of ideas. She wanted Singapore to participate in a road
project from Pakistan to Central Asia going through Afghanistan. I asked for a
detailed proposal for us to study. She also wanted us to look into the viability of
sick enterprises in Pakistan and take them over. Her husband was even more
ebullient. He was going to build an island off Karachi to develop as a free port
and a free trade zone with casinos. It was totally uneconomic. Pakistan had so
much unused land, what need was there to build an island? Their approach was
simple: Singapore was successful, had lots of money, and therefore could invest
in Pakistan and make it as successful.
In March 1995 Bhutto and her husband visited Singapore. She said she had
heeded my advice in Davos and ensured that all her proposals had been well
thought through. She invited Singapore to transfer its labour-intensive industries
to Pakistan. I said she would first have to convince our businessmen. When an
investor saw on television every night Muslims killing other Muslims in Karachi
with heavy weapons and bombs, he must ask himself, why should he be
involved? I did not visit Pakistan. She was dismissed from office in 1996 by
Leghari, a president she herself had appointed. Nawaz Sharif won the
subsequent election in February 1997, to return as prime minister.
Pakistan’s deep economic and political problems remained. Too much of
their budget went into defence. Their politics continued to be poisoned by
implacable animosities between the leaders of the two main parties. Asif Ali
Zadari was charged with the murder of his wife’s brother, Murtaza Bhutto. And
husband and wife were both charged for corruption involving vast sums of
money, some of which was traced to Switzerland.
To compound Pakistan’s problems, in May 1998 India conducted several
nuclear explosions. Two weeks later Pakistan conducted its own tests. Both were
economically stretched, Pakistan more than India. When I met Pakistani Prime
Minister Nawaz Sharif during his visit to Singapore in May 1999, he assured me
that he had had good discussions with India’s Prime Minister Vajpayee the
previous month and that neither side intended to deploy missiles with nuclear
warheads. He ventured the view that because both had nuclear capabilities, an
all-out war between them would no longer be possible. It is an outcome devoutly
to be wished.
The Pakistanis are a hardy people with enough of the talented and well-
educated to build a modern nation. But unending strife with India has drained

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Pakistan’s resources and stunted its potential.

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