The Legacy of Lee Kuan Yew: the Alternative Path to Economic Success

One way to summarize the role of Lee Kuan Yew in world’s history and the world economy is to state the obvious: he showed that almost everything is possible in the realm of economic transformation and modernization.

Last summer I travelled to Singapore on business and had the pleasure to once again marvel at one of the world’s greatest economic success stories. The airport, the highways, hotels, the modern city landscape – everything delivers quite clearly the message that you are in the “first world” setting. The people are well-educated and proud of their country – the cab driver that took me to business meetings showered me with historical facts about Singapore and proudly expounded on the intricacies of the country’s economic success. No wonder then that the business journey into Singapore turns into one of constant reflection into the drivers of economic modernization. Indeed, every time I come over to Singapore I cannot help but ask myself about which ingredients of Singapore’s economic success could be taken on board by Russia. But is it at all valid for Russia, the world’s largest and diverse country, to seek to emulate the policies of a city-state such as Singapore?

In fact, Lee Kuan Yew and Singapore’s modernization patterns became very popular with Russia’s political and business establishment in the past 10-15 years, with high-ranking officials visiting Singapore on several occasions to learn from its modernization experience. The main attraction was most likely that Singapore offered an alternative to the standard prescriptions of economic transformation that failed in the 1990s. It was not only open in sharing its experience, but also devoid of the proselytizing zeal that Russia often encountered in the past. Most importantly, however, Singapore appeared to have solved the very problems that appear to present challenges for Russia today, most notably corruption as well as the development of infrastructure and “human capital”.

Some of Lee Kuan Yew’s prescriptions, in particular the need to curb corruption, appear to be indispensable for any country embarking on the path of modernization. The way Singapore approached this challenge was via a combination of carrots and sticks – the wages of civil servants were brought to relatively high levels to lower the incentives to engage in corruption, while penalties were applied uniformly, including with respect to the “inner circle” of the country’s officialdom. The result is that for years (including in 2014-2015) Singapore stands at the very top in the world in the Doing business survey of the World bank, including in such “red-tape-intensive” areas as enforcing contracts and dealing with construction permits (where Singapore is #2 in the world).

With corruption successfully countered, the nation became increasingly more corporatist – like a corporation it was unified around the goal of increasing competitiveness. In this respect, one striking feature for me in Singapore was the balance observed in religious and cultural spheres – alongside the Buddhist, Taoist, Hindu temples were Christian churches and Muslim mosques; the local museums featured life-styles of the indigenous population as well as the history of European presence. But while a lot of attention is accorded to history and culture, the most powerful impression from Singapore is the degree to which the country is embracing modernity and seeking to lead in the future.

Singapore’s architectural beauty is that of modernity and Singapore’s key asset is the foundation created for research, innovation and the development of “human capital”.

Perhaps this is the one factor of success that has not been discussed as much in Lee Kuan Yew’s miracle - the development of “human capital” that became one of the pillars of Singapore’s modernization. According to INSEAD's latest survey of the Global Talent Competitiveness Index, Singapore ranked second in the world after Switzerland. The survey identified Singapore as being particularly strong in attracting talent as well as in providing its citizens with world-class education. Perhaps this in turn serves as one of the main competitive strengths of Singapore’s economy – according to the WEF’s World Competitiveness Survey Singapore is #2 in the world behind Switzerland.

One way to summarize the role of Lee Kuan Yew in world’s history and the world economy is to state the obvious: he showed that almost everything is possible in the realm of economic transformation and modernization. A vision and a determination to succeed can take even the smallest of countries without significant resource endowments to the heights of nearly all global league tables. This was the inspiration to the other Asian success stories as well as other countries around the globe that were struggling to find their gateway to faster growth trajectories.

Perhaps most importantly, Singapore’s story of success also points to the possibility and need for the existence of different models of development – rather than the world converging to one single framework of economic policy-making, economic success for the global economy and its members can only come from the divergence of economic models that are designed to be tailor made to the specific circumstances of the respective countries, rather than to a “fit-for-all” amalgamation of “sacred cows” and ideological taboos. In the end Lee Kuan Yew’s key legacy is that it is not the simplistic replication of leading countries’ blueprints, but rather the innovation and boldness to follow one’s own development path that constitute true and lasting success in economic modernization.

Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.