Singapore, Inc.

In a recent interview with Dwarkesh Patel, Former UK Prime Minister Tony Blair discussed the policies of Lee Kuan Yew—the father of modern Singapore.  He suggested that Lee made three key decisions early in his administration, which led to Singapore achieving a high level of economic development:

1.  Singapore adopted English as its national language.

2. Singapore became highly open to foreign capital and talent.

3.  Singapore adopted a zero tolerance policy for corruption, combined with salaries for top government officials that were an order of magnitude higher than typical in the public sector.

This made me think of the similarities between Singapore and corporations based in Switzerland.  Many corporations in Switzerland use English as their official language, despite the fact that their country’s main ethnic groups (German 62.1%, French 22.8%, and Italian 8.0%) all speak other languages.  Singapore also has a complex ethnic mix including Chinese (75.9%), Malay (15.1%) and Indian (7.4%.)   Blair noted that Lee’s decision to have Singapore adopt English was quite controversial at the time.

Switzerland is a highly open economy, which welcomes foreign investment.  Approximately 30% of Switzerland’s population is foreign born, far higher than the 10% to 20% typical in Western Europe.  Singapore also welcomes foreign talent and investment, with 37% of its population foreign born.  Again, Lee’s policy was controversial at the time, as import substitution was in vogue at the time Singapore was founded (in 1965.)

Like Singapore’s government, Swiss companies do not tolerate corruption, and pay relatively high salaries to top executives.  Lee’s policies regarding corruption and public sector salaries are quite unusual in the developing world.

Ethnic strife is a very common problem in many parts of the world.  Switzerland has used political decentralization to reduce the danger of conflict between regions speaking different languages.  Decentralization would not be as feasible in a small city-state like Singapore, but by adopting English as a language Singapore was able to at least somewhat reduce the salience of ethnicity.

I don’t know if Lee Kuan Yew had Europe’s most successful country in mind when he adopted these policies, but whatever the motive, Lee ended up creating a Singaporean model that looks uncannily like a successful Swiss multinational corporation.

(0 COMMENTS)