Dear Ms Stockman

Recently you published an op-ed entitled “He Made His Country Rich, but Something Has Gone Wrong With the System”. Unfortunately, ignoring Lord Acton’s observation that “Power corrupts and absolute power corrupts absolutely” you give the impression that it is not the system of authoritarian or totalitarian dictatorship which is fatally flawed but that it is the failure of those who come after to maintain the high moral standards of the founding father.

An example of this kind of magical thinking is the apologists for Communism who have said that if Lenin had lived longer he would have prevented Stalin from seizing power and prevented the deaths of over 25 million people at Stalin’s hands. The argument is that somehow Russia would have evolved into a democratic socialist state with freedom of expression, or at least for those who had the right views. The same thing has been said by those who lament that Deng, who ruthlessly crushed the Tiananmen protests and killed hundreds of thousands was followed by Xi Jin Ping. Lee Kuan Yew (LKY) actually praised Deng for ruthlessly stamping out the protests, saying that it was better that a few thousand students died than that China be plunged back into chaos and civil war. The truth is that the system set up by the original dictator was flawed from the outset because it placed too much power in the hands of one person.

You cite an argument in favour of authoritarian strongmen is that they can ruthlessly cut through the obstacles holding back economic development and sweep aside vested interests. Yet this argument does not make much sense. You say the word of a dictator can reassure investors that their investments will be protected, filling the void of a shaky court system. While Singapore is not a good example since the British bequeathed a well developed legal system and established rule BY law (to keep the colonial population in check), this dependence on one man’s word or promise is surely a double-edged sword because it can just as easily be revoked.

You call LKY’s reign a “benevolent” dictatorship but it was not so benevolent to the thousands who suffered under his rule, including my father and our family. No one may have been murdered or “disappeared” and there was no system of gulags but hundreds were detained without trial, some for decades, for nothing more than representing a potential electoral threat to the man in power. At one time Singapore had the dubious distinction of having the world’s longest serving political prisoner, Chia Thye Poh, whom William Gibson mentHundreds were driven into exile to escape imprisonment. This continued with Operation Spectrum in the 1980s when several individuals were detained on claims that they were Marxists and forced to sign confessions under torture. When some recanted those confessions they were re-arrested and detained again for several years. My father Joshua Benjamin Jeyaretnam (JBJ) was the first Opposition MP to be elected to Parliament since 1966 after the Barisan Socialis MPs walked out. This incurred the wrath of LKY who used his control of the prosecutorial and judicial branches of government to have JBJ convicted, jailed and disqualified for five years from standing in 1986. The UK Privy Council, which was Singapore’s highest court at that time but to which LKY cut links after the judgement, called it a “grievous miscarriage of justice” and asked the Government to remove JBJ’s conviction. Naturally Singapore refused to do so. Shengwu Li’s (LKY’s grandson and current PM Lee Hsien Loong’s nephew) observation, when talking about how he has been driven into exile through politically motivated prosecutions, that authoritarian rulers do not take even a 5% chance of being unseated if they can avoid it, was particularly relevant here.

Many in the West, employing a crude utilitarian calculus, might argue that it does not matter if the human rights of a few liberals and members of the upper classes get trampled on and the lives of a few idealistic naifs are ruined, if the end result is that the majority of the people are made better off. You say that LKY made the country rich. I would disagree with that assertion. Firstly the country was already rich and Singapore’s growth after his ascension to power was more the result of Singapore’s strategic position and the long boom in world trade that began in the 1960s as the US current account moved into deficit as a result of the Vietnam war and steadily growing budget deficits.

Singapore was the jewel in the crown of Britain’s empire occupying an unparalleled strategic position at the crossroads of world trade that was well known since the sixteenth century when a Portuguese admiral said that whoever controlled the Straits of Malacca had their boot on the throat of Venice, which controlled the all-important spice trade. In 1929 Singapore’s per capita GDP in PPP terms was higher than that of Japan. In 1950, after the Great Depression and the War, Singapore’s GDP per capita was still higher than the rest of Asia. In fact when LKY took over in 1960, Singapore’s GDP per capita was lower than it had been for much of the 1930s (see the Maddison Project for figures). Using a depressed base year for comparison helps to flatter LKY’s record.

You compare Singapore’s growth in GDP per capita with that of Jamaica. However that is an unfair comparison as Jamaica was a primarily agricultural country with none of the strategic advantages of Singapore, which was almost completely urbanised at independence. Jamaica had a legacy of slavery and extreme underinvestment by the British in health and education in the same way as much of their empire.. The British invested substantially more in developing Singapore, as a major port, oil refining centre and naval base than they did in Jamaica.

A better comparison is with Ireland, whose per capita GDP in 1960 was US$686. By 2021 it had risen to US$100,172. Its compound rate of growth over the last 60 years is almost the same as Singapore’s and its GDP per capita almost as misleading as a proxy for its people’s standard of living. Both countries have adopted similar policies of attracting MNC investment, driven by tax breaks that have made the Irish GDP growth rates the subject of much bemusement, including by Paul Krugman in your newspaper who dubbed it “Leprechaun Economics”.

Singapore’s GDP per capita is even more inflated for two reasons. Firstly foreign workers comprise nearly 50% of its workforce. This means the ratio of dependents (because foreign workers are usually forced to leave their families at home or are young and unmarried) to workers is unusually low. Secondly Singaporeans work some of the longest hours in the world. If you normalise GDP per capita by dividing it by hours worked Singapore’s performance since 1960 looks much more pedestrian. On a Purchasing Power Parity (PPP) basis, Singapore’s output per hour worked was on the same level as the UK in 2019 and well behind that of France and Germany. It was only about two-thirds of the US, Swiss and Danish levels. Using PPP rather than market exchange rates flatters the comparison.

It is also inappropriate to compare Singapore with large countries rather than cities as Singapore is nearly 100% urbanised. If we compared GDP per hour worked with other cities like New York, Los Angeles, Milan, Paris or London the comparison would be even more unflattering.

The truth is that Singaporeans have to work very long hours in order to earn a living income. Contrast minimum wages of around S$17 per hour in London, S$20 in New York and S$35 an hour in Zurich with earnings for the lowest paid Singaporeans of about S$7 an hour or less (there is no minimum wage). Prices for essential foodstuffs and other items are often double what consumers in other countries pay. Because of the lack of a minimum wage and competition from very cheap foreign workers the labour force participation rate for citizens is very low, disguised by not counting men doing National Service and the Government’s subsidies for skills upgrading courses, many of which are of questionable value. You say that Lamborghinis and Ferraris are everywhere but these mostly belong to foreigners. Singaporeans have to pay the highest prices in the world for average autos. They also pay some of the highest prices in the world per square metre for public housing, which is leased but reverts back to the Government at the end of 99 years. Singaporeans do not really own their own homes.

In contrast to democracies like the US and UK which have a free press, freedom of information legislation and protection for whistleblowers, it is impossible to find out even basic facts like the size of the reserves or how much the Prime Minister’s wife is paid, her salary during her nearly 20 years as CEO of Temasek Holdings, one of two sovereign wealth funds, rubber stamped by a board ultimately appointed by the Prime Minister. I have estimated the reserves to be around S$3 trillion (see here and here) which would amount to around a million dollars for every Singapore citizen. Singapore claims that its reserves benefit its citizens in the form of annual contributions to the Budget but I have repeatedly shown that these are largely fake and that the Budget is an exercise in hiding money from the people (see here, here and here). The Government’s cash surplus since 2004 alone is close to S$400 billion and there has been a deficit in only one year (2020). Despite what should be an embarrassment of riches Singaporeans enjoy none of the social safety net that citizens of other countries, even those with large debts, enjoy such as old age pensions, free health care, disability, unemployment or child benefits. The Government’s desperation to raise additional revenue by raising indirect taxes during a global economic slowdown is a further warning sign that all is not well with the state of the reserves.

The fact that power was handed from LKY to his son Lee Hsien Loong (LHL), after a carefully managed interregnum with PM Goh Chok Tong but with power behind the scenes still wielded by LKY, who remained Senior Minister, and his son, without even a challenge from within the ruling party, makes Singapore qualitatively different from either China or Russia and more akin to the dynastic totalitarian regime of North Korea. While LHL has used Western spin doctors to construct a narrative of benign autocracy and even liberalisation under his rule, the truth is that he has kept and extended his father’s armoury of repressive legislation which gives him control over not only the media, which is a state monopoly, the electoral machinery, the Attorney General’s Chambers, the judiciary, the sovereign wealth funds and central bank (where he is chairman of GIC and his wife was CEO of Temasek) but over every institution in Singapore, a point which his brother makes also in your article.

It is not the system that has gone wrong. Any system which places absolute power in the hands of one person is flawed from the start. People often wonder why Singapore is the exception to the general rule that countries ruled by dictators usually collapse in a miasma of corruption and economic mismanagement and search for some missing X factor that can be replicated by brutal and murderous tyrants like Paul Kagame, who is a disciple of LHL and has his own Western fan club including Tony Blair. However instead of thinking that Singapore succeeded because of the totalitarian nature of its regime, we need to recognise that it succeeded in spite of it. Its rapid economic growth coincided with the beginning of a long boom in global trade and increase in globalisation which Singapore’s incomparable strategic position allowed it to take full advantage of. However even the success of that growth in raising living standards is much more mixed than the simple story of soaring GDP per capita, as accepted at face value by much of the world’s media, academics and politicians, as I have shown. Those conditions which led to its success have now slowed down dramatically or reversed. As growth falters and the shortfall in Singaporeans’ living standards compared to supposedly much poorer countries becomes more apparent, LHL can be blamed for failing to adapt and for persevering with an economic model that no longer works. He has also proven to be just as repressive as his father and even more ruthless and brazen in advancing his family’s interests, paying his wife out of state funds in a manner that even his father declined to do. However it would be a mistake to imagine that if LKY were alive today the system would be gentler or fare better economically.

Yours sincerely

Kenneth Jeyaretnam

Published by kjeyaretnam

I'm a Singaporean economist who became an opposition activist. I blog to provide an alternative to the porkies that the Pinkies tell. It just so happens that my alternative is the truth. That's why I've never been sued in any civil or criminal court no matter how hard hitting my criticism. I'm quoted and interviewed and asked to speak across the world but largely censored in Singapore in an effort to silence my political opinions. The left hate me because they think I split their vote and because I eschew their outmoded economic models. Models that don't work. The Right and the Conservatives hate me because I'm a liberal. I'm not sure what the middle think of me. I don't think there are more than a handful of people in the middle, here in Singapore. I'm a Singaporean born and bred, dual heritage, my parents Singaporean established here before the State of Singapore was created. I'm not Eurasian. I read economics at Cambridge and could be broadly described as from the Keynesian school but I believe in interventions. I was formerly a successful hedge fund manager. After economics and politics my greatest interests are history, film and Makan. I run but I run so I can eat like a Singaporean. View all posts by kjeyaretnam