THE ORIGIN OF DEVELOPMENTAL STATE IN SINGAPORE
Diandini Rahmawati Irawan Departemen Sosial Republik Indonesia Email: [email protected]
ABSTRACT
This essay describes the origin of developmental state in Singapore. What characteristic that Singapore has as a developmental state that can support their economic growth and political stability. This article uses a qualitative approach which data collection techniques are literature studies. This article will analyze the circumstances in which developmental state emerges. It will argue the relevancies in using the developmental state concept as an alternative solution in gaining rapid socio economic growth.
My contention is that the developmental state notion is still relevant in order to explain about the changing strategy in industrial policies. Moreover, the successful implementation of the developmental state will be continue if Singapore can deliver socioeconomic growth while at the same time it can manage class relation in society.
Keywords: developmental state, socioeconomic growth, class relation
ABSTRAK
Esai ini menggambarkan asal mula perkembangan negara di Singapura. Karakteristik apa yang dimiliki Singapura sebagai negara berkembang yang dapat mendukung pertumbuhan ekonomi dan stabilitas politik mereka. Artikel ini menggunakan pendekatan kualitatif yang teknik pengumpulan datanya adalah studi pustaka. Artikel ini akan menganalisis keadaan dimana negara berkembang muncul sebagai bantahan relevansi dalam menggunakan konsep pembangunan negara sebagai solusi alternatif dalam mendapatkan pertumbuhan ekonomi sosial yang cepat. Kesimpulannya saya adalah bahwa gagasan negara berkembang masih relevan untuk menjelaskan tentang strategi perubahan dalam kebijakan industri. Apalagi, keberhasilan implementasi pembangunan negara akan terus berlanjut jika Singapura dapat memberikan pertumbuhan sosial ekonomi sementara pada saat yang sama dapat mengelola hubungan kelas di masyarakat.
Kata Kunci: negara berkembang, pertumbuhan sosial-ekonomi, hubungan antar kelas
INTRODUCTION
Singapore has been described as an economic miracle in East Asia (Huff, 1995). Not only because of its economic growth has that exceeded many developed countries (in terms of GNP per capita) but also the rapid economic transformation from developing country into newly industrializing economy (Olds & Yeung, 2004).
Since its independence in 1965, the Singaporean government has using Developmental State approach in governing the country and justifying it as the key of their successful economic growth (Pereira & Tong 2005). In developmental state, the role of controlling economic development is played by the state. The state also intervening the
market, guiding selective industrial policy and offering protection to newborn industries (Chang, 2010).
Many scholars have pessimistic predictions regarding to the resilience of the developmental state in Singapore. They are argue that the Singapore developmental state will eventually lose its power and is expected to decline or transform into another form of governance procedures (such as, minimalize the state intervention in controlling market) because the state intervention in generating economic development or controlling the market would collapse the allocation mechanism (Pereira, 2008). However, instead of devolving the developmental state, Singapore has demonstrated to reinforce its position in the society by initiating several economic strategies in its industrial policies. According to this, I will analyze the origin of developmental state in Singapore in which it is developed and gain the successful economic growth.
METHODOLOGY
This research uses qualitative approach with data collection technique using literature study.
Although it does not use primary data, it is still concerned with the nature of the reference materials used. The elaboration of information from the literature study is then synthesized to conclude the conclusions about the origin of developmental state in Singapore in which it is developed and gain the successful economic growth.. This statement is at the same time a limitation of this study which only conducts studies of secondary data.
RESULT AND DISCUSSION
A. Developmental State in Singapore Context The term of Developmental State is widely adopted after the World War II period whereas there was a rapid economic growth in East Asian countries such as, Japan, South Korea, Hong Kong, Singapore and Taiwan. Many scholar use this term to explain the state roles in managing politic and economic strategy in order to achieve socioeconomic development. According to Pempel (Pempel, 1999) developmental state is a
term to define the state intervention of economic activities with long-term goal is to achieve national economic improvement. Moreover, the politic and economic strategies are controlled by state to support maximum economic growth and increase international competitiveness of their domestic economies. There is no single way to perform a developmental state. It is varied between one state and the other regarding to their economic policy and their historical experience, as consequence it cannot be exactly replicated (Chang, 2010).
According to Chalmers Johnson (Johnson, 1999) the developmental state consists of several characteristics: (1) the importance of state action in regulating economic development. The state focuses on combining the policy of economic growth, competitiveness and productivity rather than welfare policy, (2) the state is committed to the market and private property, (3) the market is guided by the state through instruments that is composed by an elite economic bureaucracy. A pilot agency is formed to conduct the economic planning, (4) the state is appointed with several institutions for maintaining coordination and consultation with the private sector. This consultation will be an important parts of policy formulation and implementation, (5) the task separation in terms of ruling and reigning.
While politicians reign, the bureaucrats rule. The bureaucrats could rule effectively if the reigning politicians are able to perform their genuine tasks.
Singapore is a small island with a small population with total land area of about 660 square kilometers. In the other words, Singapore is a tiny island state which has almost no natural resources (Gainsborough, 2009). This small geographical size then brings advantages for the state in ruling the society, for example the territory that only consists of one island has ease the government in building infrastructure across the island and undertaking public campaign regarding to the new policy through advertisement and counseling (Perry, Kong & Yeoh, 1997). In this case, the state ensures that infrastructure constraints will not hamper the economic growth. The small territory of Singapore is also one of the conditions which led to the emergence of Singapore developmental state. As the previous Prime Minister of Singapore,
Lee Kuan Yew said that it was necessary to plan extensively since the Singapore’s small size, there could be no room for failure (Hamilton-Hart, 2000).
Developmental state in Singapore was also formed because of several conditions and challenges. Financial and territorial threats, economic instability and geopolitical danger were the most significant reason to justify the emergence of developmental state. Singapore acquired its self-governing status from Britain in 1959 and spent 6 years before its independence (in 1965) as a part of the Malaysian Federation. Being surrounded by Malaysia, Indonesia and Brunei make Singapore become a strategic location for the business traveller and International tourist (Low 2001). This condition, however, creates a regional isolation for Singapore. The government of Malaysia, Indonesia and Thailand treated Singapore with great suspicion and perceived it as a threat regarding to economic subordination by Singapore (Perry, Kong & Yeoh, 1997).
Furthermore, a threat of Singapore’s national identity was became a challenge for the state to construct a society collectively that is focused on development. This is because Singapore’s population was composed of a large numbers of immigrants with little attachment to the island (Perry, Kong & Yeoh, 1997). Finally there was a political division of the government party.
The People’s Action Party (PAP) that ruling the government was originally arisen as a socialist party. PAP had used the socialist banner as a way to pursuit their independence from Britain, however when PAP governed the state, their political vision is against their former socialist allies. PAP saw it as a threat of communist resurrection of their opposition party (Huff, 1995). To overcome these challenges PAP had implemented a new policy agenda which focus on economic development that is integrated with political strategies. The PAP named it as ‘Ideology of survival’ in order to gain economic growth that can bring benefit for their nations.
A prerequisite condition for a developmental state to interfere the economic policy is a state autonomy. State autonomy is defined as the ability of the state to formulate and engage objectives there
are not merely reflective of the interests or demands of some classes or social group (Pinglé, 1999). In other words, the State will have its independence in taking the decision-making policy (for people’s prosperity) without the influence of elite groups or private enterprises. It also enables bureaucrats to examine all the relevant policy options and not to generate biased policies as a result of social pressure. In Singapore, there are no groups can control the state regarding the policy making.
The state also creates a synergistic relationship among bureaucrats, trade unions and industrialists in order to stabilize the socioeconomic condition (Pereira, 2008). The state autonomy will determine whether the developmental state will be devolving or otherwise success in attaining the economic goals. fact, in Singapore, the relations between private and public sector are seen as separate and distinct with low of corruption level because the Singapore’s politics operate according to the law (Olds & Yeung, 2004). This political and moral commitment need to be maintained in order to prevent the developmental state collapse.
However, there is no one can guarantee that this process of reigning and ruling the state can be totally free from kinds of moral hazards such as corruption, collusion and nepotism. Recently, there is a fact that shows the former prime minister of Singapore, Lee Kuan Yew, was suspected as a corruptor. This becomes one of evidence that the developmental state model has significant limitation regarding to its dependency of the state and bureaucrats (Gainsborough, 2009).
Furthermore, the concept of authoritarian state that is used in the developmental state model reduces the democracy and freedom of speech. This is proved by the PAP (the ruling party) ideology in their political management, which is pragmatism. This pragmatic style tends to adopt policies that offer the best chance of success, however this pragmatism has developed into the belief that policy can be justified as long as it is suitable with PAP’s perspective (Perry, Kong & Yeoh, 1997). One of the result, this creates discriminations for the opposition party constituents. For example, when a new MRT line was announced in 1996 the station closest to the opposition constituency location was allocated as
a second phase of development due to the PAP is seen this as a fair treatment, since economic success was engineered by PAP regime. In a similar manner, the Singapore’s political system is best reflected as a ‘hegemonic party system’ in which other political parties are allowed but there is no provision for political competition in equal manner (Perry, Kong & Yeoh, 1997). Additionally, the state is also control the press freedom in which the press activities are limited to open political debate. The PAP government implemented the Emergency Regulation the Printing Presses Ordinance, which made it illegal to operate a printing press without an annual license that can be withdrawn at any time.
Fortunately, instead of the fact that there are lots of moral hazard threats, the state tries to minimalize corruption, collusion and nepotism with using meritocracy system in their government sector. The bureaucrats and civil servants are employed based on their professionalism so that they will not be affected by the regime change.
Additionally, the government also provides the civil servants with a high standard of salary (Huff, 1995).
B. The Government Role in the Economy and Industrial Policy
The state intervention in economic policy-making in Singapore was started with establishment The Strategic Plan of economic growth. It described the position of Singapore as a global city which will become a ‘total business hub’ for the Asia-Pacific. Singapore offered the attractiveness of knowledge-intensive and high tech industries along with investment to enhance labour skills and innovation capacity (Perry, Kong
& Yeoh, 1997). This political power and economic expertise give the state an ability of transformative capacity to overcome the challenges of economic competitiveness.
According to Perry et al (Perry, Kong & Yeoh, 1997), there are five model of intervention that is undertaken by Singapore government. First is the establishment of agencies as a central planning bureau which formulates the economic planning and implementation. For example: (1) Economic
Development Board. EDB has functions as development assistance of the Ministry of Trade and Industry which operates as an investment promotion agency. It encourages the expansion of established enterprise and inward investment.
The scope of EDB is determining the eligibility for the taxation and incentives schemes. (2) Trade Development Board (TDB) was formed to promote international trade and provide assistance to foreign and local companies. (3) Jurong Town Corporation (JTC) has responsible for the development of industrial infrastructure in Singapore. (4) Government-linked companies (GLCs) are state-owned corporations that have a very large scope in services industry, infrastructure and manufacturing sector. The state has an ownership interest in over 500 companies. The government is relied heavily on GLCs, in other way the GLCs is a significant factor that running the Singapore’s economic.
Subsequently, the government also provides extensive use of subsidies and tax incentives in order to attract the potential investor in expanding their business. Thirdly, the state is equipped the economic sector with the high standard of infrastructures which assure that the economic growth can run effectively. Furthermore, Singapore government is control the labour market extensively in terms of regulating the productivity performance, skill formation, wages, industrial relations and the recruitment of foreign workers. Finally, the government regulates macro-economic policy carefully in order to keep inflation low and invest the government’s budget surplus in social and physical infrastructures (Perry, Kong & Yeoh, 1997).
The economic structure of Singapore Developmental state which has been mentioned above, shows that the government provides a careful planning to ensure that they can achieve economic growth effectively. Moreover the government is prepared to enter the post- industrialization phase where the proportion of manufacture industries start to decrease and the service sector industries is growing. To overcome post-industrialization challenges, the government establishes two developmentalist programs. The first is improving the biotechnology sector in
order to generate growth in non-manufacturing sector. To support this policy, government targeted the large multinational companies to invest in biomedical production, offered a wide range of fiscal incentives and subsidies and also trained the human resources (in form of giving the scholarships) to entering this new sector. Secondly, the government offered a work restructuring scheme in order to increase the human resources capability of the ‘lower-end’ working class.
The main objectives was to shift workers from the manufacturing sector to the service sector, such as healthcare, tourism, communication and information (Pereira, 2008). This transformative capacity to overcome the challenges that is faced by Singapore is the one of the reason why developmental state in Singapore is not decline, but then achieves its stable position.
C. Class Relation
It is argue that the developmental state will be devolving if the local capitalist class has achieved their independency of the government financial support and also if there is a lot of social injustice occurs in the society (Pereira, 2008). However, the uniqueness of Singapore developmental state that makes it survive in becoming developmental state is that the government keeps marginalized the domestic capitalists class as well as from the Singapore’s collaboration with multinational companies and GLCs. The state is also able to control the workforce, for example The National Trade Union Congress (NTUC) is controlled and guided by the government. The labour force is not brave enough to go against the state because of the fear of unemployment. In terms of class relations, the developmental state in Singapore was much more powerful than the other social actor in society.
The injustice of welfare is less maintained because the government is able to provide the fruit of economic growth to the society. For example the government provides a public housing program to improve living environment, the government also established the Central Provident Fund (CPF) to provide a social security services in housing, health and education sector. However, the rising
cost of living in Singapore becomes the major social problems in Singapore whereas the low and middle working class is struggle to fulfill their needs through their salaries (Gainsborough, 2009).
The limitation of Singapore developmental state probably is that they make the economic growth as an ends instead of means. This can lead to the greater of the distribution inequality and social injustice. The government needs to pay more attention of the society’s welfare so that they can stabilize the class relation as well as managing conflict.
D. The Relevancy
In the recent years, many scholars have questioned about viability of developmental state notion in the globalization era. Globalization that is dominated by free market requires no state intervention in regulating the market. It is because the free market system is believed to be highly benefit and effective with the nature of competition between enterprises. The role of the state is only to perform a governance function, maintain fair competition between enterprises and assure that there is no monopoly in the market (Woo-Cumings, 1999a). However, after seen the Singapore’s successful in managing economic development along with the political strategies, the idea either that developmental state model has declined or there is no scope for state intervention is incorrect. Singapore has launched the regionalization strategy in order to deal with the globalization process. This strategy is now become a priority objectives of Singapore’s economic policy, in which they promote the investment of public money in regional project, such as Singapore-Vietnam Industrial Park which is located in Ho Chi Minh City. It is intended to encourage the domestic business to internationalize their performance (Perry, Kong
& Yeoh, 1997).
According to Johnson (Johnson, 1999) the developmental state concept is still relevant until now because it is continued to be a practical strategy and lesson learn of the fluid nature of industrial policy. The industrial policy which is contingent,
reflects the stage of economic development and depends on politic and economic situation of the state, makes the state needs to transform its industrial policy progressively. For example, the industrial policy in Singapore in 1980 is focused on the manufacture sector, but now they are focus on improving the service sector (Pereira, 2008).
Moreover, the origin of Singapore developmental state that emerges from the survivalist motif of ‘small size’, vulnerability and extensive planning of economic growth are still be used in various contexts today. Although there is no single way to perform the developmental state, this notion can bring another perspective in creating economic strategies or industrial policies even for the non-developmental state.
CONCLUSION
The Singapore developmental state emerges from several conditions of threat such as politic and economic uncertainty and the limited of natural resources. In its development, instead of declining, Singapore was able to change the policy strategy an orientation (Woo-Cumings, 1999b).
The government succeeds to implement several transformations to ensure the effectiveness of economic growth. It has improved the coordination between the development agencies within the national scale or international scale. Subsequently, the government is able to deliver its vision to the all actor of the development, which is an economic growth. Moreover, the government also attempted to increase the capacity institution of its industrial sector and human resources sector. Finally, the government is able in managing conflict between class with ensuring the social security services, standard of wage and infrastructure facilities. This development progress of the developmental state model can be learned for finding the appropriate model in governing the state.
REFERRENCES
Chang, H-J 2010, ‘How to ‘do’ a developmental state : Political, Organizational, and Human Resource Requirements for the Developmental State’, Constructing a
Democratic Developmental State in South Africa – Potentials and Challenges.
Chang, H-j 1999, ‘The Economic Theory of the Developmental State’, in M Woo-Cumings (ed.), The Developmental State, Cornell University Press, New York, pp. 182- 99.
Gainsborough, M 2009, ‘The (Neglected) Statist Bias and the Developmental State: the case of Singapore and Vietnam’, Third World Quarterly, vol. 30, no. 7, pp. 1317-28.
Hamilton-Hart, N 2000, ‘The Singapore state revisited’, Pacific Review, vol. 13, no. 2, pp.
195-216.
Huff, WG 1995, ‘The Developmental State, Government, and Singapore’s Economic Development since 1960’, WORLD DEVELOPMENT, vol. 23, no. 8, pp. 1421-38.
Johnson, C 1999, ‘The Developmental State : Oddyssey of a concept’, in M Woo-Cumings (ed.), The Developmental State, Cornell University Press, New York, pp. 32-61.
Low, L 2001, ‘The Singapore developmental state in the new economy and polity’, Pacific Review, vol. 14, no. 3, pp. 411-41.
Olds, K & Yeung, HWC 2004, ‘Pathways to global city formation: a view from the developmental city-state of Singapore’, REVIEW OF INTERNATIONAL POLITICAL ECONOMY, vol. 11, no. 3, pp. 489-521.
Pempel, TJ 1999, ‘The Developmental Regime in a Changing World Economy’, in M Woo- Cumings (ed.), The Developmental State, Cornell University Press, New York, pp. 137- 82.
Pereira, AA 2008, ‘Whither the Developmental State? Explaining Singapore’s continued Developmentalism’, Third World Quarterly, vol. 29, no. 6, pp. 1189-203.
Pereira, AA & Tong, CK 2005, ‘Power and Developmental Regimes in Singapore, China and Malaysia’, Global Economic Review, vol.
34, no. 1, pp. 129-44.
Perry, M, Kong, L & Yeoh, BSA 1997, Singapore : a developmental city state / Martin Perry, Lily Kong and Brenda Yeoh, World cities series, Chichester ; New York : Wiley, c1997.
Pinglé, V 1999, Rethinking the developmental state : India’s industry in comparative perspective / by Vibha Pinglé, New York : St.
Martin’s Press, 1999.
Vartiainen, J 1999, ‘ The Economics of Successful State Intervention in Industrial Transformation ‘, in M Woo-Cumings (ed.), The Developmental State, Cornell University Press, New York, pp. 200-30.
Woo-Cumings, M 1999a, The developmental state / edited by Meredith Woo-Cumings, Cornell studies in political economy, Ithaca, N.Y. : Cornell University Press, 1999.
—— 1999b, ‘Introduction : Chalmers Johnson and the Politics of Nationalism and Development’, in M Woo-Cumings (ed.), The Developmental State, Cornell University Press, New York, pp. 1-32.
