Globalization in Singapore: Economic Liberalization and Cultural Protectionism
According to Babylon and Beyond, some of the greatest tasks placed upon the state is the revolutionary change in relations, in particular, state relation to external bodies. “ the growing power of non-state forces, the changing nature of economic governance, the reorganization of authority and power relations in world politics, the rise of global multilateral institutions and the de-territorialization of political economies. ” (Wall 2005) Singapore is in fact, a complete model contradiction to this theory. Singapore, as a modern global city-state, despite its liberalised trade barriers is very autonomous in its style of governance.
Singapore has frequently rejected the wishes and impositions of external political bodies and non-governmental organisations and in turn retained much of their politcal Confucian culture and regulations. By this I mean Singapore presents a widely represented democracy, though much of the power is centralized. In wave of multiple attacks from civil rights groups and other such non-governmental insitutions, Singapore has maintained policies of death-penalties, mandatory military and strict morale governance despite it being a trademark of an economically globalized city.
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This in turn is a paradox with its liberal economic rules and strict cultural regulations, contradicting many of the Malthusian theorists which insist nationalism and sovereignty dismantlement accompanies economic globalisation. According to Lechner & Boli, in The Globalization Reader, “Globalization redresses the balance of power in two ways, the most obvious is that it puts limits on governmental control. ” They state that this is advantageous for commerce, as trade and businesses are able to move abroad or across boundaries with relatively little governmental reaction or intervention.
Singapore breaks this mould. The paradox can be brought as evidence against my basic contention about the hollowness of state authority at the end of the century is that it is a western, if not, AngloSaxon Phenomenon and is refuted by the Singaporean experience of the state. Singapore has successfully placed itself in a category labelled significant “Other” in what is to be commonly perceived as a global capitalism and modernity dominated by a Western hegemon (Koh). Is this just another instance of Euro-centrism therefore to assume the declining authority of the state.
Or is Anderson (1983) right in assuming that the nation-state is now little more than an ‘imagined community’ An important concept to our understanding of the Singapore paradox is ‘Globalization’ itself as Globalization is the answer to everything yet nothing. Singapore tops ‘Globalization’ according to The Straits Times (Singapore’s most popular English-written newspaper), which published a report by leading American Political Magazine Foreign Policy ,which calculated countries globalization rank with regards to cross-border flow of goods and services, communications and people.
In his book, the Lexus and the Olive Tree, Thomas Friedman (1999: xvii) depicts the world as ‘being tied together into a single globalized marketplace and village’, driven by ‘the spread of free-market capitalism to almost every country’ (p. 8). This picture of a thoroughly globalized world, is often referred to as a ‘hyperglobalist’ perspective, this perspective has become rather contentious. Those scholars taking issue with the hyperglobalizers, have argued that the extent of globalization has been exaggerated and that, in fact, markets and organizations function more along national and regional lines (Rugman and Verbeke, 2004).
My stance on Globalization, and in particular Globalization in Singapore, leans towards the latter perspective. That although global forces are most definitely active, they may be differentiated as some are more applicable to different countries, and some are acting more intensely and at different rates to others. In Singapore, it appears to me that Globalisation is not in full effect, as theories often include convergence of culture and dismantling of the nation-state.
To me, it appears a process known as Internationalization is taking place, which in economics, has been viewed as a process of increasing involvement of enterprises on a global scale. These processes can be identified by the high levels of Foreign Direct Investment. Foreign direct investment (FDI) can be loosely defined as a company from a host country making a physical investment into building a bureaucracy in another foreign country. In plain English, It is the establishment of an enterprise by a foreign body.
Another ambigious term we meet is ‘culture’ or ‘political culture’. Anthony D. Smith asks “Can we speak of culture in singular unquestionable terms? ” but offers that the most accurate description of culture he could give to be “as a notion or collective mode of life consisting of a repertoire of beliefs, styles, values, symbols”. Truthfully just as important in the case of Singapore, is the term ‘political culture’, as an idea which has remained stubborn and solidified in the face of Globalization.
According to Gabriel A. Almond, in defining political culture theory, we can see political culture as an idea relating to “political attitudes, beliefs, values and emotions in the expansion of political, structural and behavioural phenomena national cohesion, patterns of political cleavage, modes of dealing with political conflict and compliance with authority. ” In this sense, Singapore has been relatively unaffected by an age of ‘Globalization’.
Singapore, as well as other Asian countries have all had strong economic success with governments which have successfully, and autonomously, used the means to restrict and control foreign trade and investment and to allocate credit and guide corporate development in the private sector. (Lechner & Boli) Unfortunately conventional arguments of cultural and ideological protection are more easily applied to sovereign nation-state’s which encompass a relatively linear culture within its boundaries, but Singapore in its population growth and in-migration trends has become a global cosmopolitan city enriched with several different ethnic groups.
Thus, Singapore’s uniqueness ensues from its contradicting ethos on liberalization; from its economic liberalization and synchronization of financial institutions,regulations and policies to cooperate with international standards, to its strict morale conduct imposed on its citizens. To fully understand the paradox of Singapore it is helpful to recognise the success of Singapores economy and also, it is important to recognise and understand the development and transformation Singapore has taken since independence. In the 1950’s, 70% of its population were earning less than 100 US dollars a year and the per capita income around the 200$ mark.
This stressed a need to transfer from an agricultural based industry to a more profitable western form of industrialization. Throughout the 50’s many incremental changes occurred in Singapore but also neighbouring Asian countries. Lechner & Boli recognise four important factors which stimulated development in many of the East-Asian countries. For instance; generous economic and military aid were offered from Western powers, this combined with high domestic savings and relatively low levels of consumption meant that they had funds available for investment.
Secondly, due to strategic reasons, they were exempted from pressures to conform to western forms of liberal democracy, it’s argued that this is a lengthy and costly process and hence would have restricted short-term development. Furthermore, Singapore and its neighbours were allowed, formally then informally, to restrict and limit foreign imports that may have been too large and powerful and hence challenge or bully local enterprises within global or domestic markets.
And lastly, Singapore was given access to large rich US markets for manufactures and through the same markets they could purchase the necessary technology for industrial expansion through the form of patents. From 1970 onwards Singapore adopted a regionalization policy, which was aimed at increasing the development of trade and investment with economies in the region. This was assisted by the setting up of the Association of the Southeast Asian Nations (ASEAN), a bureaucracy established on 8 August 1967 in Bangkok. Much of the declaration focused on plans “To accelerate the economic growth, social progress and cultural development [… To promote active collaboration and mutual assistance on matters of common interest in the economic, social, cultural, technical, scientific and administrative fields[… ] To collaborate more effectively for the greater utilisation of their agriculture and industries, the expansion of their trade, including the study of the problems of international commodity trade” (ASEAN Declaration 1967) Moreover, one of the fundamental principles of the agreement allowed “The right of every State to lead its national existence free from external interference, subversion or coercion”(Treaty of Amity and Cooperation in Southeast Asia (TAC) of 1976).
Singapore has maintained this right in reaction to a liberation of the free market and international interconnectedness of commerce, through its political culture and strict morale values that I will further discuss later. As a result of the afformentioned changes, Singapores economy grew exponentially, from 1970 to 1990 Singapores total trade increased 16 fold, it’s now to be considered one of the most trade-dependant countries in the world, exports exceeding GDP by almost 200% (Acharya 2008).
Furthermore Foreign direct investment increased and currently holds over 90% of total foreign equity investment. Even despite a global recession, Singapore continues to grow economically, as reported by the Singapore Department of Statistics (2011). Showing a 5. 9% total increase in trade in December 2011, a 6. 4% increase in retail sales in November 2011, a 6. 2% increase in GDP at current market prices. (All statistics compared to period in previous year) To further development the government intervened with the introduction of several influential policies.
The Employment Act of 1968, which allowed employers to alter working hours, working conditions, conditions rest days, probation clauses, termination requirements and benefits, and in the end changed employee rights to boost efficiencies. Coupled, with the Industrial Amendments Acts, which took power away from unions to avoid costly and time consuming collective bargaining, these acts allowed companies to expand and hold full- employment.
Furthermore the government offered generous contributions on tax-cuts to financial sector firms who were further attracted by taxation plans and fiscal policy, as well a healthy infrastructure system put in place by the government using funds from the healthy net trade balance resulting from a strong export sector. The arrival of such financial firms marked a turning point in Singapores economy as low-skill low-wage agricultural and manufacturing activities were replaced by high-wage high-skill firms.
This process was furthered by the state, which raised wages and forced out the low-wage factories who were unable to afford the increased salaries. Moreover, the government predicted the profitability of a growing financial sector and hence synchronized their financial institutions, regulations and policies to co-operate with international stadnards. In managing its economy, for good or for bad, Singapore carefully monitors its economic performance and is ready to arrest the first signs of fragility, as it was the case in the spiralling Asian financial crisis in 1997.
Similar action was taken after the September 11 attacks invoked an economic slow-down which Singapore reacted with a belt-tightening of fiscal and financial measures stimulated the economy. Despite the cyclic nature of Singapore’s economy it is important to notice that Singapore’s government has been autonomous and intuitive in its actions to manage and maintain its strong economy. (Koh). This self-stimulation can best be seen in the Central Provident Fund (CPF) which sparked much of the industrialization in Sinngapore.
It’s important to note that Singapore has the worlds highest savings rate. Not because of free market incentives or a national disposition of its people but due to the CPF or in other words, a ‘forced’ savings plan which ensures savings rates closely parallel government dictate (Karagiannis). This program was designed to create a lengthy investment pool after independence from Malaysia, in order to transform Singapore form a colony to an independent economic entity.
The idea was that Singaporeans contributed 15% of his income to the scheme, in return they were a guaranteed 7% profit on the dollar when it was paid back. In effect it was a loan offered to the government but offered as a ‘savings’ scheme. Proceeds from the plan could be borrowed for three expenditures; housing purchases, medical treatments and further education programmes, but most importantly these loans were only available for those willing to contribute. Soon everyone was contributing and a huge financial pool was being created for government investment, which was done so wisely.
The governemnt hired contractors to build housing, in turn they hired local manual workers to work on construction sites, hence stimulating employment, increasing demand, and enabling workers to contribute further to the CPF. The CPF had four important effects on state control. (Karagiannis) Firstly, the fund increased government control of capital, expanding asset base and allowing greater borrowing power. Secondly, These became mandatory policies, this was not a market instrument, this harnessed citizens and controlling spending patterns of the nation.
Furthermore this provided finances for Singapores 5 major investment corporations; Jurong Town Corporation, Singaporean Government Investment Corporation, Port Authority, Temasek Holdings and Sembawang Corporations which allowed them to grow exponentially. Thirdly, the program solved the ‘principal-agent problem’,through the CPF citizens were ‘owners’ of stock of the nation. Workers began to feel that they were part owners for the large companies in which they worked for and hence they acted in a socially desirable manner and held more responsible for the performance of these giant corporations, nd were motivated to work at the highest efficiency. Lastly, Singapore gained external control, on an international level. Increased financial support gained international leverage, hence they were allowed to borrow more from the IMF and augmented their Bargaining portion in terms of oil and heavy capital equipment. (Karagiannis) The CPF also had internal political implications. Government owned housing is used as a social tool because the state can threaten to evict tenants acting in a socially undesirable fashion. (Karragiannis) Hence the population is law-abiding and subservient to the ways of the state.
In this fashion many of the Singaporean citizens see themselves as owing to the state, as opposed to the Western perspective that the state owes its citizens, seen in London riots and Occupy Wall Steer movements to name but a few. Singapores internal political control can also be seen on their stand against corruption through the Corruptive Practice investigation Bureau. High penalties are issued for governmental or corporate corruption, this trust ensures that leadership does not act in a rapacious fashion and leads to high levels of civil obedience and support for centralized power governments.
Singapores zeal for fairness, is best exemplified by the actions taken upon the 5 individuals who released Singapores annual economy projections 5 days prior to the official release. In breaking the Official Secrets Act, they were all fined thousands of US dollars and one received a suspended jail sentence (Karagiannis) Singapore does not allow corporate entities to alter structures or organisation within societies. As Benjamin Disraeli (1804 – 1881), ex British prime minister once said “Individuals may form communities, but it is institutions alone which form nations”.
Hence, Singapore denies the Western perspective assessment that political and economic freedom are necessarily supportive of each other. Censorship has been a another significant form of government intervention, since independence from Malaysia, and has been well-documented in Western media and across opposing NonGovernmental Organisations This has been a trademark of the Confucian Asian values of conservatism and a hallmark of an active government intervening in media and harnessing the political behaviour of citizens.
In fact, Singapore government employs a staff of censors whose job it is to surf the internet ceaselessly looking for objectionable information to block (Lechner & Boli). 2005 was a land-mark year for Singapore and a global level as the economic pact, Comprehensive Economic Cooperation Agreement (CECA), signed between Singapore and India in June set the stage for the city-state’s accelerated involvement in the second fastest growing economy in the world.
Conversely, it has also been a year that saw a police investigation into a political film; the government’s withholding of an entertainment license for a gay party; as in June 2005 Singapore denied Fridea. com, a gay portal, the entertainment license which allows them to hold their annual party. Fridea responded by moving such party to Phuket, though much of the conservative Singaporean population agreed with this expulsion, this marked that Singapore was not a culturally global state.
In the same year, PM Lee announced that a Western model of democracy was not for Singapore. (Amaldas) Furthermore the exclusion of satellite dishes, pornographic magazines, chewing gum, revealing dress-codes and other unwholesome global commodities (Amaldas) strict morale code has been imposed on its citizens. Their mandatory military service policy, use of corporal punishment and death penalty continues despite the protests from Non-Governmental Organisations particularly in relation to civil rights. These are not signs of the idyllic liberal state of Western societies.
On a lesser note, they continue Asian Confucian traditions – removing shoes when entering a private home, conservative in public behaviour, avoid passionate kissing and avoid binge-drinking and the use of narcotics. (Amaldas) Singapore exerts this cultural stuborness to reinforce Asian values and a conservative ‘mode of life’. The irony is seen in the increasingly liberalized economy coupled with the multi-ethnic community representing a throroughly ‘globalized’ region, when Singapore continues to maintain traditional values and political culture.
Much documentation has been placed on the ‘Casino’ debate. For years, Economic pragmatists and conservative moralists and religious groups argued over the decision to legalize gambling. Although the Singaporean government previously believed casinos to have an ill effect on its citizens, on February 15th 2011 the Singapore Sands Casino was unveiled. Rated as the worlds most expensive stand-alone casino with a property value of $8 billion US dollars, containing 2,561 rooms, 500 tables and 1600 slot-machines. They now believe that this has an economic advantage in order to attract tourists.
Some scholars have speculated that, with this movement, Singapore may now be in a position to adopt Western culture. The truth is that Singapore has not allowed the development of casinos as they believe in choice and liberty of citizens to partake in gambling and/or other activities, they do so to boost commercialism. Furthermore, they have placed controls and regulations on Singaorean natives. Foreigners and tourists are able to enter for free, while each native is forced to pay upto 100 US dollars per entry.
Secondly, the government has banished all citizens on state-benefits to partake in any form of gambling. The Singaporean state has attempted to spread a notion of ‘civic nationalism’ – the promotion of pride and nationalism through strong economic growth and provision of material luxuries. The quality of life and luxuries in Singapore is represented in the countries list of accolades; worlds best airport, world-class transport system, the most competitive workforce, the cleanest city and the top rank in Mathematics and Scientific Olympiads.
The government have placed cultural values on such accolades as “system of cultural representation” (Hall 1992) So has these governmental measures been effective in restoring Asian values and a sense of national identity in Singapore? Anthony Giddens (1985) says ‘ by nationalism, I mean a phenomenon that is primarily phsycological, to a set of symbols and beliefs emphasizing a communality among the members of a political order’.
Giddens lists 4 aspects of prime importance of nationalism; the association with the nation-state, the ideological characteristics of the state(related to both class domination and the historicity of modern domination), the phsycological dynamics associated with a set of attitudes and opinions of the state and, lastly, the association with a particular set of symbols relating to the state. The Singaporean state has been hell-bent on maintaining a sense of national pride and belonging to the culture despite the current influx of foreign investment and people which many Westerners believe to offset national culture.
The national imperative slogan of Singpaore is seen in fighting against the displacement of youth in “Go Global, stay local” which can be seen in the local mediascape and ideascape of Singapore. The idea is to “venture forth and find new econmic oppurtunities in the world, yet stay emotionally rooted in Singapore” (Koh) The Singaporean Heartbeat, a program to promote and maintain nationalism among Singaporeans, states that “regardless of where we live and whatever our diverse origins, we must have a strong sense of belonging to this country.
Wherever we might venture, our hearts should be emotionally rooted to Singapore. We should have an instinctive sense of shared values shared history and shared destiny, simply because we are Singaporean. We must embrace a common vision of Singapore as a home always worth returning to and if need be, fighting and dying for” (Singapore 21 Committee, 1999). This quotation unequivocally expresses Singapore’s way to globalization through a culturalist assertion that valorizes traditions and values, and “a production of locality” (Appadurai 1996, p. 78) This sense of nationalism was tested by Sociologist Chiew Seen Kong, who conducted a survey on Singaporean national identity on a random smaple of 900 Singaporeans. his findings found fascinating levels of high national identity. (1969, four years after freedom)
The following represent his findings; 90 % considered themselves Singaporean, 74 % preferred to be called Singaporean rather than Malaysian, Chinese, Taiwanese or any other such ethnicity, 80 % had seen or heard of more than three of Singapores national symbols; national day, national anthem, national flag, the president and the prime minister. 6% were able to correctly name,date or describe these symbols. 64% expressed good feelings towards three or more of these symbols 74% felt willingness to fight and die for the country of Singapore. Dr. Kong’s study showed that despite a converging multi-ethnic demographic, the identity of a Singaporean was still very much alive. To conclude, Brown (2000) states that the manner in which Singapore has acted proves that Globalization is not a plague or an inevitable uncontrollable process but can be controlled and promoted to suit the nation-states wishes depending on the actions of the states institutions.
I further reinforce this view that through state institutions and governmental measures, acts and regulations, Singapore has been triumphant in maintaining a sense of traditional culture and promoting a distinct national identity within its boundaries. Through state-run programs such as the Singaporean Heartbeat and government passed amandments and bans, Singapore has sheltered its national culture from the perceived morally corrupt values and practices of the West.
The experience of the Asian states adds fuel to the claim that a holistic view of Globalization, incorporating political, cultural and economic convergence, is a purely Western induced phenomenon promoted by, primarily, European scholars and pundits. This stresses that in dealing with theories of ‘Globalization’ and its application to particular cases, much more useful are the ideas of ‘regionalization’ and ‘internationalization’ to describe the Asian experience.