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By Susan Long
THERE is no better time than the worst recession in history to 're-examine old business models and beat new paths to the future', says eminent economist Linda Lim.
The last time the economy faltered in 2001, Singapore looked under the hood and started cranking out a slew of Economic Review Committee (ERC) proposals to overhaul society. But the tinkering ground to a halt when good times returned. null
'As soon as Singapore went back to cruising on the financial sector growth bubble, we thought we didn't have to make the changes after all.'
Now that Singapore is stalled by the world's deepest slump yet, it is time to start a national conversation on its identity and values as a nation.
'Before we figure out what kind of growth path we want, we have to figure out who we are, what we want and for whom, and how to get there. This will decide what our unique competitive advantages are, what others cannot do as well as we can, no matter how they try to emulate us,' says the Singaporean professor of strategy at the University of Michigan's Ross School of Business. She was here recently on a regional research sabbatical.
She readily concedes that Singapore's economic growth record to date has been impressive but notes a disturbing 'growth fetishism' here.
Growth is a means but not an end in itself. Focusing on 'how much' growth does not necessarily tell us 'how good' it is, or 'for whom', she says, pointing to a stagnation in median real wage and a decline in low-income wages, despite rapid gross domestic product (GDP) growth here.
But isn't the growing income gap a worldwide phenomenon?
Also, shouldn't Singapore seize all opportunities, not turn away big investors, and capitalise on the boom years to offset the bad ones?
She says: 'One critical difference is that the income divide in other advanced economies is seen as being due to domestic market forces, rather than foreign participation and state policy.
'Certainly, to generate growth, just by adding more input, you can get more output. But what is the opportunity cost? How much did we pay to attract such investment and what else might have been done with the money, tax revenue foregone and other local resources? Because we are a small economy, big, lumpy capital-intensive investments that we do not control also increase our risk and our vulnerability to downturns, rather than protect us from them.'
Ultimately, economic growth, she says, should seek to increase the 'income, welfare, stability and security of all Singaporeans'. 'It should be 'growth for people', not 'people for growth'.
'In the long run, a lower rate of growth which delivers a higher ratio of benefits to Singaporeans may be more desirable than a higher rate of growth which is more unstable and inequitable,' she says.
Long overdue also is a remaking of Singapore's self-image, built upon standing out as a shiny beacon of difference in contrast to the rest of chaotic South-east Asia. 'We like to think of ourselves as a good house in a bad neighbourhood,' she says.
A 2007 survey found that young Singaporeans were the least likely to identify themselves as Asean citizens. Only about one out of four Singaporeans surveyed felt a similarity with their neighbours, the lowest among Asean countries.
But a change in 'spatial dimensions' is required. Singapore must root itself in the region and embrace the neighbourhood, if it hopes to succeed.
'Singapore is part of the region. The region is not New York, London, Shanghai or even Guangzhou. It is South-east Asia. That is how multinationals view us,' she says.
For the last 40 years, Singapore has viewed itself as 'an outpost of Western empire, catering to those scared of the jungle and needing an intermediary'.
'Frankly, no one comes here to go to India or China, no point trying to be a gateway when people can go there directly,' she says.
Instead of trying to be a 'secondary global node', Singapore should focus on being a 'primary regional one' and leverage its 'unique location-specific advantages'.
For example, in this era of 'green business', being situated next to the biggest tropical forests in the world, Singapore is well-placed to participate in resource-based activities from scientific forest and fisheries management to ecobiology, environmental consulting, carbon finance and commodity trading.
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