Wrong to credit Singapore’s transformation to Lee Kuan Yew

I refer to the 18 Mar 2013 Straits Times report of your video presentation to the Australian Mines and Metals Association during which you urged Australia to learn from the successful economic policies of Lee Kuan Yew, who transformed Singapore [1]. That is a grave misunderstanding of the truth behind Singapore’s transformation. The successful economic policies that transformed Singapore belong to Dr Albert Winsemius, the Dutch economist sent by the United Nations in 1960 to help Singapore industrialise. It was Dr Winsemius who came up with Singapore’s economic plan which Singapore judiciously followed. Many reliable sources confirm Dr Winsemius as the rightful transformer of Singapore:

• He was Singapore’s trusted guide through economically uncharted waters for 25 years from 1960. Through him, Singapore borrowed ideas and strategies that worked for Netherlands and other developed nations. Singapore’s economy is flying high today, thanks in large measure to his sound advice and patient counsel. He is the Father of Jurong, the Dutchman behind Singapore Incorporated. Dr Winsemius was a special person for he had changed Singapore to what it is today. For Singaporeans today, a huge debt of gratitude is owed to the Dutch economist [2].

• He was behind the 10-year development plan that saw the island state transform into today’s high technology, high value added industrial hub [3].

• Singapore’s economic miracle owes something to Dutch economist Dr Albert Winsemius. Dr Albert Winsemius was not merely a consultant, he was someone who revolutionalised and set Singapore’s economy in the right direction [4].

• Dr Winsemius of the Netherlands and Mr I.F. Tang of China were two foreign friends of Singapore who made extraordinary contributions to the economic development of Singapore. They came to Singapore as the leader and secretary of the first UN Industrialisation Survey Team in 1961 [5].

• Goh Keng Swee and Dr Albert Winsemius are generally regarded as the brains behind the coherent export/foreign investment oriented policies that Singapore has followed [6].

• A year after his first visit to Singapore, he presented a 10-year economic development plan. Winsemius also advised the government about large scale housing projects in Singapore and managed to get Philips, Shell and Exxon to Singapore [7].

• Albert Winsemius presented a ten-year development plan to turn Singapore from a port dependent on entrepot trade to a manufacturing and industrial centre. Following the Winsemius Report, the Legislative Assembly passed an Act in 1961 to create a statutory board to promote industrialisation and economic development. The EDB came into being … [8]

• The 1960-61 United Nations mission led by Albert Winsemius helped develop a blueprint for Singapore’s industrialisation and development plan and recommended the establishment of EDB [9].

Mr Lee Kuan Yew himself had this to say about Dr Winsemius:

• Singapore and I personally are indebted to him for the time, energy and devotion he gave to Singapore. I learnt much about Western business and businessmen from him … He gave me practical lessons on how European and American companies operated … showed me that Singapore could plug into the global economic system of trade and investments [10]

More importantly, what is not commonly reported was that Lee Kuan Yew at first pursued the wrong policy of import substitution for the Malaysian common market and actively sought to merge Singapore with Malaya to achieve that goal as evidenced below:

• Lee Kuan Yew and the PAP proposed a political union with Malaysia, which would provide a good-sized domestic market for an industrial strategy of import substitution. Expulsion from the union with Malaysia in 1965, on political grounds by the government in Kuala Lumpur, destroyed the import-substitution strategy [11]

• During the federation period and immediately afterward, Lee’s government initially pursued an import substitution strategy … but the alienation from Malaysia, with its much larger market, rendered the strategy impractical [12].

• Until 1965, the economic strategy of the country hinged on a merger with Malaya to establish the larger domestic market, deemed necessary for economic viability [13].

• Singapore at first adopted the industrialisation policy of import substitution, followed after 1966 by the export of labour intensive manufactured goods [14].

• Singapore’s industrialisation strategy was originally dependent on policies of import substitution within the Malaysian common market, but the attainment of political independence in 1965 led to export industrialisation [15].

• Import substitution was adopted in the early 1960s in anticipation of the Malayan common market. However, Singapore separated from Malaysia in 1965 dashing the hopes of the common market, hence an export strategy was promoted instead [16].

It is commonly acknowledged today that most Third World countries that went the import substitution path ended up worse off than the small handful of East Asian societies that pursued export industrialisation. Thankfully for Singapore, even though Lee Kuan Yew also chose the wrong path of import substitution, we were kicked out of Malaysia in 1965 and hence avoided the pitfall of import substitution. The fact that Lee Kuan Yew actively pursued import substitution through merger with Malaysia while Dr Winsemius didn’t can be seen as follows:

• Lee Kuan Yew, appearing in tears on television when announcing separation, was devastated. His feelings strongly contrasted with scenes in Chinatown where firecrackers were set off to celebrate liberation from rule by Malays from Kuala Lumpur. Most Singaporeans did not share the government’s dismay. Winsemius also did not share Lee’s dismay. He said in a 1981 interview: To my amazement, a discussion had started: can Singapore survive? That is the only time I got angry in Singapore. I said: ‘now you have your hands free – use them!’ It was the best thing that happened during the whole period from 1960 till today [17].

• Dr Winsemius and I.F. Tang in their heart of hearts never believed in a Malaysian Common Market [5].

With Malaysia and import substitution out of the way, Singapore had no other choice but to follow Dr Winsemius’ plans wholeheartedly:

• With Singapore’s secession in 1965, the United Nations Proposed Industrialization Programme for the State of Singapore became the basis for Singapore’s industrialisation strategy [18].

Dr Winsemius didn’t credit Singapore’s success to himself. He had this to say about why he believed in Singapore:

• Singapore has the basic assets for industrialisation. Her greatest asset is the high aptitude of her people to work in manufacturing industries. They can rank among the best factory workers in the world [2].

Ultimately, Singapore succeeded because of Singaporeans.

[1] Straits Times, Follow example of Lee Kuan Yew: Aussie magnate, 18 May 2013

[2] Straits Times, Dr Albert Winsemius Singapore’s trusted guide, 7 Dec 1996

[3] Straits Times, He Believed in Singapore’s Future, 7 Dec 1996

[4] Tactical Globalization: Learning from the Singapore Experiment, Aaron Kon, page 170

[5] A Mandarin and the Making of Public Policy: Reflections, Tong Dow Ngiam, page 66

[6] Multinationals and the Growth of the Singapore Economy, Hafiz Mirza, page 77