The Singapore model and Bhutan

            a tale with a happy ending 

A malaria-infested, arid, poor island suspended on the Malaca Strait was politically weak and economically down in the early 1960s. When a recently elected political party called for a national referendum on 1 September 1962, seventy percent of the island's population voted in favour of merging the island with another country. The merger, they hoped, would salvage their economy, vivify it, and help people live a decent life.

But the poor, beleaguered island met with other challenges. The federal government of the new country they had joined announced taxes to raise $147 million to address the budget deficits. The island had to arrange 38.8% of the amount, though its population made up only 17% of the country.

The difference between the representatives of the island and the bigger country only widened. The island again became an independent nation on August 9 1965.

Fast forward, from a poor, malaria-infested island with a GDP per capita of less than $500 in the 1960s, Singapore is today one of the world’s richest countries, with a GDP per capita of over $72,000.

 

  

 

Singapore's GDP per capita and growth percentages between 1960 & 2020

The Singapore model

 Today countries in the developing world want to adopt the Singapore model. Or at least get experts from Singapore to help them restructure their policies and practices so that they could achieve decent economic success.

But what exactly led this poor country to become what it is today? It did not chance upon windfalls like oil reserves or diamond mines. Much has been written about Singapore’s success. Prime Minister Lee Kuan Yew, the legendary leader behind the success, has himself written passionately about his country and the rough path to greatness. For now, let's just go for a brought estimate of the model and consider the following three factors:

 

#1. The strategic location of the island that guarantees the control of 40% of trading passes.

 

#2. The friendly policies adopted by the government towards foreign investments.

 

#3. An efficient government.

Let’s look at point #3. Singapore could form a stable government and institutions with a strong rule of law, low corruption, and pro-business policies that attracted MNCs and  foreign investors to the country. Only when the government system is honest and business-friendly can points #2 and #1 have any value. There are other countries in Singapore’s neighbourhood (Malaysia, for example) not as successful as Singapore but equally endowed in terms of geographical location. Ships sail at the ports held by Singapore because they have good business there – and not necessarily vice versa. Also, business-friendly policies alone do not ensure as resounding an economic success as Singapore’s.

Singapore’s success brings up a question about government forms. Is democracy a prerequisite for development? Not necessarily so. With strong central control, zero tolerance for dissent, and a harsh crackdown on corruption, Singapore didn’t allow laxity and democratic amorphousness to flourish. We could say Singapore was Semi-autocratic. Studies also tend to support it is often the benevolent dictators that lead their countries to success. China's Deng Xiaoping, Chile's General Pinochet (unfortunately not benevolent) and, may we say, Bangladesh's Sheikh Hasina are some examples of iron-fisted rulers who led their countries to some economic success.

Developing countries might look at this reassuringly because they may fulfil some of the criteria. Bhutan, for example: It has an efficient and stable government system and institutional mechanisms to curb corruption. Location is a bit of a problem, but the vast Indian market and the possibility of opening to Chinese markets compensate for the disadvantage of the location a good bit. Hydropower development, for example, is possible because of the energy-hungry Indian market.

Indeed, Bhutan remains inspired by Singapore’s resounding success and looks up to it. It has tried to incorporate Singapore’s style, its methods of public service delivery, and a host of other things.

The ongoing reforms are a testament to Bhutan’s earnest pursual of the Singaporean model in Bhutan. Sweeping reforms are carried out in the public, corporate, and education sectors to restructure and recast them for efficiency.

The reforms are a no-nonsense business. The civil service which occasionally comes under sharp public tongue for being corruptive, lax, unethical, inefficient, highhanded, detached from reality, self-serving, self-preserving, regressive, retrograde, status quoist, risk-averse, compartmentalised, money-driven, stratified, inaccessible, unsympathetic, highly unnecessarily bureaucratised, and even politicized was in for a shocker when several dozen top bureaucrats including directors and secretaries were “managed out” (read fired) because, on being tested, they lacked the minimum competence and vision that their positions required.

What did this achieve? Of course, underperformers were asked to vacate for the competent ones. Some good performers might have been wrongly laid off. But when you wash rice, some grains will exit the bowl with the chaff and water. That is inevitable even in so simple a task as cooking, let alone in nation-building. More importantly, the good ones are more focused on their job if they have not already left, that is. Many left after the reforms. Whether it was because of reform is debatable. But leave, they did. Dasho Zala’s mediocre friend became a politician. Another friend is in Australia. A professor with the distinction of having taught the Ivies and top schools around the world who also happens to intimately know Bhutan’s public service and governance by the virtue of being a scholar of public administration and governance told Dasho Zala he can only explain the Australia rush as "moral panic". Maybe LKY would approve of the reforms.

We couldn’t afford to be wrong. Singaporeans were consulted, hired, listened to. They advised the assessment of the bureaucrats. Their involvement lent authority and a touch of the ‘knowing’ to the whole process. There was little resistance. Those that were laid off packed their bags and gracefully accepted the disgrace. It was at a time when the covid-19 pandemic and strict protocols had stalled economic life and prospects of alternative employment outside public service were nearly zero. Yet people rose above personal goals and left. That is the kind of commitment we have this time.

The reform continues. Recently, two important colleges of the Royal University of Bhutan—the Gaeddu College of Business Studies and the College of Science and Technology—received new leaders. These leaders are young Singaporeans from the business world. One of the presidents with roles in both the engineering college and the business school is a 35-year-old start-up entrepreneur who, as per his LinkedIn profile, received his Bachelor of Accounting and Finance from the University of London in 2013. Some Bhutanese on social media, mostly going incognito, questioned their unmistakable youth. But this time it’s the Singaporeans leading the way. Why, surely some of Lee Kuan Yew’s greatness might have rubbed off on these young people!

We really want them to touch what we are doing. Sort of anoint our reform with their hands blessed by the virtue of being Mr LKY's citizens. Two of the members of the pay commission formed last year were Singaporeans. The pay commission is a constitutional body “headed by a chairperson, which shall be autonomous and shall be constituted, from time to time, on the recommendation of the Prime Minister”. The commission “shall recommend to the Government revisions in the structure of the salary, allowances, benefits, and other emoluments of the Royal Civil Service, the judiciary, the members of Parliament and Local Governments, the holders and the members of constitutional offices and all other public servants with due regard to the economy of the Kingdom and other provisions of this Constitution.” Because the commission is a constitutional body, netizens, again under the burka of anonymity, questioned the constitutionality of having foreigners as members. That was bollocks of course. Constitution doesn’t say who can and cannot be the members. When it doesn’t say anything like that, we might do well roping in a few Singaporeans.

This time Bhutan is doing it differently. Adopting the Singaporean model with Singaporeans to sort out and vivify our system.

Some in Bhutan say this model isn’t necessarily Singaporean.

Do they have reason to say this? Maybe, but they haven't advanced the reasons yet. As people are leaving the civil service, the corporate world, and academia and joining what the Bhutanese editor Tezing Lamsang called the “Australia rush”, some people are saying Bhutan tried to fix what wasn't broken and, in the process, broke it. Might this rush cripple workforce supply in Bhutan? What about when experts are leaving from public health, medicine, education, science and technology, and domain experts in various specialised public sectors?

Will this impact Bhutan’s dream of being an economic success?

 I am not sure. But I am certain when a lot of skilled people move out of the country, it will deprive Bhutan of one thing that was critical to Singapore’s success – skilled people.

Lee Kuan Yew knew one more thing than the three points we discussed above. Attracting foreign business and investment, he knew, was possible only if Singapore had the type of people these foreign companies would want to employ. If an American company could not depend on Singaporean employees and had to bring its own pool of employees from the States or India, it would mean quite a silly economic decision on the company’s part. So, LKY knew, people must have proper education and they must possess the technical knowledge that employers look for. And most importantly, they must work in the country.

“A society to be successful must maintain a balance between nurturing excellence and encouraging the average to improve.”

― LKY, The Wit, and Wisdom of Lee Kuan Yew

In Bhutan, our education system is weak. Dasho Zala knows that. Especially, we are unfathomably lacking in STEM. Now the Singaporeans have the task to achieve. They would have to create a competent workforce through enhanced, revolutionised education in the university colleges they lead. Now they already lead three key colleges (College of Science and Technology and Gaeddu College of Business, and the Gyalpozhing College of Information Technology led by a Singaporean lady) that are invariably connected to Bhutan’s economic vision for the 21st century: Information and Technology, digital transformation, FinTech, etc.

The Bhutanese are a viscerally proud, self-respecting, honour-driven stock of the Himalayas. When such persons suppress the qualities and give way to changes, accepting pchilipa kids as their bosses and good disruptors to the old system, Dasho Zala knows it is for the greater good, for economic success, for the good of people who are coming and are yet to come. 

Any failure to deliver will be harshly judged by history.