Days 4 & 5: Singapore, Inc.

  Day 4 marked our first day of classes on the NUS campus.  Our morning sessions were directed by Nitin Pangarkar.  Nitin has a background in Strategic Management and led an amazing session on the Singapore Economy.  From Nitin's unique perspective as an Indian living in Singapore and teaching at NUS for 17 years, we learned so much about Singapore that we couldn't have if we were still in the US.  We learned how Singapore has gone through the amazing transition from a small fishing village, to a British entrepot, to a manufacturing center, to a financial and transshipment hub of the world.  We learned how this transformation has been fostered and guided through the Singapore government initiatives, policies, and planning.  Singapore Inc. is a term used to express how Singapore defies our deeply ingrained idea of governments as dumb, fat and happy.  The Singapore government runs itself and all its projects as corporations.  As a result, Singaporeans enjoy record GDP growth, one of the highest GDPs per capita in the world, low healthcare costs, low tax rates (especially incremental), a reliable retirement investment program (the CPF), and state of the art government services.  Naturally, this nation looks very different from any other in the world.  Even more amazing is that they chose this path in a time when almost every country surrounding them was adopting communism as a form of government.  I have noticed two interesting tensions since my arrival in Singapore.  First, Singapore somehow manages to be both racially, culturally, and religiously diverse while also giving the sense that is a very westernized country.  It is amazing how many people speak English and also how many parts of the city seem like they could be anywhere in the US.   Secondly, I felt that there is an interesting tension between how much the government has their hands in everything but how, at the same time, they allow different government linked corporations to run themselves as they may as long as they run at a profit.  Government agencies or programs that operate at a loss are eliminated or restructured like they would be in the private sector.  It's really an amazing model and it prompts the question of whether something like this can be replicated on a larger scale and in a different context.

That same day, we went on two company visits, HP and Marina Barrage.

HP, pictured above, was a really neat experience because we were able to see the manufacturing side of Singapore.  Singapore has largely moved away from manufacturing because they have a relatively skilled labor force.  Also, the government has sought to diversify their industries into many high value added- high skill industries so this means that manufacturing has relatively decreased.  We were able to see a desktop and laptop production line.  We toured the facility with our guide, a production manager, who explained the process from receiving customized orders to shipping the finished units to the end consumer.  This plant operates 24 hours a day, 6 days a week.  It was really a sight to behold and unfortunately I can't share pictures of it because we were not allowed to take any due to privacy and confidentiality concerns.  The amount of precision, mastery of logistics, and the depth of technical knowledge that goes into these production lines is astounding.  We watched everything from workers screwing pieces in to testing the software.  I also didn't realize that we, as humans, carry electro-static charges that, over time, can damage computers so all the workers wear special clothes and special shoes to help protect the products.  It was also fascinating to see how HP is able to strategically position themselves in Singapore so they can take advantage of cheap labor from the day workers who travel over from Malaysia while still taking full advantage of the business incentives created by the Singapore government.

At Marina Barrage, we were able to experience the ingenuity of the Singapore government firsthand.  Marina Barrage is a dam built in the bay that creates Singapore's 15th reservoir.  As many of you know, Singapore is a tiny island (about 700 square kilometers) and they have very little natural water.  Singapore has four sources of water: imported, desalinized, captured, and new water (ie treated water).  Marina Barrage serves three functional purposes.  The first is that it captures water that can be used by Singaporean citizens.  Secondly, it helps prevent flooding because the gates of the dam can be opened during low tide to let water escape or a pump house can pump water into the ocean during high tide.  Finally, it is a lifestyle attraction because it serves as a tourist attraction and also as a place for local Singaporeans to relax on the grass above the building and learn about sustainability in the gallery located within.  I think Marina Barrages is truly a beautiful example of the power of the way the Singapore government thinks and operates.  Marina Barrage is an example of how Singapore innovates to create resources in a low resource environment.  Also, Marina Barrage is not only functional but it also educates Singaporeans about sustainability and draws them into the experience as a consumer.  I was also fascinated with the way that Marina Barrage talks about New Water. New water is their word for treated water or recycled water.  Oftentimes, treated water has a stigma surrounding it that makes it less desirable but Singapore markets new water as something wonderful and even preferable.  Just by calling it new water, they manage to disassociate it with the fact that it has already been used.  They are just brillant!  Below are pictures of the Marina Barrage from an aerial view, one part of the Sustainable Singapore gallery, and a demonstration of how the gates work:

If you've managed to stick with me through my first day you can see how much I have learned and experienced in just one day!  I can hardly find the time to update all of you but I take every opportunity I can because I am so amazed by everything we are doing and I feel compelled to share it all with you!  The next day was just as special as the first.  We started the morning with a finance professor who gave a three hour lecture on the financial landscape of Singapore.  We learned all about the Monetary Authority of Singapore (the central bank).  I found this part of the lecture fascinating.  The central bank of Singapore does not separate fiscal and monetary policy like we do in the US.  Also, MAS does not do two key activities that central banks typically do.  MAS does not set interest rates and they do not act as a lender of last resort.  If a bank fails in Singapore, there is no bailout money.  Instead of setting interest rates, Singapore controls foreign exchange rates.  It is a very different philosophy and thus far, they have been very successful.  We also learned a lot about Singapore's debt, equity, and derivatives markets.  Some quick things I found interesting were that Singapore doesn't have to issue any government debt (because they almost always have a surplus) but they do because there needs to be a basis for them to build a corporate debt market off of that.  Also, the Singapore Exchange will soon be the fastest exchange in the world. After learning about Singapore as global financial center, we talked through a case on Singapore Airlines.  Singapore Airlines is a government linked corporation.  It has no domestic routes but flies international routes instead.  SIA is well respected in the industry as an industry leader; they consistently report incredible profits and are recognized for their impeccable service.  SIA is a yet another beautiful example of the entrepreneurial spirit of Singapore, their ability to executive both service and efficiency, and how Singapore looks outside themselves to be successful. 

For all this talk of how wonderful Singapore is, we have to remind ourselves that it's not necessarily better.  There are always trade-offs.  One of those trade-offs I have seen is that the people are not necessarily pleased with the government.  This is a one-party system and people do live in fear of the government's reach, influence, and power.  In fact, Singapore just had a watershed election where the dominant party lost some seats and 40% of the electorate voted for the opposition.  Only time will tell how Singaporeans feel about their economic success story and whether Singapore can sustain that story. 

On the evening of our second class day, we were so lucky as to be hosted by the UVa club of Singapore in an alumni home.  We were able to visit with alumni, current, and prospective students sharing our excitement, experiences, and gratitude for what they do to make this experience possible.  I spoke with some fascinating people who kept encouraging me to make Singapore my home after my schooling.  Who knows???... This place seems too good to be real!

I must dash now because we are off to our next event.  There is much more to tell and please share any news from back home with me via facebook or email.

Love all of you,
Maddy