The third chapter of Michael Schuman’s book The Miracle: The Epic Story of Asia’s Quest for Wealth entitled Minister Mentor’s Asian Values discusses the economic success story of the tiny city-state of Singapore. From being a marshland used as a port during the British colonization period, it was transformed into a First World oasis within the Third World region. The chapter tells the narrative of a developed Singapore through the stories of prominent persons involved in the transformation of the former British colony and Malaysian Federation member, to include Lee Kuan Yew, the person primarily responsible for what the country has achieved in its post-colonial history; his college friend and long time alter ego Goh Keng Swee; Albert Winsemius, a Dutch economist who reluctantly went to Singapore with I. F. Tang through the order of the United Nations; and Chan Chin Bock, the United States-based Economic Development Board (EDB) representative who encouraged multinational corporations to invest in Singapore during its industrialization phase.

The article illustrated the creation of Singapore by Lee Kuan Yew out of a probable ideological difference between him and Tunku (Prince) Abdul Rahman about Malayan nationalism. Anxious about the future, Lee sought to formulate a new approach towards economic development of his country. His actions were all based on his vibrant personality: pragmatism which let him encourage capitalism despite his socialist leanings, belief in Asian values that justified the authoritarian form of the Singaporean government in order to stabilize economic growth and promote security, and his despise of the West — at least in the universality of democracy — and communism — the influential ideology in Singapore at that time —  which guided him to devise plans for a government-guided economy based on industrialization.

Of course, Lee Kuan Yew did not singlehandedly converted a colonial port into one of the most lucrative investment hub in Asia. He was assisted two men: Goh Keng Swee, a regular official within the People’s Action Party-dominant Singaporean government, and Albert Winsemius, a then United Nations-based Dutch economist turned economic adviser to Lee. The former believed in the expanded role of the government towards running the economy — more or less the same as those of the East Asian developmental states — through creation and ownership of industries while the latter provided a more market-oriented and practical approach in running the economy of the newly-founded state. Through the ideas of these economists, Lee Kuan Yew created the Economic Development Board that sought to coordinate actions by the various government ministries and aimed to provide mechanisms for a vibrant and dynamic foreign investment climate for the city-state. This has led to the investment of the state in various sectors that led the transformation of Jurong district from a wasteland into a modern industrial hub and the very much publicized economic presentation of Singapore to foreign companies by Goh.

Inspired by Israeli model of development, Lee Kuan Yew aimed to leapfrog the Singaporean economy through industrialization, passing other industries which it would not be successful because of its very limited land area and resources, and export to Western economies. This has been made possible by the flock of multinational corporations, particularly American ones, that are able to pour in the necessary capital, labor, and technology in the city-state through offshoring — an economic practice to reduce cost of production through transferring of operations to countries which provide cheaper economic resources. This has been the achievement of Chan Chin Bock, the EDB representative to the United States. Constantly seeking the audience of expanding companies, Chan has been very instrumental in the preference of American multinational corporations for Singapore, which seems to rival Taiwan at that time as a choice for offshoring. He has made to it that every time a potential investor would look for Singapore as an option for investment the necessary arrangements were already prepared by the EDB, from a very presentable landscape of the office up to the vital infrastructure and facilities needed to immediately start production. This has attracted various American corporations to invest in Singapore, including Texas Instruments and National and Fairchild, the roots of the Singaporean semi-conductor export industry, Philips, who placed in the city-state its machine production hub in Asia, and General Electric, the largest United States-based investor in the country.

The Singaporean case of development is a variant of the East Asian developmental state model. It has the basic elements of state intervention in the economy, utilization of investments in order to jumpstart industries, and a very good timing to develop investment-friendly policies. The difference of the city-state case was that of its clear acceptance of foreign investors to spur the economy, an action that would not be possible for the country because of its limitations. It has also jumped into high-tech industries, utilizing the offshore plans of multinational corporations. This has proved very advantageous to the country that was then insecure of its future but has willing and able leaders that provided the right direction towards development.

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