It’s a little
unsporting of me to throw sand on the delayed national day parade but Singapore
or at least the government of Singapore has a strange relationship with the
concept of size. On one hand we’re very proud of being small. The original
insult of “Red Dot” has something of a badge of pride. We like to talk a lot about
being a little red dot that has managed to do big things.
However, whilst
we like to trumpet the fact that we’re a red dot that does big things, we’re
told by the very people who tell talk about being a red dot that does big
things, that Singapore is too small a place for the locals to ever achieve much.
I remember watching some of Lee Kuan Yew’s interviews before his death in 2015,
where he made a point that Singapore didn’t have the economies of scale to
build things and therefore the best that Singaporeans could ever be was to be
part of a big company from a big country and if they couldn’t make it into a
big company from elsewhere, they could play a role in making that happen for
others by being part of biggest block of them all – the government.
In fairness to
Mr. Lee, his ideas worked brilliantly. Multinational investments brought in by
a competent government helped propel Singapore into the leagues of wealthy
nations. However, there was one key side effect. Whilst Singapore was projecting
itself as a poster child for free-market economics, we were in reality a poster
child for state guided capitalism – so much so that Mr. Lee would proudly tell
the world how Deng Xiaping had paid him a visit and told him that he wished
that all he had to manage was Shanghai. Mr. Lee turned Singapore into an
industrial park were he and his gang would happily allocate our much-trumpeted
human resources to the “multinational” investor.
The problem
with this strategy was the fact that it was successful. Singapore was the odd
ball that made strong central control and central planning a success. The
contrast between Singapore and former communist countries could not be starker.
Countries that were once communist worked hard to break up central controls and
dare I say break up monopolies. Singapore, by contrast, found itself addicted
to central control and the monopolization of certain industries. I think of the
“re-monopolisation” of the media in 2004 as the prime example of our addiction to
monopolies. Both Singapore Press Holdings (SPH) and MediaCorp couldn’t tolerate
losses in their “new units,” and so they cried to the government that Singapore
was too small a market to have competition and the government promptly obliged
them. Both Alan Chan, the then CEO of SPH and Ernest Wong, the then CEO of MediaCorp
patted themselves on the back for saving their respective companies from the “foreign”
concept of competition.
To an extent in
worked. SPH and MediaCorp went back to snipping at each other about prominent
issues like whether viewership or readership was more valuable. Both of them failed
to realise that whilst they had found a way to protect their “god-given” monopoly
profits, they would end up facing competition from a place that they never took
seriously – the internet and small news sites which could get round the rigid
laws that the Singapore government had put in place to protect the monopoly
players. The print version of Straits Times, which had been a money spinner or
the only place that advertisers placed their dollars, no longer became the
staple source of news for many people and the advertisers reacted accordingly.
Our “Big” companies
ran in a similar fashion to conventional militaries. The saying “God is on the
side of big battalions” was paraphrased into “God is on the side with the most
money and best lobbying power.” Our government, which happened to be a major
shareholder in the big companies, saw to it that God would always be on the
side of big companies.
Take the
example of our banking sector, which is officially very strong. Banks like DBS
and OCBC have won all sorts of praise from trade publications for being
financially strong. However, as one of the industry’s most prominent observers,
Emanuel Daniel, notes – that’s because they’ve been protected by the Monetary
Authority of Singapore (MAS) from disruptive competition. Mr. Daniel makes the
point that “Fintech” companies can only serve customers with bank accounts, which
makes the Fintech companies contractors of the banks rather than competitors.
This is not the case in other parts of our region, where FinTechs have been
allowed to compete directly with banks. Mr. Daniel’s blog entry can be found
at:
https://www.emmanueldaniel.com/why-dbs-is-not-the-worlds-best-bank/
Our regulators
remained trapped in the same mindset as, dare I say, our military planners. We are
as a group unable to look beyond wars as being anything other than a series of
battles, where the side with the greater fire power inevitably wins.
It will be
without saying that the lesson that our planners learn from the recent take over
of Afghanistan is that the centre needs to take greater control. People operating
in the field, whether its in a military, security or economic front, will be
brought under the control of the centre.
This would be a
mistake. Say what you like about terrorist groups like Al-Qaeda or the Taliban,
but they have a very effective structure for getting things done with very little
resources. As vile as what they do may be, they have somehow found highly
motivated and dare I say intelligent people who have managed to execute things
with great effect.
Let’s take a
look at the Taliban and their recent take over. The Americans tried to build Afghanistan
on a system of control from the centre in Kabul, whilst ignoring tribal
alliances. Money and other resources were poured into the centre, and somehow
those resources were not shared with the tribal lands. This was precisely where
the Taliban made their inroads. They worked the ground rather than waited for instructions
from some imaginary centre. The results speak for themselves.
World’s Most
Powerful Military made to run away by bearded men in caves – Copyright AP.
The world has
changed. Singaporeans, looking to build a future for themselves, cannot rely on
big blocks with lots of cash from the multinationals or the government. Instead,
they need to work as small decentralized units, coming together to form consortiums
when they need to and acting as small units when they do not need to work
together. Whilst God has shown to be on the side of big battalions or big bank
accounts in head-to-head confrontations, he also shown that in the long run he
favours those who know how to work alliances.
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