Singapore at 50 Needs to Relax a Little

All together now.

Photographer: Bryan van der Beek/Getty Images

Singapore is throwing itself a grand 50th-anniversary party this weekend, and it has plenty to celebrate. Its income per capita has grown from roughly $540 in 1965 to more than $55,000 in 2014. That's about the same as the U.S. and on par with the richest countries in Europe. If ever there was an economic miracle, Singapore is it.

Led by the visionary Lee Kuan Yew, the founders of the newly independent city-state had to make a country out of virtually nothing. That was difficult, all right, but the challenge for their successors may be almost as hard -- to take that miracle and recast it for the next half-century.

Pragmatic and nimble leadership has been critical to Singapore's success. State efforts built both the physical infrastructure needed to attract multinational companies and the soft infrastructure -- low taxes, clear rule of law, orderly labor relations and an educated, skilled workforce -- that make Singapore one of the world's best places to do business.

The country's very success, however, has created problems. The rapid buildup in the immigrant population, from 5 percent in 1980 to 29 percent in 2014, has spurred a fierce backlash. Rising living standards have led to plunging fertility rates and longer lifespans: Singapore is now one of the fastest-aging societies in the world. The emphasis on big multinationals and government-linked companies has held back the development of small and middle-sized enterprises. In education, standards are world-class -- except when it comes to creativity and collaboration.

To their credit, Singapore's leaders have acknowledged these issues and have begun to address them. But the government could stand to go further and faster.

Meeting the demographic challenge requires expanded funding for retirement. Rather than simply rewarding young couples for having more children, open more day-care centers and grant more time off for new mothers and fathers. Spending on education should be broadened to include more support in early childhood for disadvantaged youth: Money spent there saves a lot of money later.

Small and medium-sized companies need better access to finance. It would also make sense to consolidate different efforts to help such firms in a single coordinating agency. Recent efforts to spur entrepreneurship seem to be working: Almost one in 10 Singaporeans is now employed in a startup company, and 20 percent of graduates say they hope to start their own business. But Singapore continues to lag behind its peers in innovation. Progress there will require schools that develop initiative and teamwork. 

Singapore's reputation as a repressed nanny state is often exaggerated -- but its timid media and fondness for rules do inhibit the flow of ideas and limit its appeal as a place to live and work. The country should take a chance on lightening up. Look at it this way: Too much of an instinct for the orderly can harm productivity.

The same goes for Singapore's political system, which the ruling People's Action Party has dominated since independence. Pundits expect the government to call an election soon after the celebrations to capitalize on goodwill toward the PAP and Lee Kuan Yew, who died earlier this year. Those feelings are both genuine and largely deserved. After a scare in the last elections, the PAP has tried to be more responsive to voters' concerns. 

Efficient and incorruptible as the government has been, though, it would benefit from a bit more dissent. Critics warn that the civil service is too aligned with its political masters, while the country's pliant media mute the needed debate on policy. They're right: The danger is groupthink, and it's mounting.

After 50 years of ceaseless striving, Singapore can afford to relax just a little. If it wants to keep amazing the world, and to extend its miracle into a new era, it may have to do just that. 

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