For nearly 40 years, the government micromanaged the city state and turned it into one of the economic dynamos of Asia. And ample credit is due: Singapore is an oasis of stability and prosperity in Southeast Asia. But today, government intervention in every facet of society is exacerbating an economic malaise that has both global and domestic causes. State-directed capitalism is losing its luster, and Singaporeans are recognizing the need for risk-taking and entrepreneurship. Moreover, the government has always claimed that a high degree of control over the media and public debate is necessary to maintain law and order. But four decades on, excessive state controls have created a climate of fear and stymied the kind of policy debate and creative thinking essential for competing in a global economy.

Singaporeans are well aware of this. The Economic Review Committee, established in 2001 and chaired by Deputy Prime Minister Lee Hsien Loong, raised high hopes when it promised to "leave no stone unturned" in formulating a new economic blueprint last year. There was disappointment later, however, when Mr. Lee admitted that while he had examined every stone carefully, he had then put many of them right back in their original places.

Nevertheless, the ERC did do valuable work by examining bolder reforms which might be taken up again in the future. These include loosening restrictions on the capital sequestered in the Central Provident Fund. Singaporeans currently are forced by the government to contribute around 36% of their salaries to a state-run retirement fund which earns paltry returns. Although the government does offer Singaporeans occasional opportunities to dip into these funds, for the most part the money sits around in savings accounts. This is unfortunate, as many new businesses could be started with this stock of seed capital.

Ultimately, in the case of CPF, the system was deemed to be "not broken," and thus not worthy of major overhaul. Advocates of tight CPF policy claim that Singaporeans can't be trusted to make the right financial decisions. In today's competitive economy, however, Singaporeans can not afford to be treated like children. Another stone that was carefully "put back" was the ERC's policy on government-linked company divestment. Through its investment arm, Temasek Holdings, the government holds major stakes in almost every business sector. Heavy state ownership in the economy discourages entrepreneurship and stifles the private sector, as private businessmen feel little incentive.

Yet the problems are more than economic, and even the leaders admit that Singapore needs a new way of thinking. The government-backed "Remaking Singapore" committee was set up for this reason. The committee claims to complement the ERC's work of reviewing strategies for a new Singapore. The committee's report explains: "Singaporeans must develop the values, attitudes, skills, innovativeness and entrepreneurship necessary for an increasingly competitive and complex world. . . . If we fail, we risk losing our economic relevance, and our livelihood."

Some critics say that Remaking Singapore is little more than an updated version of the Singapore 21 consultative process of the 1990s. Remaking Singapore does offer hope of culling sacred cows, and some progress has been made. Nevertheless, a recent Straits Times article lists the sacred cows that have returned to graze by the stones that were carefully replaced by the ERC. The real meat of the proposals -- such as changes to defamation laws, increases in freedom of information, liberalization in mass-media ownership and an increased role for media in political discourse -- have yet to materialize.

Many Singaporeans would agree that globalization, technological revolution and an atmosphere of fierce competition means that Singapore needs a spirit of innovation. But it can't do that in a climate of fear. Singapore's atmosphere needs to change in order to introduce real political freedom. For example, the media isn't supposed to participate in politics, but the "out of bounds" markers are unclear, which leads to a veiled legal threat that discourages the media from rocking the boat.

And the public can hardly blame the press for being timid, because even if journalists threw caution to the wind, they would have a pretty hard time finding Singaporeans who are willing to be quoted. In a recent survey published in the Straits Times, only 15% of young Singaporeans surveyed had no qualms about publicly expressing views that differed from the government. Apathy was cited at the main reason, along with fear, although the article stated that "what they feared was not clear."

This ill-defined fear discourages healthy policy and political debate. Singapore's capacity for growth is diminishing, so the government can no longer promote development from the top down and point to this performance for its legitimacy. Nor can the ruling People's Action Party simply tell Singaporeans to "be creative," and expect such a change to happen while society otherwise stays the same. Rather, one prerequisite for creativity is an atmosphere where people aren't afraid to express themselves.

The PAP prides itself on being a democratically elected government, but it hasn't allowed for the growth of a viable opposition. It's true that a majority of Singaporeans support the PAP and would continue to vote to keep it in power. Many Singaporeans feel deeply indebted to their government for the high quality of life that they continue to enjoy. But now may be time for the government to reciprocate that trust. Reform doesn't need to be a zero-sum game: Few would like to see a breakdown in the orderly society that Singapore has worked so hard to achieve. But Singaporeans are undoubtedly capable of deciding important issues for themselves under a government that is more accountable to its citizens.

The ERC and Remaking Singapore show that there are some truly progressive ideas out there -- but what's missing is the impetus to bring them to life. There is a bit of a "if it ain't broke, don't fix it," attitude -- so the system keeps plodding along. Thirty-eight years after independence, many in Singapore seem to understand that change is necessary and inevitable. But they may have to wait a bit longer for a new generation of leaders to take the stage.

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