| Can Lee Hsien Loong encourage more risk-taking and promote private enterprise further? | ||||
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Eastern Economic Review August 19, 2004 EDITORIAL THIS WEEK, Singapore finally undergoes its long-awaited leadership transition, as Goh Chok Tong hands over the keys to the prime minister's office to Lee Hsien Loong. Mr Lee takes over at a propitious moment, as Singapore finally recovers from the Asian Crisis, the global dotcom bust and the regional Sars outbreak. But in the years to come, keeping the economy growing at a respectable clip will depend on how Singapore responds to changes in the global economy. This likely will be Mr Lee's main concern as prime minister. Singapore's prosperity has hinged to a large degree on its ability to attract foreign investment. But today, much of such investment is headed elsewhere, especially to China and India. Certainly, as a mature economy Singapore needn't be overly concerned about relatively low-value-added manufacturing plants being built instead in Shanghai, or fiercely competitive and low-margin call centres being set up in Chennai. In fact, even Singapore's large state-linked companies are seeking opportunities in Asia's emerging economies. But at home, Singapore needs to count on itself much more; it needs more home-grown private companies that take more risks, but hold the potential of higher returns than its established companies. A criticism often made is that Singaporeans are risk-averse, that they lack an entrepreneurial spirit. This is unfair. For example, in its market-stall traders and shoplot operators is evidence of a vibrant culture of commercial risk-taking. And like much of the world, the working class appears especially entrepreneurial. But despite some notable exceptions, in Singapore much entrepreneurship also apparently occurs in businesses that are too small to make the desired difference in job creation and in the economy over the long run. For much of the country, the professions and civil service give good job security. Large corporations provide a comfortable life. Multinational companies, a key part of the jobs landscape, provide still more opportunities. Arguably, multinationals also offer an example of how success in one area can become a hindrance elsewhere. One of the qualities that have attracted high-end foreign investment to Singapore is its educated and cosmopolitan workforce, which offers a large pool of workers for senior positions. For some business functions, this makes Singapore a cheaper place to operate in than others parts of Asia. Yet we wonder if a greater opportunity here for middle-class corporate advancement, in addition to what is already available in domestic companies, might not lessen the incentive for a highly qualified population to go punt on their own in what might be high-value private enterprise. Certainly, those who say Singapore lacks risk-takers are wrong. But to broaden the scope of the risk-culture will likely require changes to nudge more Singaporeans along. Is Mr Lee willing to take his government out of its own comfort zone? |
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