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What the US Might Learn From Singapore

In an insightful piece a few weeks ago, NYT columnist Ross Douthat made the case that with regard to health-care policy the US could learn a lot from Singapore. Indeed, many, if not most specialists would agree with Douthat’s contention that the island-nation’s health care system “is the marvel of the wealthy world.” But with regard to Singapore, why stop with its health care policy? Turning to matters economic, for example, even a casual look at the way Singapore approaches the art of policy making and the results they achieve exposes the dearth of both style and substance in what passes as governance in the United States.

One need look no further than the recent release in Singapore of the Report of the Committee on the Future Economy (CFE) and the government’s 2017 budget. The CFE report, released this past February, marked the culmination of a broad based, year-long initiative that convened and genuinely considered the input of representatives from the spectrum of the nation’s relevant constituencies—government, business, labor, academics, professionals, civic organizations, NGOs, etc.—convened by the government to assess Singapore’s current economic position and to propose guidelines on how to address the challenges before the country.

Those challenges were defined, categorized, divided, and assigned to CFE working groups. The final report made seven overarching recommendations with each accompanied by more specific guidelines with respect to policy prescriptions and implementation. The 133-page report is public, but for the purposes of this accounting, the salient points are that, despite the challenges posed by economic globalization, Singapore needs to:  (1) deepen and diversify its international connections; and (2) continually strengthen the  general capabilities and specific skills of its entire labor force, including those who have been hurt or will likely soon be hurt by technological advancements and globalization.

About a month following the publication of the CFE report the government released its 2017 budget (for the fiscal year beginning April 1), which served to punctuate and begin to operationalize the CFE’s recommendations. During the budget debates, Minister of Foreign Affairs Vivian Balakrishnan suggested as much, acknowledging that the budget reflected the government’s decision to “double down on globalization.” Rather than wring their hands over the G word, or worse bury their heads in the sand because of economic competition, policymakers in Singapore chose not only to embrace the world economy and seize the efficiencies arising therefrom, but also to implement policies to help ensure that at-risk members of its labor force would not be left behind through calibrated measures designed to incentivize life-long learning, enhance workers’ skill sets, minimize labor-market mismatches, and provide needed transitional support for workers adversely affected by global competition and labor market disruptions.

By contrast, let’s take a brief look at what passes for “global” economic policy in the US. But for the Libertarian Party, it seems Washington has soured on globalization whilst waving the flag of protectionism. Talk today focuses too little on the pressing need to engage internationally and upping our game to meet the challenge of international competition—and far too much harping on currency manipulation, unfair practices, NTBs, lax regulations, and the like. Thus, the pseudo-populist protectionist policy nostra served up by pols on both the left and the right. Forget about TPP, TTIP, maybe even NAFTA. Border- adjustment import taxes, anyone?

One inescapable, yet largely ignored irony is that in relative terms the US is not a leading “trading” nation, while Singapore is one of the most trade-dependent places on Earth. In 2015, for example, the ratio of exported and imported goods and services to world output as a whole was about 58/100. In the US however, the trade/GDP ratio, according to the World Bank, was about 28/100, whereas in Singapore the ratio was 326/100, the third highest ratio in the world after Hong Kong (401/100) and Luxembourg (391/100).

Singapore and other small trading nations are, of course—or, more accurately perhaps, perforce—dependent on international markets, while huge countries such as the United States are not. But that’s no excuse for US pols and policymakers to fail to take a good, hard look at where we are now and where we are likely to be and to develop policies that put the country on a path that ensures growth, opportunity, and prosperity. Because today, prices everywhere are largely determined by international forces and conditions, rather than domestically, the US has no choice but to deal forthrightly with economic globalization even if its trade ratios are relatively light in comparison. One needn’t adopt Singapore’s policy prescriptions, but the tiny island’s measured and engaged approach is something to be considered because the seriousness with which our policy and opinion makers are now debating and shaping public policy is wholly inadequate to the seriousness of the global challenges before us. 

 

Peter A. Coclanis is Albert R. Newsome Distinguished Professor of History and Director of the Global Research Institute at UNC-Chapel Hill.

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