5 April 2002

SPEECH BY MR THARMAN SHANMUGARATNAM, SENIOR MINISTER OF STATE (TRADE AND INDUSTRY & EDUCATION) IN PARLIAMENT DEBATE ON THE PRESIDENT'S ADDRESS, 5 APRIL 2002

2. Sir, coming in at the tail end of the debate, I have had the privilege of listening to my colleagues' thoughtful and impassioned views on what Singapore needs to do to go forward and thrive in a more difficult world. I would like to comment on two priorities which stand out in the debate. The first on what we need as individuals and the second what we need as a society.

3. First, Singaporeans have to be more self-reliant, more robust as individuals, less dependent on Government. Many members expressed this need for greater resilience. Mr Seng Han Thong called for a camel spirit, not an ostrich spirit, among third-generation Singaporeans. Dr Ong Seh Hong called for flying dragons, not earthworms.

4. Second, we have to redouble our efforts to stay together as a people. Government has to engage Singaporeans and particularly young Singaporeans more actively, and demonstrate that it is sincere in doing so. But Singaporeans have to themselves take ownership of efforts to build a strong Singapore society, enhance our multiracial compact and carry forward the Singapore Cause that Khaw Boon Wan spoke about.

5. Sir, I agree with the views expressed by many of my colleagues on these two priorities. At the core, we need a new culture, a new spirit, to take Singapore and Singaporeans forward in a new and very different world. We need a culture of rugged, economic individualism. But it has to be a culture that sees value in every citizen, celebrates alternative paths to success, and preserves a deep and abiding sense among all Singaporeans that we share a future together.

6. We have no choice but to go the way of economic individualism. We have to encourage individuals to do well in the marketplace and earn great rewards. We need many more Singaporeans willing to stand out, do things differently, take a risk and occasionally go against the tide. Sir, we need this new culture not only to succeed in throwing up a stronger corps of entrepreneurs, but to develop a more innovative people. It will be what gives us advantage against the competition and enables us to achieve good growth.

7. Sir, this new culture will take time to evolve, but it will have many implications for Singapore society. How do we ensure that those who do well in the market and earn higher incomes will not feel they stand apart from and above the rest? How far should we intervene in the market or seek to moderate the consequences of the market, whether through our fiscal policies, HDB subsidies or a social safety net? These are not trivial questions.

8. Not many societies have succeeded in preserving a true sense of togetherness and cohesion while holding to a spirit of enterprise and economic individualism. In most societies, economic individualism has worked against social cohesion. And policies and attitudes aimed at preserving social cohesion have often worked against a culture of enterprise and economic individualism.

9. The Americans have the most enterprising culture among the advanced countries. In strictly economic terms, they have outperformed the rest. They have been able to do so because more than other societies, Americans accept the free play of market forces. Individuals are more willing to adapt to changes, develop the next product, find the next market or seek the next opportunity. Americans accept as fair that individuals be rewarded in the market for their effort and enterprise. They also also welcome the best and brightest foreigners into their society, give them a place and make them feel at home.

10. The US has a wider inequality of incomes and wealth than most societies. But Americans tolerate inequality, and even regard much of it as fair, because of the reality and perception of social mobility in the US. It is a powerful and popular ethos - that everyone can get ahead if they put in the effort. Contrast this with Europe. Because there is less social mobility in European societies, there is a greater popular demand in Europe for Government to fight inequality than there is in the US.

11. The Americans' non-egalitarian attitude to capitalism, and their greater acceptance of creative destruction in the corporate world, has produced superior economic outcomes. For every NTT DoCoMo or Vivendi, there are many more Wal-Marts, Intels and Microsofts. More important, jobs in the US have grown faster than in any other advanced society over the last two decades. And they have had a faster increase in average productivity and standards of living. It has produced better results for the majority, not just the wealthy.

12. But American society is not cohesive. They rally around magnificently in crisis, as Sept 11 showed, and have a fervent common belief in certain American ideals - but the US is otherwise not a tightly bound society. Wealthy American individuals make large contributions to charity, but it does not change the basic reality of a somewhat disparate society. The affluent and the upwardly mobile live their lives quite separate from the less skilled if they wish, moving out to the suburbs and even out of the cities altogether.

13. The Japanese are most unlike the US in social culture. They shun individualism and place a premium on modesty, group decision-making and on sharing the credit. They succeeded as a people for 40 years, caught up with the West economically, and exceeded the West in some areas. But Japan's system of consensual decision-making and highly egalitarian culture, is now holding it back. The system is geared to avoiding pain, which means avoiding reform. Farmers, construction companies and corporate dinosaurs are a greater influence on government policies than the needs of the overall economy. There is a profound loss of confidence.

14. The Europeans have a more congenial and cohesive culture than the US. They are also learning lessons from the US on how to create an environment for growth. They are cutting taxes, trying to roll back the welfare state, and putting in place US-style capital market discipline. But the differences between Europe and the US lie deeper, in the culture and outlook of individuals on either side of the Atlantic. Unlike the US, the Europeans view the world as a zero sum game - one person's gain is another's loss. And so they seek to preserve the status quo. It is a culture that blocks out newcomers, start-ups and upstarts, those with ideas and innovations that can unseat the incumbent players and generate growth.

15. So although there is great egalitarianism in European culture, and a genuine concern on the part of the successful for those lower down the ladder, the system produces less growth, fewer jobs and higher unemployment. It is an egalitarian culture that does not produce egalitarian outcomes, especially for those without jobs.

16. Mr Speaker, Sir, we have to embrace the market, and accept the inequalities thrown up by the marketplace if we are to succeed in generating growth and creating jobs in our next phase of development. We cannot shrink from this challenge.

17. We are a city state, competing with cities within countries. They are not just cities, but cities that draw the best talent and the most energetic people from across their countries and regions. Cities like London and Zurich within Europe, Shanghai and Guangzhou drawing from China, New York and San Francisco drawing from the world. Over half of New York's residents are either born abroad or children of parents who are both born abroad. Native New Yorkers do not begrudge the presence of foreigners who have settled in the city. They know New York throbs because it attracts talent from around the world in business, the professions and the creative arts.

18. We have to be the hub in Asia for business, small and large, and a mecca for talent. We have to develop Singaporeans of all talents and spur on Singaporeans to succeed. But we have to be aggressive in attracting foreigners with the ideas, skills and connections that can contribute to Singapore's growth and vibrance.

19. We should continue to shift the emphasis of our tax policies from redistribution to growth. We have to move away from the egalitarian approach. We should give greater incentive for anyone with the ability, guts and energy to succeed to go as far as he can. That way we can succeed as a country, and generate more growth and more jobs. It is not a zero sum game. It is not a matter of favouring the rich or the clever, but of favouring a future of better jobs and better incomes for all. If a Singaporean entrepreneur becomes a billionaire, our "Gini coefficient" will "worsen" - we will have greater inequality - but we should be happy as his success will create more jobs and better incomes for others.

20. But the market philosophy that we need for future growth will not be viable in Singapore if we do not work hard on our social compact. We have to overcome the problem that many other societies have faced, where economic freedom has not coexisted well with social cohesion. We can do so, by building on our past strengths, preserving the trust between people and Government, and exercising strong leadership wisely. For the market-based philosophy to work and be accepted, Singaporeans who do very well must engage with and show concern for the rest of Singaporeans.

21. We cannot recreate the environment that threw up the sense of commitment to community that our early pioneers had, or the extraordinary spirit that Singapore's founding generation had in building a new nation. But we will find ways to strengthen civic attachments and a sense of shared purpose among all our citizens. We have to do so through our educational institutions, our community organisations and, as Raymond Lim emphasized, through a more vibrant civil society. And we have to strengthen the heartware of multiracial relations, as Mr Iswaran and Mr Ahmad Khalis spoke on yesterday.

22. Sir, we have to work hard to preserve a sense of mobility in Singapore society, especially through education. Every citizen must know he is getting an equal chance to improve himself and develop his talents. We have to intervene earlier to help children from lower-income groups. We have to raise standards of pre-school education so as to narrow the gaps, as best as we can, at the starting line where children begin their school education. My colleagues, Sir, have spoken also of the importance of providing a 'second chance' to those who do not do well in school. We have to expand the paths to a tertiary education, and providing a full menu of opportunities for life-long learning. We may even have to provide classes for MPs seeking to upgrade from an EM3 standard in Cantonese karaoke.

23. We need more varied heroes in education, who make good regardless of how they started. Like the ITE graduates who make it through polytechnic, some even to a university degree. Or people like Mohamad Saberi Bakar who, not daunted by his indifferent 'O' level grades, decided to catch up in his mid-20s by working hard for a diploma, then an advanced diploma in IT - his study room was Changi Airport's waving gallery - and eventually went on to get his computer science degree. He now works as an engineer. Mr Saberi told The New Paper that he was tired of the "underclass" tag and people suggesting that as a Malay, he would not have opportunities. In his own words, "Everyone has a chance in Singapore. No matter who you are or what your background or race is. It is just a matter of grabbing that chance."

24. But ultimately, Sir, we have to measure success not by whether you get a university degree. Everyone who puts full effort into going as far as he can, and developing the talent he has, is a success. Every ITE graduate who holds down a good job and looks for ways to upgrade his skills every few years is an unqualified success.

25. We inherit an East Asian tradition that reveres scholastic success. We also inherited from an education system that had been geared to producing the intellectual elite in Britain. The combination of East Asian values and the academic bias of the British system was a potent combination, and has shaped attitudes among generations of parents. All that mattered to the British were your 'O's and 'A's, and which university you went to. It is very different from the tradition in several European countries, where students who go through the technical route suffer no stigma. We have changed our system over the years, and built world-class institutions in our polytechnics and ITE. ITE graduates got jobs faster than university and polytechnic graduates last year, and with good starting salaries. But some old social attitudes remain and we have to change them.

26. We have to remove the sense of failure among those who do not make their way all the way up the academic ladder. But we have to avoid going the way the British have since done, of converting polytechnics into universities and creating new degrees - in sports and tourism studies for example - so that more people make it through university. We should be honest and pragmatic in our education agenda. We should recognize different abilities and give them the best chance of flowering. We should avoid lowering standards and giving students a false sense of academic achievement.

27. Sir, we must continue to show compassion to families and individuals who end up in distress through no fault of their own and no lack of effort. But, we should continue to focus this effort at the local level - through the CDCs and CCCs, and through voluntary actions by private organisations and citizens. That way we develop strong local community bonds, and ensure that assistance goes to those who are willing to put in the effort to help themselves. That way we guard against a culture of dependency on the state.

28. Our young must have opportunity to contribute to the community. They have to develop the instinct of wanting to contribute something much larger than themselves. Our schools are providing a range of activities to make this possible, whether through local projects or regional ventures that bring students face-to-face with the realities of life outside Singapore's prosperous, comfortable conditions. The enthusiasm of many of the students is remarkable. One schoolgirl, Liu Xiaojun, 17, borrowed from friends to fund her trip to go to East Timor recently on a humanitarian mission. Her father, a technician, had been retrenched before his trip. Xiaojun has now found a part-time job as a piano teacher to repay her loan.

29. Sir, we need a breed of young Singaporeans with a spirit of inventiveness, and an ability to take failure in stride. More of our young have to be willing to be unorthodox, and take the road less travelled. They must learn to take knocks, be prepared to run into a rut from time to time, know how to get out of it and look for another way to get ahead in life.

30. It will take time to develop a more enterprising spirit in Singapore, a willingness to be different and think differently. But it is not totally absent among our young. The 8 national sailors in junior college, university or early in their careers, who recently decided to put their education or careers on hold to train full time for the Asian Games are an example of this new spirit. One of them, Stanley Tan, a 27 year-old who had completed his Bar examinations has decided to postpone his legal career until after the Athens Olympics. As he put it, "I want to see how far I can go. Frankly I am looking at 30, 40 years of a legal career. Taking some time off is a drop in the ocean." (ST, 27 Mar 02). They are taking time off to do something they can do well in, and something they take passion in doing.

31. Mr Speaker, Sir, we should not try too hard to develop entrepreneurs, or to build an entrepreneurial culture. Entrepreneurs are self-made. But we have to provide more space for our young to develop a free-spiritedness that is lacking in Singapore today, and that is essential for an entrepreneurial society. We should avoid being, as Gan Kim Yong says, a perfectionist society. As the Chinese say, "qin sui wu yu" (clear water has no fish).

32. I agree in spirit with Dr Wang Kai Yuen, Dr Low Seow Chay, Mr Chew Heng Ching and other MPs who felt that the excessive amount of time our students spend in examination preparation is not ideal. It is especially not ideal for our more academically able, who prepare for both their 'O' and 'A's in the space of three years before proceeding for university. It will not prepare them well for the future. It is one of the reasons why the Ministry of Education has embarked on a review of the structure and curriculum for the upper secondary and junior college levels.

33. But there are no easy solutions to the problem of examination pressures in a society whose very strength lies in being meritocratic and achievement-oriented. We do not want to water down standards, or lose the transparency of the assessment system which allows all students to compete on a fair basis for entry into schools or the tertiary institutions. I am sure many of my colleagues in Parliament will join us in thinking through the changes which can be realistically achieved, and which represent real improvement over our current system.

34. Mr Speaker, Sir, we have come this far over 40 years because of extraordinary feats of leadership. We are building a new Singapore on a strong foundation - an aspiring people, a system of multiracialism and meritocracy that still makes us special, a labour movement that favours growth, and good governance, fair and transparent. It has given Singapore a strong brand name in every capital across the world. No one seriously thinks of us as a little red dot.

35. We cannot erode these assets, the core of our social capital. But we need new capabilities to succeed against the competition, and to keep our sense of well-being as a people. These new capabilities will require us to evolve a new, tougher social culture. We can do so. We are a young society, still mobile, without encrusted values and habits, still engaging our future with vigour. We will prevail, and emerge flying dragons.