Singapore as a model for economic transformation – case of state planning or markets?

Recently Govt of India invited Singapore PM Tharman Shanmugaratnam for the inaugaral Niti Aayog’s transformation lecture. As expected, much of discussion which followed was around we could use Singapore’s market driven model to drive economic growth.

Prof. Pulapre Balakrishnan disagrees with the narrative.  He says it is Singapore’s history of development is as close to socialistic planning as it can get. This is even more ironic as the lecture was held at Niti Aayog which recently replaced Planning Commission:

An object of this government’s admiration has been revealed to us in the choice of speaker for the firstNITI Aayog Lecture on Transforming India. It chose Tharman Shanmugaratnam, the Deputy Prime Minister of Singapore who was earlier its Finance Minister for close to a decade. A trained economist with considerable international exposure, Mr. Shanmugaratnam typifies the Singapore model, which recognises the value of high human capital in its leadership, something that India has not seen since the time of Jawaharlal Nehru.

Prime Minister Modi is right to have invited this global leader to participate in a brainstorming on how to transform India, thus drawing much-needed attention to the achievements of Singapore. Though its cultural policies may not be to everyone’s taste, the economic transformation that this tiny state has so quickly wrought is most impressive indeed. There is an astounding presence there of public capital in the form of infrastructure, the most egregious of which is public housing which hosts over 80 per cent of the population.

Along with its approach to political freedoms, Singapore’s record is closer to that of socialist planning rather than free-market capitalism. Its government has not hesitated to intervene in the economy but its interventions have been made with a finesse that has yielded substantial returns. It is ironic that a government that had so ceremoniously replaced the Planning Commission must simultaneously seek clues from the history of a country transformed by economic planning.

🙂

Infact it is amazing how certain economies manage to get rid of their past and achieve an opposite image in very quick time. Infact, most people do not understand how US and Singapore were quite the socialist planners in their early transformation history. And now are known as beacons of free markets. Few scholars try to dispel the myth but are ignored.

How economic discourses and thoughts are developed overtime is quite something..

One Response to “Singapore as a model for economic transformation – case of state planning or markets?”

  1. Sanjeev Sabhlok Says:

    Singapore used (and uses) incentives in the most sophisticated manner to ensure accountability.

    Simplistic approaches to Singapore (like this one) will miss the key point.

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