Asian Function
Last month, this writer posted an admittedly arcane essay on the death in Belgium of the Ethiopian prime minister, Meles Zenawi, noting the resultant political vacuum in a fragile, unpredictable region of the world, and the threat of instability to the period of remarkable economic growth of the Ethiopian economy. Here's a quick update: last week, the country's ruling party, the EPRDF, appointed Hailemariam Desalegn, as the new prime minister. The power transition was unprecedentedly peaceful, and has raised hope for some easing of the political repression that characterized Zenawi's rule. (Here's a quick comment - don't expect much soon in this regard.) America must be relieved, as Desalegn has stated a clear intention to continue close cooperation with Washington on security matters, particularly in neighboring Somalia and the new state of South Sudan. The important question now is whether Desalegn can consolidate power over numerous political and ethnic factions. Stay tuned.
The Ethiopian essay also noted that the country remains one of the world's poorest - it ranks 212 out of 226 countries on a per capita basis. Today, this writer thought it might be refreshing to take a look at an economy at the other end of the wealth and function spectrum - Singapore - the island-state at the southern tip of the Malaysian peninsula. A quick primer - at 3.5 times the size of Washington D.C., and just over 5 million people, Singapore is the 40th largest economy in the world, but its 5th richest. Since independence from Malaysia in 1965, it has been growing rapidly for decades, alongside other Asian "tigers" such as Japan, Taiwan and South Korea. Given its dearth of natural resources, it established a model of open international trade in services and in goods, the latter conducted through its vast natural seaport (the world's busiest). Capitalism is the byword for conduct. But, at the same time, the government - in an almost 18th century European mercantilist fashion - has intervened actively to, in essence, encourage foreign direct investment (particularly in electronics manufacturing, petroleum refining, and, more recently, pharmaceutical manufacturing). The near-obsessive thrust of this economic policy has been over many years to export. As a result, and in marked contrast to many other developed economies, its international trade and current accounts (and public budget) are all typically strongly positive. The World Bank ranks the country first (out of 183) among the easiest places to conduct business.
There is a downside. This so-called "Singapore Model" of development has been accompanied by what some Westerners might describe as intrusive government presence in virtually every other facet of Singapore society. Thus, for example, education, housing, public conduct, land use, and the media are never out of the sight of bureaucrats. Law and order, as defined by the government, underlies all; penalties for illegal activity - even personal misconduct - are harsh. There is also a clear economic downside - the excessive focus on order has, not surprisingly, begun to stifle productivity. Singapore's Ministry of Manpower is well aware of this trend, and has accordingly established the National Productivity and Continuing Education Council, with the overall goal of generating "smarter" work. Results-driven Singaporeans, it seems, may lack creativity, flexibility, and a comfort level - so key in modern knowledge economies - with the often disorderly process of innovation.
I will write again about Singapore, as I receive "on-the-street" reports from a family member currently residing there.