How Singapore could be a model for Brexit

Britain may or may not wish to emulate the city state. The real question is whether it has what it takes

In the debate over Britain’s future after Brexit, the “Singapore model” is often raised, and just as often demonised. In the summer Philip Hammond, the Chancellor, told Le Monde that the UK would not become a low-tax, low regulation nation off the coast of Europe. But why not?

In absolute terms, five million Singaporeans export almost as much every year as 60million Britons, running a trade surplus of 15 per cent compared to a six per cent deficit. Annual income is about 30 per cent higher than in Britain. In the World Economic Forum Global Competitiveness index released last month, Singapore ranked third while the UK sat in a different league, at eighth. Ten years ago, one pound bought more than three Singapore dollars; today, it buys less than two. Is any of this relevant at all? Notwithstanding the vast differences in scale, culture and history and without suggesting that a wholesale transplant of the Singapore template is either feasible or desirable, there are several areas in which the Singapore experience is instructive for a nation in Britain’s position.

The first is customer service. Singapore’s ejection from the federation of Malaysia in 1965 marked an immediate loss of access to that “single market”. In 1971, withdrawal of the British military base (responsible for 20 per cent of employment) left the resource-starved city state in existential economic peril. This led to a survivalist and entrepreneurial approach to nation building.

Singapore was and is aware that its economic lifeline rests on its attractiveness to the outside world. In its pursuit of capital, trade and skills, huge emphasis was placed on top class customer service. At the outset, civil servants made cold calls to CEOS of global multinationals inviting them to move their oil refining or ship repairing or electronics operation, say, to Singapore. Efficient follow-through meant businesses could then be set up within months.

Civil servants played an active role in marketing success stories, creating a bandwagon effect. It is telling that in the Global Competitiveness Index, Singapore ranks first worldwide for public sector performance. A capable, dynamic, retooled and reoriented civil service – unencumbered by legacy and tradition – can be an enormous source of competitive advantage.

The second key point is “the vision thing”. Singapore’s Committee on the Future Economy (CFE) takes stock of trends in technology and global trade to articulate and update the nation’s broad direction of travel. It anticipates and in many ways accelerates disruption to the structure of the economy – seeking not to pick winners but to build capabilities.

The result are programmes like “Skillsfuture” and “Smartnation”, designed to boost employability and digital infrastructure and marketed like a corporate campaign in the private and public sectors. By contrast, policy discourse in the UK revolves around incremental, piecemeal measures for, say, health, education and sometimes police numbers. Where is the national vision?

Above all, however, Singapore is a

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poster child for pragmatism over ideology, outcomes over platitudes. Many of Singapore’s policies do not fit neatly into the traditional boxes of Right and Left. It is an enabling, market-driven economy with a tight public budget, once described by deputy prime minister Tharman Shanmugaratnam as “trampoline, not safety net”.

Yet it has highly interventionist policies in industry, education, retirement savings and housing. Remarkably, about 85 per cent of Singaporeans own and live in public housing. In the future, responsible and nimble policy everywhere will require crossing ideological divides. We will need labour market flexibility and greater support in transitional welfare; more immigration in some areas and less immigration in others.

Of course, Singapore has its shortcomings. However, there is much to admire. The question for Britain is not whether it wishes to become the Singapore of Europe. Rather, it is whether it has the mindset to emulate some of what Singapore does even if it wants to?

Lutfey Siddiqi is adjunct professor at the National University of Singapore and visiting professor at the LSE