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National Observer Home > No. 48 - Autumn 2001 > Book Reviews

From Third World to First: The Singapore Story 1965-2000

by Lee Kwan Yew  

New York, Harper Collins, 2000, pages 691 and index.

Lee Kwan Yew is by general agreement one of the ablest statesmen of the 20th century. Margaret Thatcher said of him,

"In office, I read and analysed every speech of [Lee's]. He had a way of penetrating the fog of propaganda and expressing with unique clarity the issues of our times and the way to tackle them. He was never wrong."

At the age of thirty-five, Lee became the Prime Minister of the self-governing state of Singapore, within the Federation of Malaysia. In August 1965 Singapore ceased to be part of the Federation, and Lee found himself in charge of a small independent nation, with a population of some two million. He was faced with the departure of the British from the region: "The British had enforced their will with a certain civility. The Americans were different." Amongst other difficulties he had that of the economy, with unemployment at 14 per cent and rising. He concluded, "We had to make extraordinary efforts to become a tightly-knit rugged and adaptable people who could do things better and cheaper than our neighbours."

At first protectionist policies were adopted, for locally assembled cars, refrigerators, air conditioners, television sets and similar products. This course demonstrated Lee's practicality. When, later, it suited him, he was a trenchant adherent of free trade, whereas earlier, when protectionism suited him, he was a protectionist: "We had one simple guiding principle for survival, that Singapore had to be more rugged, better organised and more efficient than others in the region."

Through the enthusiasm and diligence of Singapore's entrepreneurs and workers many large companies, including especially United States companies, were attracted and made substantial investments. Whenever problems arose Lee and his lieutenants were on hand to provide solutions and overcome any difficulties: flexibility and practicality were the order. Unemployment fell, and protective tariffs were removed or reduced. For example, by the 1990s, with a total refining capacity of 1.2 million barrels per day, Singapore had become the world's third largest oil-refining centre after Houston and Rotterdam, and it developed so as to become, not merely a leading manufacture centre, but a leading financial centre also.

Under Lee, Singapore adopted enlightened taxation and saving policies, from which much could be learned by Australia (although Mr. Peter Costello's capacity to learn appears somewhat limited):

"The top marginal rate for individuals was reduced from 55 per cent in 1965 to 28 per cent in 1996. The corporate tax rate of 40 per cent was reduced to 26 per cent in the same period. Singapore has no capital gains tax. Our G.S.T. (goods and services tax, the equivalent of V.A.T.) is 3 per cent. Our import tax is about 0.4 per cent."

The concept of successful pragmatism was applied also to death duties:

"In 1984, we cut estate duty from a maximum of 60 per cent to between 5 per cent and 10 per cent, depending on the value of the estate. We collected more revenue, as the wealthy no longer found it worthwhile to avoid the estate duty."

Lee describes the manner in which communist forces in Singapore, who had used their habitual methods of violence and intimidation, had been defeated by government firmness. This included detention without trial for core communists, and it is significant that Lee believed that without this measure a communist insurrection would have been successful. Of course, limitations of this kind, and actions controlling the press and other stringent measures, would not have been allowed in a Western democracy, and important issues arise whether more autocratic Asian methods of government should prevail on a long term basis. In the short term, however, these methods were effective and ensured Singapore's survival.

Lee's critical comments about Australia are of interest: "Australia had high consumption, low competitiveness, high current account deficit, and high debt, with most of its exports in minerals and exports." Lee is critical about Mr. Gough Whitlam, referring to him as a "sham white Afro-Asian", and referring to "the damage Whitlam had done in less than three years by precipitately bringing in the welfarism that has burdened Australian budgets ever since" and to "the excesses of the Whitlam years". Of Mr. Bob Hawke he comments, "Hawke had his heart in the right place and wanted to do the right thing, but every time he took something away from the workers in one sector, he gave it back in subsidies in some other sector."

The Prime Minister whom Lee most respected was Sir Robert Menzies: "Looking back, their prime minister who most impressed me was Bob Menzies"; and "Another impressive Australian leader was Paul Hasluck . . . He was quiet, soft-spoken, observant, well-read and well-briefed . . . He steered Australia's foreign policy with a steady hand and a deft touch . . . His values, stressing the importance of family, education and hard work, were those of the pre-war generation before Australia came to regard itself as `the lucky country'."

"From Third World to First" is an interesting and educative book, well written and entertaining. It should certainly be read by those who are interested in South-East Asia or in the history of the Chinese and Soviet communist governments. An important observation however is that although Lee is clear-sighted and highly intelligent, being of Chinese extraction he remains greatly influenced by Chinese loyalties. He treats communist China somewhat benignly, from the viewpoint of a fellow-Chinese, even though his first loyalties are to Singapore, another albeit small Chinese country. Despite his Oxford degree and his associations with the British, Lee's outlook is practical and Asian, with a dominant emphasis on economic success.

R.M. Pearce



National Observer No. 48 - Autumn 2001