A culture of benchmarking to the best

SINGAPORE has been ranked Asia's Number One and the world's No 2 in a sustainability ranking study, results of which were released recently. That should be compared with the fact that 70 per cent of Asian cities finished at the bottom. It is another feather in the city-state's cap and a perfect example of how it embraces best practices ahead of others.

The remarkable story of the Republic's leap to a First World nation is, ironically, an oasis in South-east Asia. While the reasons for Singapore's stupendous achievement are well chronicled, what is stopping other regional nations like Indonesia, Malaysia, Vietnam, the Philippines, etc. from reaching such heights? After all, they have watched from close quarters the step-by-step transformation in Singapore. These countries have had all the opportunities to emulate some of the island nation's smart moves over the decades.

The finger always points to the political structure. However, this does not explain the underachievement fully. One party has ruled Malaysia over the past 40-odd years. Indonesia had that for three decades, before a multi-party system took root. Vietnam is still a predominantly communist regime, with some capitalist leanings (modelled on China). The Philippines is the only country that has oscillated from one party to another for many years, without any regime contributing to a quantum change in the country's fortunes.

The oft-repeated fact that Singapore has no natural resources drives our curiosity further. A large domestic market is another boon that Singapore cannot claim to have. The small-land-mass problem is also too well known. So what is the trick that the neighbours have missed? Is it due to lack of good leadership and governance? Or are there other systemic deficiencies that impede substantial progress?

We need to go back to some underlying philosophies that Singapore adopted in the 1960s and '70s - the formative years. For a start, Singapore "benchmarked" itself with the best in the world. Corporate executives are often inspired by best-in-class stories of more successful competitors in the same industry space. The question that arises is: who do you benchmark with - the very best or just a better player?

Singapore chose the former formula. Thus the US, Japan, Australia and Western Europe became the models for Singapore's infrastructure, public services, institutions, and land utilisation. Singapore chased the dream of matching the First World in quality instead of incrementalism. Many of the other South-east Asian nations did not do that; they were happy to make just marginal improvements rather than benchmark with the best. These nations, on the contrary, needed step changes.

Singapore also got the jigsaw of the financial and legal infrastructure right early in its march. The banking system, monetary policies, corporate laws, role of the private sector, taxation principles, rule of law, quick settlement of commercial disputes and all other allied pieces were designed with farsightedness and sophistication. The template for these "soft" enablers of progress came from studying other global models. Surely, some adaptation was necessary. Singapore also embraced the Japanese and German efficiency of execution, even though it inherited the British bureaucracy, sometimes touted as "clever procrastinators".

The regional neighbours have hardly distinguished themselves in any of these areas. They haven't been able to sustain good monetary policies over the years, or provide an effective legal framework that stands the test of international acceptance.

Singapore's adoption of the bilingual education model with primacy for English was another masterstroke that the others failed to deploy. The island state's desire to benchmark the language policy to that practised by economically successful nations like the US, UK, Canada, Australia, etc, is now legendary. What did the regional neighbours do? They have been mostly hitched to the national language, with occasional flirting with English. Vietnam is pushing hard into English education now. The Philippines is reaping some benefits of its English policy in the IT and back-office sectors - still small gains. Isn't it obvious to the other South-east Asian nations that a strong English foundation is a prerequisite for global commerce?

Singapore has had a culture of "excellence" that the others never quite aspired to. This was also borne out from Singapore's obsession to "benchmark" with the very best. More than 40 years ago, Singapore envisioned a world-class airline and put together the building blocks. Singapore Airlines has no peer in the region. The examples of National University of Singapore, Changi Airport, the government hospitals and other semi-government entities bear out this point further.

Singapore realised early that a strong outward push was necessary for participating in due measure in global trade and investment. In this regard, Singapore followed the Japanese example. Japan's post-war, export-led economic recipe brought in unparalleled prosperity for over three decades; it was a compelling prototype for Singapore to emulate.

In contrast, countries like Vietnam, Indonesia and Malaysia were inward-looking for most of their post-independence period. Business thrived based on what came to be known as "crony capitalism", where the country's strengths were not optimised. Individuals - rather than the consumers, the public or the nation - cornered significant benefits.

After pussyfooting for nearly five decades, should we expect these countries to change colour and step on the accelerator or stay in incremental mode? There are no signs yet of any dramatic change in their benchmarking mindset. It's not clear what they're waiting for. A new leader in a new form?

The newest kid on the block, Myanmar, thus has two choices: either follow the Singapore model of transformation, or the lacklustre route taken by the other South-east Asian nations. We must wait and see what happens.