Should India Embrace Socialism, Singapore Style?

Good governance is a major buzzword in this summer’s mega Indian polls. In fact, Narendra Modi, BJP’s prime ministerial candidate and the bookies’ favourite to become the next PM, has patented a slogan around it that says, “Minimum Government, Maximum Governance.”

Looking around for role models, it will be difficult to find a nation which fits that bill well. The US has seen a major increase in the role of government, even as its economy sputters. In China, not just the government, but the entire Communist Party has its fingers in every pie of national activity. France and Germany have opted to create a supranational structure in the form of the EU, which has created a new set of problems.

However, the tiny city-state of Singapore, ranked No. 1 as far as ease of doing business is concerned, has a higher per capita income than the US or Germany and some remarkable social policies. So it is no wonder that the country gets a mention now and then in such conversations. But its thumbnail size means large countries like India often dismiss its well-earned achievements.

Instead, it might be useful to put that thumbnail under a magnifying glass.

Debt diligence
While it is difficult to outdo the US when it comes to national debt, India has tried its best to land itself in a sorry state of affairs on the debt front. Every year, the annual budget has policy pundits in a tizzy over the huge fiscal deficits incurred by the government, which have a direct impact on the billion-plus population, in terms of inflation.

In stark contrast with India’s $426 billion of external debt, Singapore has no ‘net debt.’ This is because the Singapore government only borrows to develop a market for its securities, but does not borrow to spend on any programme or activity. All expenditure is either made good from government revenues or is backed by national assets, which amply explains why Singapore is globally ranked second in creditworthiness. This is even more commendable when one considers that Singapore has a low tax rate.

One of the reasons Singapore can afford a low tax rate is that it keeps a tight check on all government expenditures, especially expensive subsidies.

So does that mean Singaporeans are left to fend for themselves?

Homing in on priorities
Believe it or not, 90% of the Singapore nationals own their homes and 80% of the people live in public housing, not built by private developers. While a small population makes it easier to execute such policies, Singapore has architected this approach by design and not by accident.

Back in the 1930s, when it was still a British colony, Singapore saw the introduction of public housing schemes. In 1960, the formation of the Housing Development Board (HDB) marked a concerted push by the Singapore government to ensure quality public housing for all its citizens. Its Independence in 1965 did not result into a loss of focus.

Even in India, the concept is not an alien one and government agencies do promote housing schemes. In fact, during the 70’s and the 80’s, when Singapore was witnessing a public housing boom, so was India. But the scenario has changed drastically and private realtors are literally ruling the housing sector in India today. On the other hand, public housing essentially caters to the weaker sections of the society.

In Singapore, public housing not only provides a range of choices, from one-room to five-room flats, but also fulfils an important social construct. The government has set up quotas to ensure that the three main ethnicities – the Chinese, the Malays and the Indians – should have a balanced representation in a housing project in a bid to promote national integration and avoid ghettoisation.

Ignorance is not bliss
India’s broken primary education system is the subject of many a report, but offers a fascinating insight into how a government may appear to be doing something effective to fix a problem, like passing a grandiose Right to Education Act, and can still ignore an actual drop in the quality of education.

Singapore, in contrast, boasts a public school system that has won laurels from independent third parties like the Programme for International Student Assessment (PISA). It should be especially lauded when it comes to cutting-edge approaches, such as teaching students skills like problem-solving. Out of the 172 schools selected from Singapore by PISA for their assessment, only six were private schools, offering yet another data point that the government can do well when it has its priorities clear and the execution is right.

What offers a ray of hope to Indian educators is that Singapore’s education system has also seen its fair share of ups and downs. A detailed McKinsey study states that there were three distinct phases in the evolution of Singapore’s education system – survival driven (1957-1978), efficiency driven (1979-1996) and ability driven (1997-present).

Teachers in Singapore are extremely well compensated and they are even eligible for bonus, depending on their performances. Based on their aptitude, teachers are groomed for leadership and administrative positions as well. So the people in charge of big decisions in the education space take suitable measures on the basis of their knowledge and experience.

In contrast, we have had India’s Human Resources Development minister get into public spats with the administrators of the highly acclaimed IITs. Clearly, India’s huge size as a country cannot be regarded as a relevant factor when sizeable egos seem to be the real sticking point.

As the Little India riots in Singapore so amply showed, all is not well with the country. For a larger country like India, the challenges are, therefore, far more. But it’s now high time to stop using that excuse and get cracking.