Singapore: A historical background

In the 1950s, Lee Kuan Yew formed a political association with the Communist Party of Malaya (CPM) which had been able to amass and maintain a huge following among the working class.

Whereas the CPM, which had been trapped in Maoist and Stalinist opportunist ideas, used the idea of a popular front (association with liberal or progressive bourgeois organisations or individuals) and the two stages theory (struggle for democratic rights first, and after accomplishing this, then struggle for the socialist transformation) to manoeuvre in Singaporean politics.

Chin Peng, the leader of the CPM in his autobiography (Alias Chin Peng) said about Lee’s astounding electoral victory in May, 1959: “I can certainly say that most of the island’s workers sympathised with the left-wing trade unions, and members of these unions well appreciated they were under the control of the CPM. Our supporters, sympathisers and fellow travellers went on to provide Lee’s grassroots electoral support. Without them he would never have achieved his stunning 43-seat victory in the 51 constituencies up for decision at the May 30 polls”.

But in 1963, confident in the consolidation of his power base, Lee prompted the attack on the CPM by launching ‘Operation Cold Store’ which saw a combined force of local and Malayan police conducting an island-wide round-up of alleged communist activists. Moreover, in 1963, when the left-wing Singapore Association of Trade Unions (SATU) led a general strike against the government, the pro-communist trade union organisation was banned and many of its leaders were arrested. Operation Cold Store crushed the CPM underground network throughout the island.

Those events demonstrate that the incorrect political direction and methods of the CPM, in not taking an independent working class road, had been capitalised on by the reactionary leaders in the PAP to wage a vicious attack on working class, left activists and trade unionists.

Trade unions and labour movements

After this Operation Cold Store, the labour movement in Singapore was massively incorporated under the state’s control to fulfil the needs of the ruling class. The non-communist National Trades Union Congress (NTUC), which was formed in 1961 to oppose SATU, was quickly elevated by the PAP as the leading trade union organisation. Ever since, strong personal ties between leaders of the PAP and the NTUC have formed the background of a ‘consensus’ relationship to create the conditions and laissez-faire atmosphere to attract business.

Beginning from 1980, the main NTUC leader has always been offered a minister-without-portfolio in a PAP cabinet. Meanwhile the NTUC reaffirmed its close relationship with the PAP by expelling stewards of NTUC-affiliated unions who had run for Parliament on opposition tickets. The trade unions’ role and structure were also modified. In the 1970s, the NTUC began establishing various cooperatives in the name of providing welfare benefits to its members. With the intention of facilitating better labour-management relations and promote company loyalty, the Trade Union Act was amended in 1982. In order to make factors such as working hours, conditions of service and fringe benefits predictable – and thus make businesses sufficiently attractive for investors – trade unions were barred from negotiating such matters as promotion, transfer, employment, dismissal, retrenchment, and reinstatement.

At present, the NTUC is no more than a ‘puppet’ of the state and the steadily declining union memberships since the late 1970s illustrates its complete ineffectiveness and its bias against workers. Now, only about 19 percent of Singapore’s 2.4 million work-force is represented by the NTUC. The last strike in Singapore was in 1986 when an employees’ union had taken issue with a company for victimising their officials. The NTUC even calls for workers’ wages to be organised in such a way that they can easily be cut whenever a company fails to make profits, such as in a downturn or recession, all under the guise of saving jobs.

The Singapore Government and the NTUC have tried a range of tricks to increase lagging productivity and boost the labour force participation rates of women and older workers. However, when labour shortages persist in the service sector and in many low-skilled jobs in the construction and electronics industries, they make up this shortfall by taking cheaper foreign workers. For instance in 2000, there were about 600,000 foreign workers in Singapore, from Malaysia, Thailand, Indonesia, Sri Lanka, Philippines and other countries constituting 27% of the total work force.

State Capitalism and economic development

Lee Kuan Yew described himself as a socialist in the 1950s and proclaimed that the victory of revolution in China was a great achievement for China and its people. He said at that time, “I have always thought that a Socialist is one who believes that state planning and control would bring about the greatest benefit to the community as a whole”. On the contrary, instead of benefiting the workers and boosting their democratic rights, the man who led Singapore for decades used state control and planning to heighten the capitalists’ profits by suppressing workers’ rights. As prime minister he opportunistically emulated the approach of the bureaucrats in China (under Mao and then Deng) in suppressing the workers’ democracy and trade unions to heighten state capitalism in Singapore. He established a strong paternalistic state to accumulate capital and achieve unnaturally rapid economic development.

In the 1950s, the state introduced a Central Provident Fund (CPF) as a scheme to force employees to save for their retirement through their own and their employers’ compulsory contributions. The CPF, directly managed by the state, has been used by the PAP government as a tool for capital accumulation and its fund has been utilised to finance social and economic developments, as well as for investment. In 1959, for the Housing Development Plan, which was budgeted to cost $871 million (of which $591.4 million was to come from domestic sources), the CPF contributed 80% of the plan’s local capital. Goh Keng Swee, who was Economic Minister at that time, viewed social services and economic development as rivals for the same funding. When it came to a direct choice, he would always choose economic development.

In the early 1960s, the Ministry of Finance took stakes in a variety of local companies in sectors like manufacturing and shipbuilding. Then in 1974 the state established Temasek Holdings to incorporate and manage these stakes and companies. At present, Temasek owns stakes in more than 60 local and foreign companies. In Singapore the companies range from the largest, such as SingTel, Singapore Airlines and Singapore Power, through public icons like the Raffles Hotel and the Singapore Zoological Gardens to the betting company, Singapore Pools. About half of its managed assets are external to Singapore and include stakes in telecommunication companies such as Telekom Malaysia, financial institutions such as PT Bank Danamon in Indonesia and NIB Bank in Pakistan and an extensive global portfolio, such as SingTel’s ownership of Australian Telco Optus. Recently, Temasek Holdings acquired 49% of shares in the controversial Shin Corporation, linked with Thailand’s Prime Minister, Thaksin Shinawatra – a deal which resulted in public outrage and protests in Thailand a few months ago.

Foreign investment

Temasek Holdings is said to have $55 billion dollars in assets and account for 60% of GDP. The government of Singapore has an investment arm called the Government of Singapore Investment Corporation (GIC), which primarily invests the government’s foreign reserves.

Foreign firms are found in almost all sectors of the economy with more than 3,000 Multinational Corporations (MNC) from the US, Japan, the EU and other countries investing in Singapore. MNCs account for more than two-thirds of manufacturing output and direct export sales, although certain service sectors remain dominated by government-linked corporations.

Although Singapore’s strategic location has given the country an economic importance in Southeast Asia, lack of physical resources and a small domestic market has forced the Singapore Government to adopt a pro-business, pro-foreign investment, export-oriented economic policy combined with state-directed investments. It makes the economy extremely vulnerable to regional and global financial changes. The economic slowdown in the US, Japan and the EU, as well as the worldwide electronics slump, reduced economic growth in 2001 to a negative – 2%.

High land and labour costs, caused by shortages of space and people, will, in time, force most manufacturers to flee to cheaper neighboring countries. The rapid growth of the economy, low wages and low production costs in China and India, attract the profit hungry MNCs to relocate their activities to those countries. This could endanger Singapore’s manufacturing and electronic industries which account for more than 40% of its total industrial output.

Because of the increasing volatility and vulnerability of its economy in recent years the Singapore Government has focused its investments in pharmaceuticals and biotechnology which needed advanced technology and a high-skill workforce. Recently it also changed the law prohibiting gambling businesses to allow world renowned casino operators to establish themselves on the island to further boost revenue through tourism.

Singapore is squashed into an area of 683 sq kms (266 sq miles) and desperately short of space not only for its 4.4 million inhabitants but also for investors to enlarge their industries and business activities. It has already expanded by around 10% by reclaiming land from the sea. In an attempt to counter this problem, the Singapore government has established ‘Singapore-cloned mini states’. Among them are Suzhou near Shanghai, China and the Indonesian Islands of Bintan and Batam. Here the Singapore government is exempted from some local regulations and trade tariffs. It has built factories, brought in domestic and multinational firms to occupy them and provided telecommunications links, roads, electricity generators and even pension schemes for their workers. Above all, it installed the “Singaporean operating system” – its trademark high-quality administration.

Singapore’s government hoped to make exorbitant profits from selling and renting property and from charging management fees in its cloned mini-states. But during the 1997 Asian financial crisis, the biggest of them, Suzhou, was hit by fierce competition from a cut-price version that China set up alongside it. As a result of such setbacks, the returns on the ‘clones’ have been paltry considering the money Singapore put into them.

Need for a revolutionary party

In order to discredit socialism, Lee has often declared that he abandoned the idea of a welfare state established in the years following the PAP’s rise to power and in the 1970s, after witnessing the failure of socialism and the welfare state in Britain and seeing the record of achievement in welfare-free and capitalist Hong Kong.

The reforms and nationalisations under the Labour government in Britain in the 1950s – in health, transport, education and other sectors – were achieved through the struggles of the working class and were of great benefit to the population in general. Nevertheless such gains are not guaranteed under capitalism and its free market system. The Labour party at that time was a party of reform and its leaders were operating within the capitalist system. Since the 1990s it has been transformed completely into a right wing party by pro-capitalist leaders to the benefit of the ruling class. The socialist rhetoric that the Labour Party leaders propagated at that time was little different from what the PAP and Lee Kuan Yew used opportunistically for their own political gain in the 1950s.

Since the 1980s, the Conservative and New Labour parties in Britain have consecutively attacked the welfare state gains and benefits. At the present time, the New Labour government under Tony Blair is plundering the National Health Service, the education system, transport system and others for the benefit of the market.

Hong Kong, which Lee Kuan Yew claimed has inspired him as a model for Singapore, has created one of the most polarised societies in the world. There is virtually no social welfare and the cost of education, health care and other costs are rising sharply. The majority of local and migrant workers here earn very little and are extremely oppressed and exploited by the millionaires and tycoons who constitute less than 3% of the population.

The common nature of these governments – whether it is in Britain, Hong Kong or Singapore – is merely to act as a conduit for the ruling class to pursue profit and power, and they have no sympathy or concern for the working class and poor people who create the wealth but live in deplorable conditions under the system.

Stalinism used to scare-monger

Capitalist apologists and right wing governments have been harping on about the collapse of the regimes in the former Soviet Union and Eastern Europe as well as the development towards a capitalist market economy in China and Vietnam in order to discredit the ideas of socialism and the planned economy. The failures and incorrect approaches of many communist parties in the Southeast Asia region, such as the Communist Party of Malaya, which emulated the incorrect methods and approaches of Maoism and Stalinism, have been capitalised on by right wing politicians to create a phobia against socialism.

In fact the Stalinist and Maoist regimes in the former Soviet Union, China and other countries s were not genuinely socialist but a grotesque caricature. Economic planning in these countries took the form of central command from above by bureaucratic ministers and managers, acting on the orders of the privileged ruling class without any control by the working class in whose name the regimes were said to govern. This meant that their collapse was inevitable. It could only have been prevented if the bureaucracy had been overthrown and replaced by genuine workers’ democracy, elected committees at all levels – essential for running an efficient planned economy.

Active socialists world-wide must learn the lessons of their own and other countries’ working class histories. Only in this way can analysis and programmes be drawn up which match the needs of the new era of struggle and lead to victory.

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