Thursday, December 4, 2008

In Defense of Singapore

Investing requires some knowledge of international culture, because a truly diversified portfolio contains shares of international companies. Understanding Asian culture is especially important for Americans and Westerners because the spending behavior of Asian citizens, especially the Japanese and Chinese, may determine how long and deep an American recession will be.

One way to understand Asian culture is through the story of Gopalan Nair, who has returned to the Bay Area from Singapore. I wrote about him and the differences between Singaporean and American culture here: Post on Singapore (June 2008)

Here is what happened to Mr. Nair:

After Singapore found the Wall Street Journal to be in contempt of law, a Singaporean government official lambasted the WSJ in its own letters section (Dec. 4, 2008, Chan Heng Chee letter). To its credit, the WSJ printed the letter. A report on the dispute is here:

Professor Tan explains the Singaporean government's position accurately:

PROF KEVIN TAN: The position of the Singapore law is that the media should censor itself to make sure you don't have things which are untruthful, defamatory or contemptuous going out there. I think that is indeed the case. Let us put it another way - if somebody writes a letter which is clearly defamatory of somebody else, the editorial ward of the publication should ensure that letter doesn't get published because if indeed the writer of the letter gets sued for defamation then you become an accessory to this whole defamatory process as well, you see, because defamation requires publication.

As I've said several times, Singapore has created an incredibly successful and diverse state and deserves the benefit of the doubt. There are two issues that ought to be discussed whenever mentioning Singapore's speech restrictions:

1. Singapore experienced racial riots in 1964 shortly before its separation from Malaysia. [Note: the previous sentence has been updated since the original posting.]  Singaporean leaders wisely remember their history and the violence that occurred fewer than 50 years ago. American newspapers almost never mention Singapore's history, which has caused it to place a premium on racial harmony over unfettered free speech. Behind Singapore's speech restrictions is a government that feels it would be negligent if it allowed a repeat of its devastating racial riots. Although Singapore's position is not entirely different from Germany--Germany bans swastikas and other racial symbols and speech because of its own recent violent history--Singapore is singled out for its attempts to maximize racial harmony. France has also ruled that its own citizens, such as Brigitte Bardot, may have their speech limited (see BBC on Bardot). Here's another writer's take:

At the end of the day, Mr. Nair is naive if he believes he can refer to any judge in any country as a "prostitute" and not suffer some consequence. American judges have jailed American citizens and sanctioned lawyers for insults much more benign.

2. The East-West cultural divide is neatly expressed in the WSJ-Singapore dispute. One possible reason for the dispute is that Westerners may not understand how much Asian culture values non-confrontation. In many Asian cultures, for example, it is a sign of immaturity to lose one's temper. In contrast, in Western culture, where individualism is highly valued, confrontation is not seen as immature or even terrible per se. This difference in cultural values has led to many misunderstandings between East and West.

At the end of the day, all Singapore is saying is that it does not want someone to criticize its judiciary with unfounded accusations. In other words, if someone is going to criticize its hardworking judges, that person needs to have evidence to support his or her allegations. That is not an unreasonable request in a country that has ranked consistently in the top five worldwide in transparent government practices and which lacks systemic corruption (See 2007 Report). The United States, in contrast, barely made the top twenty in the international government transparency rankings. Furthermore, the United States, unlike Singapore, has suffered several instances of judicial corruption--see, for example, the Dickie Scruggs matter: Dickie Scruggs, Judicial Corruption.

In addition to its world-renowned transparency, Singapore has other unique factors that make it highly protective of its judicial system. The relatively small size of the Singapore population and its even smaller legal population provides self-enforcing mechanisms for good conduct on all sides. The small legal community means that judges and lawyers interact more with each other, which creates a less adversarial system where lawyers are taught to be facilitators rather than zealous litigators. In a cooperative-style system, if Singaporean judges are going out of their way to work hard, read the papers, and to be fair, and there has been no evidence of corruption, why should they be subject to unfounded, baseless accusations?

From an Eastern perspective, the West's insistence on allowing unfounded accusations to harm peaceful, hardworking people is barbarism. The Western system forces hardworking people to spend time defending themselves against baseless public attacks rather than engage in productive activity. In contrast, Singapore's broad defamation laws create an incentive to work together and to avoid confrontation if possible. It is difficult to find fault with such a system in a country that is transparent, affluent, and diverse. Moreover, when accusations of human rights violations are leveled at Singapore from Americans--whose history includes judicially-sanctioned segregation (Plessy v. Ferguson), judicially-approved slavery (Dred Scott v. Sandford), nuclear weapon use against Asian civilians, far more abject poverty, and a sitting President who approved Guantanamo Bay--it must be especially galling.

From an investment standpoint, if you believe Singapore has a bright future, you can invest there through the iShares MSCI Singapore Index. Its symbol is EWS and according to Yahoo Finance, it offers a yield of approximately 9.00%.

Disclosure: I own shares of EWS.

Update on December 5, 2008: interested readers should check out the "comments" section of this post. One reader posted this link on Francis Seow:

I am not sure what to make of this and need more information, but it's quite troubling.


Mel said...

"At the end of the day, all Singapore is saying is that it does not want someone to criticize its judiciary with unfounded accusations. In other words, if someone is going to criticize its hardworking judges, that person needs to have evidence to support his or her allegations."

But the question is: Is there evidence? Do read the International Bar Association's report on Singapore (focus on the parts regarding its judiciary):

Also read an article by a former Solicitor-General of Singapore, Francis Seow, who fled Singapore after political persecution and is now a University Fellow in Harvard:

The Singapore government will repeat the same rhetoric about how the allegations of judicial bias are "unfounded" or "scurrilous". This might give uninitiated observers the false impression that its critics merely spout unsupported accusations. Don't be fooled by the rhetoric; look at the evidence supporting the accusations and decide for yourself.

Joel Chng said...


I agree with the gist of what you said, but I would like to point out something that i didn't quite agree with:

"The relatively small size of the Singapore population and its even smaller legal population provides self-enforcing mechanisms for good conduct on all sides."

This is reminiscent of the judgment by Justice Lai in AG v. Chee Soon Juan, where she alluded to the size of Singapore as a factor: "To begin with, the geographical size of Singapore renders its courts more susceptible to unjustified attacks."

While our country is indeed small, this itself should not be a factor in determining the reach of contempt, or the efficacy of alternative checks. We are talking about High Court judges here who are public figures, and it is a safe assumption to make that their actions would be heavily scrutinized anyway, regardless of the size of the country. The reach of the internet also renders geographical comparisons meaningless in this regard.