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: http://www.insidebayarea.com/ci_11098813 [Link no longer works, but the following one does: https://www.eastbaytimes.com/2008/11/28/fremont-attorney-released-from-singapore-jail/] 

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:

http://www.radioaustralia.net.au/programguide/stories/200811/s2431123.htm

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:

http://library.thinkquest.org/04oct/00301/project%20thinkquest/pages/p8.html

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 Transparency.org 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 provide 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 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 but my positions may change at any time. I am NOT providing investment advice, nor am I licensed to do so. You are responsible for your own due diligence.

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

http://www.singapore-window.org/1028judi.htm [Link no longer works, but the following one does: https://remembering1987.wordpress.com/whos-who/francis-t-seow-2/] 

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

East and West: Singaporean-American Blogger Sued for Defamation

I lived in Singapore for a little while and loved it, so I took a special interest in today's San Jose Mercury News, which had a story about the Singaporean government suing a blogger for defamation. The blog can be found here:

http://singaporedissident.blogspot.com/

Most of the blog has a sensationalist style, but there are two well-written paragraphs where the blogger successfully articulates his position:

This whole matter boils down to one question. A right to free speech and expression. It appears to me as well as anyone watching this case that what the Singapore authorities are trying to say is this. Do not criticize the Singapore judiciary no matter what. Even if the Singapore judiciary were to say, two and two is ten, the Moon is made of cheese and Christmas Day does not fall on December 25th, we have to keep our mouths shut and go about our business as if nothing happened! What the Singapore authorities are trying to say, if I correctly understand it, is that human beings are disallowed from criticizing the judiciary, period! They are above criticism. They are beyond question. They are invincible. Infallible. They are the best, and need no criticism from mortal human beings! That they are Gods.

I, as a human being cannot understand this to be correct, surely. I was born a Singaporean. I lived my life here in Singapore. I am a former Singapore politician. The welfare of Singapore and Singaporeans should be more my concern than that of Central West Africa! Surely. Criticism is necessary for any organization to improve, to get better. Without criticism, there is stagnation. And with stagnation there is no hope. This has always been the case. What I had done and said was for the welfare of Singapore, a country that I care for and a country in which I have a stake, even if I am now an American.

Whenever someone criticizes Singapore, it is usually from a myopic Western perspective. Most people in Western societies equate democracy and free speech with success or, if they are more condescending, with civilization. But being democratic is no surefire avenue to express the majority's will, as we saw with Al Gore's contested election and as we see now with the current war in Iraq. Also, restricting free speech is not an uncommon tactic--Germany bans swastikas, and France just prosecuted Brigitte Bardot for inciting violence against Muslims. As such, the Western media seems to unfairly single out Singapore without providing appropriate context and its different path of Eastern values, which emphasizes cooperation over independence.

It may seem contradictory for a libertarian to defend Singapore when it sues its own citizens for criticizing the government, but Singapore is a unique country, and its actions must be taken in the context of its size and broad-based economic success. First, Singapore is small and has very few natural resources. Its area consists of about 300 square miles--to give you an idea of how small that is, Rhode Island, the smallest state in the U.S., is about 1500 sq miles. Second, Singapore is very diverse--when I was there, I saw Chinese Buddhists, Israeli Jews, Malaysian Muslims, white Christians, and Indian Hindus. As a result of being diverse, both religiously and ethnically, Singapore takes special care to regulate speech to make all groups feel welcome and to minimize chances of a racial riot (a risk it is particularly sensitive to after its 1964 riots). In short, Singapore needs to project an image of harmony to ensure its status as Southeast Asia's banking hub. In exchange for good behavior, Singapore offers its citizens subsidized housing (HDB flats), safety (no drugs are allowed in the country, and gun-related deaths are rare--for a general overview, see http://ije.oxfordjournals.org/cgi/reprint/27/2/214.pdf), and low unemployment (on 1/30/08, the reported unemployment rate was 1.6%).

In some ways, Singapore seems like the polar opposite of the United States. It does not have a 2nd Amendment, freedom of speech, large land mass, and an adversarial system of checks and balances. But it works. In smaller countries, a government can successfully micromanage its population to create stability. For example, the U.S. government and the Fed Reserve just pumped a lot of money into the American economy, but it is having little effect and will probably cause inflation. In a smaller population, a government can pump in a smaller amount of money into its economy and positively affect its entire population, while avoiding massive inflation due to lower population numbers. In simple terms, Singapore can use very little money to build a few good housing projects and solve homelessness, while America needs to do a lot more and spend a lot more to solve homelessness. In addition, with a smaller population, inflation stops more quickly after benefits or monies are given because the monies are expended in a faster and more predictable fashion, whereas in a larger population, granting extensive benefits may lead to prolonged periods of inflation as the money works its way more slowly and more unpredictably through the economy.

This opportunity to effectively micromanage means that smaller countries can be successfully socialist if most of its citizens cooperate and are willing to delegate. While that sounds hostile to anyone who has read Thomas Jefferson, Singapore's system continues to attract major outside investment while providing a high quality of life to almost all of its citizens. Homelessness, a high prison population, murders, poorly performing schools, and large pockets of unemployment are virtually non-existent in Singapore. Singapore's infrastructure is also better developed than most European countries and most American cities--its MRT system is as good as D.C.'s Metro or Germany's U-Bahn. By most tangible measures, Singapore is one of the most successful countries in the world, if not the most successful.

Thus, given the differences in scale, it is unfair to compare small, cooperative, and cohesive Singapore to large, adversarial, and idealistic America. At the end of the day, there ought to be room for a country that gives its citizens free/subsidized housing, safety, and cheap, delicious food, while minimizing unemployment. These are tangible, quantifiable items that Singapore works hard to bring to its people. To borrow from Walt Whitman, Singapore is not large, and it does not contain multitudes. It offers a simple, direct deal--be cooperative, and you will be safe, not homeless, and live in a stable, diverse and rich country. America's deal is different, and not necessarily a superior deal for all citizens. America is unique because it is vast and tries to live up to very high standards in an adversarial system that prizes independence. When it works, it's wonderful--we get to claim Google, we attract the best and brightest from all over the world, and we have freedom and creativity that lead to timeless films and books. But our system is unpredictable--when it doesn't work, we get Watts Riots, a costly war in Iraq, people imprisioned in Guantanamo Bay for six years without due process, many desperately poor people or people one paycheck away from being homeless, and shootings of innocent citizens, like Vahid Hosseini (San Jose, CA) and Alia Ansari (Fremont, CA). Singapore offers a different flavor for people who like to cooperate and don't mind making some intangible sacrifices.

On a personal note, when I was in Singapore, I felt safer there than here in the United States. Singapore has no history of physical violence or prolonged physical detention against its own citizens or residents. America's government locked up its own residents (Japanese and German internment camps); killed dissidents (the Black Panthers' Fred Hampton and Mark Clark, Kent State); blacklisted "subversives" (McCarthyism); and enslaved minorities. With the exception of suing its "subversives" in court--still an open process--Singapore has no history that requires it to change its cooperative structure. Given its stunning economic success, Singapore should be given the benefit of the doubt, at least for now.