Singapore Government Press
Release
Media Relations Division, Ministry of
Information, Communications and the Arts,
MITA Building, 140 Hill Street, 2nd Storey,
Singapore 179369
Tel: 6837-9666
ADDRESS BY MINISTER MENTOR LEE KUAN YEW AT THE ASIAN
STRATEGY AND LEADERSHIP INSTITUTE’S “WORLD ETHICS AND INTEGRITY FORUM 2005” AT
KUALA LUMPUR ON 28 APRIL 2005
Tan Sri Dato’ Seri Ahmad Sarji Abdul Hamid
Ethical Leadership a Competitive
Advantage
Technology and globalisation have
created a more level playing field.
Because goods and services can be manufactured or produced anywhere, this
has reduced the traditional competitive advantages of geographic location,
climate and natural resources. All
countries can harness information technology and air transportation and join the
global trading community in goods and services. It helps to close the gap between
advantaged and disadvantaged countries. But one “X” factor remains a key
differentiator, especially for developing countries, that is ethical leadership.
In the Third World a clean, efficient, rational and predictable government is a
competitive advantage.
When the PAP assumed office in 1959,
it set out to be different from other nationalist parties that led their
people’s anti-colonial struggle, won independence, assumed power but in office
soon enriched themselves. Many
freedom fighters when they become ministers degraded and undermined the
institutions of government that their colonial powers left them. The PAP
resolved not to be softened and weakened by the comforts of office. Our uniform
was white – white shirts, white trousers – for all formal party occasions. This
white symbol of cleanliness has given us a competitive advantage. We did not know at first that it would
allow us to charge a premium. Investments, especially those with long
amortisation, welcome the predictability and openness we offered.
The question is “Can Singapore always
remain clean?”
Corruption eats into any system,
regardless of the philosophy or ideology of the founding father, of the
government, or the location of a country. Even the Communist Party of China and
Communist Party of Vietnam although fired by high ideals, and determined to
clean out the corruption and decadence of existing regimes have become riddled
with corruption after a few decades in power. When they abandoned their Marxist
ideology and central planning, liberalised their economy to encourage the free
market, the percentage, the grease, the kickback, baksheesh, returned in great
force. This had been the custom for generations, deeply entrenched in the
culture of nearly all Asian societies, as indeed it was in all western societies
in the 17th, 18th and 19th
centuries.
In China the rot started with the
Cultural Revolution, nepotism and backstabbing for promotions and perks were
rampant. Later in 1978 when China liberalised and moved to a market economy,
many cadres felt that they had wasted the best years of their lives and
feverishly set out to make up for the time they had lost pursuing unattainable
heroic standards of purity. This was a time when the hotel chamber maid would
run after you to return your discarded toothbrush or disposable
razor.
I had noticed this syndrome, an
insatiable craving for wealth once they abandoned their Marxist ideals, in a
rebound from idealism and self-sacrifice. Many of the leading members of Chinese
middle school students’ union and trade unions’ leaders in Singapore, when they
abandoned communism after Barisan Socialis was defeated, discarded their high-minded, noble
ambitions to sacrifice for the masses and instead went all out to make up for
lost time by getting rich as quickly as possible.
The corruption problem in China is
immense. In his report the Secretary of the CPC Central Commission for
Discipline Inspection, Wu Guanzheng, reporting to the
5th Plenary Session in February 2005 said that the Chinese Communist
Party had disciplined 164,832 party cadres in 2004. 11 officials at provincial
or ministerial level were investigated on charges of corruption. 2,960 officials
at or above county level were under investigation for bribes or misuse of public
funds. 345 procurators and 461 judges were convicted and punished for
graft.
Vietnam has been through the same
syndrome, a decline in morale and ethical standards after their economic
policies failed and they opened up to foreign investments and freed the market.
In the past ten years until the end of 2004, the Ministry of Public Security
reported 9,454 corruption cases of stealing state properties worth US$639
million. This they said was only
the tip of the iceberg.
No political system in any country is
immune from corruption. The US
suffered a string of corporate scandals a few years ago - Enron, WorldCom, Tyco,
Health South, Waste Management. They were massive pilfering and corporate
monies, corruption involving the Chairman and CEO of these high cap companies on
the NY SEC. The Enron case
disclosed the complicity of Arthur Andersen, a world renowned accounting firm in
causing losses in the hundreds of billion of US dollars.
Singapore has been consistently rated
as the most transparent government in Asia by Transparency International based
in Berlin. PERC based in Hong Kong have corroborated this. However do not believe that Singapore
does not have corruption. Corrupt
Practices Investigation Bureau annual reports show just how many cases of
corruption or attempted corruption take place every year, many that have to be
investigated and prosecuted. There were 145 substantial cases last year, 2004
and 175 in 2003. Fortunately they
have not involved the higher echelons of political office holders or civil
service officers.
Singapore had an incipient problem
under the British. But under Chief
Minister Lim Yew Hock (1956-59), some ministers were corrupt and the rot looked
like spreading.
When the present Singapore government
took office in 1959, it had a deep sense of mission to establish a clean and
ethical government. We made ethical
and incorruptible leadership a core issue in our election campaign. It was our counter to the smears of pro
Communist Barisan Socialis
and their unions.
In
office, we directed the Corrupt Practices Investigation Bureau (CPIB), set up by
the British in 1952 to deal with corruption, go for the big takers in the upper
echelons. We also amended the law
to put the burden of proof on the defendant or accused if he/she had more assets
than his income as reported in his income tax returns, from his employment or
business could have given him. He
has to disprove the presumption of guilt that they were gained by corrupt
means.
It is a constant fight to keep the
house clean. As long as the core leadership is clean, any back sliding can be
brought under control and the house cleaned up. What the PAP government cannot
ensure is that if it loses an election, a non-PAP government will remain honest.
Therefore we have installed constitutional safeguards to meet such an
eventuality. We amended the
constitution to have the president popularly elected not by Parliament but by
whole electorate and has a veto power on the spending
of the country’s reserves by the Cabinet. The president now also has the power
to overrule any prime minister who stops or holds up an investigation for
corruption against any of his ministers or senior officials or himself. The
Director of the CPIB (Corrupt Practices Investigation Bureau) has two masters to
back him, the elected prime minister, and if he refuses to move, the elected
president, who can act independently of the elected prime minister, to order
that investigations proceed. The president also has the veto on appointments to
important positions like the Chief Justice, Chief of Defence Force, Commissioner
of Police, the Attorney General, Auditor General and other key positions that
uphold the integrity of the institutions of government. They are key officers,
essential for the government to function without being subverted.
During a PAP government, the two-key
system will guard against any PAP prime minister and Cabinet who overspend for
political ends or a PM unwilling to act against a political colleague. The president then steps in and acts.
If there is a non-PAP government
and prime minister, the Director of the CPIB will be protected by the president
from being subverted or undermined, otherwise the safeguards will not work.
Then if in the next elections a PAP
government were to be returned to office, it can clean up the system
again.
If Singapore has the misfortune to
elect a sharp but crooked group of politicians who can win two elections in a
row, I fear they will be able to get their candidate elected as the successor
president and thereby subvert the constitutional
safeguards.
Corruption is incipient in every
society and must be continuously purged. Once corruption has set in, it is not
possible to wipe it out quickly. To
kill it at one stroke you need a revolution, like when the CCP pushed out a
corrupt and demoralised Nationalist government in October 1949. The old officials and their retinue were
looting before they fled. The
communists conducted widespread executions of officials who did not get
away. They had show trials, with
the masses acting as judges of those whom they accused of having exploited the
farmers or workers. But within two
decades, these zealous revolutionaries themselves became corrupt. It started with the Cultural Revolution
in 1966. Because money could not
buy them any goods, it was rank that they fought for, through corruption to gain
promotions. Once China opened up
and started a free market, many decided that they had wasted their best years
under the slogan of sacrifice for the people and hurried to make up for lost
time. But now that it has become widespread, as in China and Vietnam, to clean
up is an arduous battle.
However when the core leadership is
clean, corruption can be gradually diminished. Both must be prepared to take on the big
ones in the highest echelons of the government. This is most painful to do as I know from
experience.
Wee Toon
Boon was minister of state in the Singapore ministry of the environment in 1975
when he took a free trip to Indonesia for himself and his family members, paid
for by a housing developer. He also
accepted a bungalow worth S$500,000 from this developer. He had been a loyal non-communist trade
union leader and my staunch supporter from the 1950s. It was painful to have him charged,
convicted and sentenced to four years and six months in
jail.
In November 1985 one of Teh Cheang Wan’s (Minister for National Development) old associates
told the CPIB that he had given Teh two cash payments
of S$400,000 each in 1981 and 1982, to allow a development company to retain
part of its land which had been earmarked for compulsory government acquisition,
and to assist the developer in the purchase of state land. Teh denied
receiving the money. He tried to
bargain with the senior assistant director of the CPIB for the case not to be
pursued. The cabinet secretary reported this and said Teh had asked to see me. I told the Cabinet Secretary that I
could not see him until the investigations were over. A week later, on the
morning of 15 December 1986, my security officer reported that Teh had died and left me a letter:
Prime
Minister
I have been feeling very sad and
depressed for the last two weeks. I feel responsible for the occurrence of this
unfortunate incident and I feel I should accept full responsibility. As an
honourable oriental gentleman I feel it is only right that I should pay the
highest penalty for my mistake.
Yours faithfully,
Teh Cheang
Wan
Teh preferred to take his
life rather than face disgrace and ostracism. I never understood why he took
this S$800,000. He was an able and resourceful architect and could have made
many millions honestly in private practice.
Corruption has to be eradicated at
all levels of government. But if
there is corruption at highest levels of a government, the problem can become
intractable. To clean up may
require some key members of the core leadership to be removed. In the case of
communist countries that would lead to a split in the party leadership, a
serious problem. The outcome depends upon whether the top leader is strong
enough to tackle other powerful leaders without a disastrous split in the
political leadership or a rebellion among party stalwarts who support the
offending leader. The fear of a collapse of the government may cause the leader
to hold his hand.
An important factor is the salary of
Ministers and government officials. They have enormous powers to grant or deny
permits that can make or break businesses.
When ministers and senior civil servants are paid salaries that are
derisory compared to those of their counterparts in the private sector,
officials and ministers will be tempted to take gifts. Whether it is policemen, immigration
officers, customs officers or officers in charge of dispensing licences, it is
dangerous to have them grossly underpaid.
Over the last 40 years, Singapore has moved towards paying political and
civil service officers 70-80% of what their equivalents are earning in the
private sector, the formula is based on an average of 6 professions, their
salaried incomes based on the income tax returns. This has enabled ministers and officials
to live according to their station in society without extra sources of illicit
income.
Singapore has to keep fighting
corruption wherever it exists and however difficult it may be politically. The system works because everyone knows
the Singapore government is prepared to act against the most powerful in the
land.
In 1995 Prime Minister Goh Chok Tong ordered an
investigation into purchases of two properties each made by my wife on my behalf
and by my son Lee Hsien Loong, then deputy prime minister. The developer had given them unsolicited
5–7 per cent discounts on these purchases, as he had given to 5–10 per cent of
his buyers at a soft launch to test the market. Because my brother was a non-executive
director of the company, a rumour went around that my son and I had gained an
unfair advantage. The Monetary
Authority of Singapore investigated the matter and reported to Prime Minister
Goh Chok Tong that there was
nothing improper.
Nevertheless I asked the prime
minister to take the matter to Parliament.
In the debate, opposition MPs, including two lawyers, one a leader of the
opposition, said that such discounts were standard marketing practice and was
not improper. This open debate made
it a non-issue in the general elections a year later.
Leaders must be prepared for such
scrutiny to keep the system clean.
We have to keep our own house
clean. No one else can do it for
us.
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