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

KEYNOTE ADDRESS BY SENIOR MINISTER GOH CHOK TONG OF THE REPUBLIC OF SINGAPORE AT THE JEDDAH ECONOMIC FORUM ON MONDAY, 21  FEBRUARY 2005, AT 1000 HRS (1500 HRS Singapore Time) AT HILTON HALL, JEDDAH HILTON

PEOPLE – A PRECIOUS RENEWABLE RESOURCE

Thank you for the opportunity to address this distinguished audience.

2 I have been asked to speak on “transforming an economy: the expansion of human capacity”.

3 Human resource development is an important topic on which professors and HR experts are more qualified to speak. In today’s world, a nation's competitiveness and fortunes are determined more by the quality of its human resources than the abundance of its natural resources. This is quite unlike the 19^th and early 20^th Centuries, when a country’s economic power was determined primarily by comparative advantages in land and labour. I shall, therefore, approach the subject as a macro-practitioner, drawing heavily from Singapore’s developmental experience.

4 I caution that my experience in human resource development is limited to Singapore, a small island in Southeast Asia, where the make-up of our society is very different from that in the Middle East. We have a multi-racial population of three main Asian races – Malays, Chinese and Indians - and many other non-Asian races. We are a multi-religious society with Muslims forming 15 percent of the population, Buddhists and Taoists 51 percent, Christians 15 percent, Hindus 4 percent and several other religions forming the rest. Apart from people, we have no other natural resources, hinterland or agriculture. Our livelihood depends on enterprise and hard work. It depends on our wits too, and our ability to adapt quickly every time the environment changes.

5 Saudi Arabia, on the other hand, is 3,000 times our size and resource-rich. Riyadh alone has a population bigger than Singapore’s. We therefore have to compensate for our lack of natural resources through an expansion of our human capacity. You can use your abundant oil resources to give your people a high standard of living. We cannot. Our policy considerations and attitude towards human capacity may therefore be different.

6 Nevertheless, what I intend to do is share some of the lessons we have learnt in the course of our development. I do this in the hope of sparking off a discussion. What I have to say does not presume or argue for any particular political system. Ultimately, each one of us will have to formulate policies, based on our own experience, history, cultural context and national conditions. I also hope that our exchange will give me the opportunity to learn more about developments in this region.

Struggling to Survive

7 First, let me briefly give you the historical background of Singapore. Few believed that Singapore could survive when we unexpectedly gained independence in 1965 through separation from Malaysia. Unemployment was high, so too our birth rate. Singapore’s entrepot economy could not provide sufficient jobs for the thousands of youths who entered the labour market each year. To make matters worse, we were also threatened by the communist underground, communal tensions and a less than favourable external environment.

8 In the face of tremendous difficulties, the first generation of Singapore’s leaders galvanised the people to struggle for survival. To compensate for Singapore’s natural resource deficiencies, they emphasised the human factor: policies were designed to change the behaviour of people and to maximise their individual potential and contribution to the country.

Fundamentals

9 Today’s Singapore is the result of successful implementation of this philosophy. In addition, the stable political environment and the predictability of government policies enable investors to make long-term plans and sink in huge investments in Singapore.

10 There are several core principles which underpin our economic transformation through human capacity enhancement.

11 First is the philosophy and practice of meritocracy. Every person - regardless of race, religion, gender and family background – has equal opportunity to realise his or her potential.

12 Second is the creed of tolerance. This is key to harmony in a multi-racial and multi-religious society. We stress social cohesion and mutual respect for each other’s culture, language and religion.

13 Third, we believe that a clean, honest, and effective government is an important competitive advantage, besides its obvious value.

14 Fourth, we are open to new ideas and change. We adapt when the world changes. We also adopt global best practices.

15 Fifth, we take a pragmatic, not dogmatic, approach in solving problems. The Chinese saying for this is “crossing the river by feeling the stones underfoot”. We reject conventional wisdom when it does not accord with our situation and our own experience. For example, in the 1960s and 1970s, when it was fashionable to be anti-American and anti-MNC, we courted MNCs as they brought with them capital, access to markets, technology and management know-how.

16 Of these, I want to elaborate on the principle of meritocracy not because the others are not important but because it is critical to successful human resource development.

17 Put simply, meritocracy is the principle of: “From each his best and to each his performance”. To get people to acquire knowledge and skills and do their best, no one should be discriminated against on the basis of gender, race, religion or background. If he is, he will see no reason to enhance his own capacity or to perform at his best.

18 If a student has ability, he or she will get the education he or she deserves, however poor the family background. Each year, the Government interviews hundreds of outstanding young people and awards the best scholarships for studies in local and top universities around the world. Many of these young people come from humble background – their parents may be taxi-drivers, cleaners, clerks or unskilled labourers.

19 Meritocracy helps to build an ethic of hard work, self-improvement and self-reliance. The Government ensures that all its citizens have the same opportunities to realise their full potential.
This does not mean that they will all finish at the same place together. But they are given the opportunities to compete. A person’s advancement ultimately depends on his ability, performance and contributions. As everyone knows that he will be rewarded fairly and according to his worth, he has the incentive to maximise his potential.

Education

20 Let me now turn to education and training.

21 Underpinning Singapore’s economic transformation and growth are our considerable investments in education, which is the best way to enhance human capacity. Singapore’s experience is not unique. Over the past few decades, other economies in East Asia like Japan, Hong Kong, South Korea and Thailand have all made impressive strides in economic development due to heavy investments in education and training. Studies have shown that countries which have achieved the fastest rate of growth are those whose citizens have been properly educated and have applied the knowledge they acquired to the production of goods and services.

22 Singapore started from a low base in education and skills in 1965. At that time, our literacy rate was 60 percent. Only 3 percent of each year’s cohort went to university. Today, 40 years later, our literacy rate has gone up to 94 percent. And 22 percent of each cohort makes it to university. We continue to invest heavily in education. Our government budget for education is almost 4 percent of GDP. I should stress that it is not simply the amount of money poured into education that counts but how the money is channelled, what is being taught and whether it is being used productively.

23 Several features of our education system may be of interest to you.

24 First, we customise the education system to maximise the potential and creativity of every child. A system of ability-based streaming ensures that cohorts of the same ability are taught together and stretched according to their strengths.

25 In the early days of Singapore education, the best and the weak students were taught the same syllabus and at the same pace. Sometimes, they were even thrown together in one classroom.
The slower students found the curriculum too tough and the pace too fast, while the gifted children felt bored and frustrated by the lack of stimulation. We stream our students in accordance with their learning ability. A streaming system acts like a net for youths with differing abilities, particularly the ones who do not take well to textbooks. Instead of being condemned to a “one-size-fits-all” system, they are taught in cohorts of equal ability so that the teachers can give them the best education according to their potential.

26 We are also now able to nurture student with talents other than academic. A sports school for incubating young budding athletes has been built. We are also planning a specialised arts school.

27 Second, our education system prepares our youths to be useful and productive citizens after school. If a child is not educated to take care of himself or acquire the skills for the real world, there will be serious political and social problems. In our schools, competency in English, Mathematics, Science and increasingly Information Technology (IT) is emphasised.

28 Even Muslim students going to madrasahs must study and attain a minimum standard in secular subjects like English, Mathematics and Science. This way, the madrasahs can fulfil their role of imparting Islamic knowledge to their students as well as prepare them to make a living later.

29 I visited Pakistan last year and toured their International Islamic University (IIU) in Islamabad. The IIU has eight faculties ranging from Islamic Studies and Shariah Law to Economics and Management Science. The Pro-Chancellor explained to me that the University sought to integrate Islamic knowledge with modern thought and secular subjects to meet modern day needs. IIU graduates have gone into various jobs, including in banking and finance, and did not just become religious teachers.

30 Third, given the open nature of Singapore society and economy, our education system must be attuned to global and regional needs. In Singapore, students are taught English and their mother-tongue – be it Mandarin, Malay or Tamil. Proficiency in English and mother-tongue gives Singaporeans an edge over regional competitors in the global arena and, at the same time, helps to preserve our roots.

31 Being an island city-state, awareness of and adjustment to international developments are critical. You will find that in each daily edition of our major national newspapers, at least one quarter is devoted to international news and developments. To encourage this global mindset, we are developing Singapore into an education hub, with a diverse mix of institutions, including branch campuses of foreign universities and renowned international business schools, and facilitating more exchange programmes between Singapore and other countries.

Training

32 The other key aspect of maximising human capital is training and retraining. Formal education alone is not enough to carry a person through life. The facts and skills learnt today may lose their relevance within a few years. The people have to systematically upgrade their skills through lifelong learning.

33 In Singapore, the Government works closely with employers and the unions to ensure that the education and training systems meet the needs of industry. Employer and union representatives sit on the boards of educational and training institutions. We also encourage employers to take an active part in workers’ training. Employers contribute 1 percent of their workers’ payroll into a Skills Development Fund, which they can draw on to subsidise the training of their workers.

34 Women are integral to our workforce. They are given the same education, training and opportunities as the men. In 2003, the female labour force participation rate was 54 percent. It was even higher for younger women. We have women doctors, corporate managers, lawyers and Members of Parliament. More than 10 percent of our MPs are women.

35 Bangladesh too pays a lot of attention to the education of women. I visited the country last June. The textile industry employs nearly 2 million workers and accounts for 80 percent of total exports, worth US$5 billion. 9 out of 10 workers are women. Prime Minister Begum Khaleda Zia is working hard to promote education among females. She believes this is a key way to uplift the entire Bangladeshi society. Last month, she laid the foundation for the first Asian University for Women, so as to expand the scope of higher education for women.

36 The nature of Singapore’s economy has evolved considerably over the past 40 years, going from entrepot trade to manufacturing to a knowledge and innovation-driven economy. We were able to climb up the economic ladder because we have kept our society and economy open and flexible. Globalisation and rapid technological advances continue to change the way we live and do business. The environment in which we operate is fast-changing. Competition is intensifying.
Lower-end manufacturing jobs have migrated to our neighbouring countries or China where costs are cheaper.

37 Economic restructuring is a critical aspect of staying competitive. Our workers have to constantly adapt, upgrade their skills and competencies, or lose their jobs. In the past, a worker would stay in one job all his working life but now, he can expect to change jobs several times. To ensure workers remain competitive, the Government has set up the Workforce Development Agency and a Lifelong Learning Fund to help workers train and retrain and upgrade and update their skills.

Into the Future

38 Let me conclude. Just before coming here, I addressed the inaugural Ernst and Young Entrepreneur of the Year World Summit in Singapore. I told the audience that in 20 years’ time, I expected a new economic configuration in the world. The US will remain predominant but we are likely to see the emergence of new centres of economic power. Besides China and India, I stressed that the Middle East has the potential for significant growth.

39 I based my confidence on two factors. I have visited several countries in the region like Egypt, Jordan, Bahrain, UAE and Oman. The reality is very different from images conveyed by the media. While many countries do face serious security and other challenges, they are also moving forward in economic development.

40 The leaders I met are clearly aware of the sweeping changes in the global economy and understand the impact on them. They are undertaking reforms and want to plug their countries into the global economy.

41 Many Middle Eastern countries command tremendous resources, especially oil and gas. Their populations are young.
In Saudi Arabia, almost half of the total population is under 15. This is a huge asset if heavy investments are made in their education and skills training. You have the resources to do this, unlike Singapore which had to first create the resources to invest in our people.

42 The second reason why I believe the Middle East will do well is the history of Islamic civilisation. The world owes much of its knowledge to the Muslims. It was at the steps of the Abbasid and Fatimid Houses of learning at Baghdad and Cairo that philosophy, medicine, mathematics and other sciences flourished. Without the Muslim effort to synthesise knowledge from different cultures in Asia, Greece, Rome, Byzantine and Africa, the world would be much poorer. We would not have the decimal point. A substantial portion of early European knowledge was based on Arabic texts.

43 During the Abbasid era, the Middle East was the intellectual centre of the world. Elementary education for both boys and girls flourished. While Europe was illiterate, Arabic scholars were correctly calculating the length of the solar year. Oil would not be discovered in the Middle East for another six centuries. The Arabic golden age came about because of the power of intellectual capital. The Middle East once led the world on the strength of great minds. The descendants of those same minds live here today. Provided they maximise their human resource potential, they can be in the forefront of knowledge again.

Thank you.