Authors: Tim Moonen and Jonathan Couturier, The Business of Cities
Singapore has a well-earned reputation for long-term, pragmatic leadership against daunting odds, as the city-state has evolved with remarkable speed from a small impoverished nation in 1965 into today’s iconic global metropolis.
Under the stewardship of the Prime Minister Lee Kuan Yew, the ruling People’s Action Party (PAP) successfully confronted and addressed challenges that many more established cities still struggle with. Across leading urban benchmarks, Singapore is now on average the world’s third most advanced and competitive city. Had such benchmarks existed at the time, it would have been well outside the top 100 upon independence in 1965.
What can be learnt from Singapore’s model?
Singapore’s most striking difference from its peers is its institutional framework. On gaining independence, the abolition of Singapore’s City Council left the city-state with a single layer of government, which could institutionalise a single chain of command and a ‘whole-of-government’ approach. This unique position – as a leading global city with no vertical accountability to a higher tier of government – has enabled Singapore to minimise the co-ordination failures, duplication of effort, and wasteful policy divergences that other growing cities exhibit. The city has been able to prioritise, concentrate, and fast-track towards achieving Lee Kuan Yew’s vision of a city with a global profile.
Unlike most other cities developing global roles, Singapore’s government has benefited from direct control of administrative, economic, political, and social levers to support its strategic development. However, Singapore’s success is not a result of a pre-conceived governance model. When the city–state first became independent from Malaysia in 1965, many development strategies were forced upon it due to the prevailing conditions at the time (lack of a hinterland; small population size; high levels of poverty).
Singapore has helped show that a city that is also a unitary government is better placed than those in decentralised and federalised systems to intervene regularly on skills and public services. And whilst political cycles, funding envelopes and media scandals have often de-railed key projects in other world cities, Singapore’s institutional apparatus has allowed long-term results-oriented thinking to be embedded into continuous and consistent cycles of decision-making processes.
The absence of broader national development priorities has allowed Singapore’s leaders to focus on managing and preparing its labour market, including through close alignment with trade unions and control over wages to retain competitiveness through its early cycles of international development. As China’s Tier 1 cities are now experiencing, this represents a major advantage.
But to focus only on the plusses of Singapore’s institutional set-up would be to underplay its many other serious achievements, particularly in the face of initial disadvantages.
Singapore’s land and resource scarcity is distinct from most other global cities which have evolved into functional regional agglomerations. Post-independence, Singapore lacked a sizeable talent base or indeed a fiscal base with which to access the investment capital and financial transfers that are normally critical for low employment, high poverty regions. It is arguably through its mitigation of these deficits that Singapore’s leadership has really excelled.
The city-state’s small size and lack of hinterland dictated certain development pathways for its leaders. Economically, it made sense to open the city up to international firms and expertise, avoiding over-reliance on local business elites. In housing, land limitations have encouraged Singapore’s agencies to function coherently together. The Housing Development Board works in tandem with utility, planning and infrastructure agencies to deliver fully integrated and serviced neighbourhoods, with land use coordinated from the planning to delivery stage, to mitigate financial and spatial limitations.
Singapore’s small size means it has also had to adapt to a lack of diplomatic structures and international institutions that other emerging cities such as Vienna, Mexico City or Tel Aviv possess. Singapore has instead sought to build its capabilities through educational and research clout, non-governmental organisations, and world-class economic intelligence monitoring and investment promotion managed by local agencies.
Singapore’s leadership and development model has achieved remarkable results, but the management of the externalities of its success is a task that is now emerging. High population growth, system congestion, land constraints, the risks of a two-speed economy and a declining consensus on immigration all present challenges for leadership and strategy. After five cycles of growth, resident expectations are higher than ever, leading PAP to recently increase its welfare spending.
The next cycle of development will also require reform of government-linked companies which, despite their excellent management, risk crowding out the innovation culture necessary for leading edge global cities to thrive. Leaders have choices to make as to whether to consolidate Singapore’s large Asia-Pacific corporate base, or actively become an entrepreneurial hub with a renewed appetite for investment and innovation risk. As competition and complementarities in the region’s urban system intensify, vigilance on Singapore’s established advantages will be key. But the city’s leadership dividend is likely to ensure that Singapore responds judiciously to its combined demographic, fiscal and spatial conundrums.
Whatever the future holds for Singapore, the city is now well established in the upper echelons of the world cities hierarchy, and JLL’s range of in-depth global rankings confirms this. Singapore makes the Top 15 globally in the 2014 ‘Global Commercial Attraction Index’, which measures a city’s economic and real estate market size and maturity based on a number of indicators. The city also features within the Top 20 of the JLL City Momentum Index 2015 and JLL’s Investment Intensity Index (Q1 2015), demonstrating both its overall dynamism and attractiveness to investors. Despite growing pressures and upcoming challenges, Singapore remains in a strong position to continue its remarkable ascendancy and further cement itself as a key player on the world stage.
Read more in The Business of Cities 2015.