Ngiam Tong Dow the policy maker
Source: The straits times NOVEMBER 21, 2010
Ngiam Tong Dow has always had Singapore's best interests at heart, reports Vikram Khanna
As a policymaker, Mr Ngiam Tong Dow has shepherded the Singapore economy through its transition from Third World to First. He retired in 1999 after 40 years in the civil service.
'Strategic pragmatism, that is my song,' declares Ngiam Tong Dow, in the course of our two-hour conversation amid the lunchtime hubbub and clatter of porcelain at a Chinese restaurant in the Singapore Island Country Club.
Many of his favourite quotes and sayings are pointedly practical: Give a man a fish and you will feed him for a day, teach him to fish and you will feed him all his life. Forget about cutting edge research; what we need above all is competence. And this one from Minister Mentor Lee Kuan Yew, when he was still a young prime minister and Singapore was poor: Give a man a job and help him buy a house, and he won't riot any more.
Arguably the most outspoken of Singapore's policymakers, Mr Ngiam is also among the most experienced.
During his 40 years in the civil service, from which he retired in 1999, he has served as Permanent Secretary in four ministries, in addition to the Prime Minister's Office.
He has also been chairman of the Economic Development Board, DBS Bank, Housing Board and the Central Provident Fund Board. He has dealt with at least two generations of civil servants, ministers, chief executives and external advisers.
His view of policymaking in Singapore is panoramic, informed by an acute sense of history and political reality, an instinctive feel for what will work and what will not.
After his retirement from the civil service, Mr Ngiam, now 73, has been doing the rounds of the lecture circuit, sharing his views on policy as few retired civil servants in Singapore have ventured to do. He has earned a reputation for candour, challenging many of the Government's policies. Some people ask why he did not speak up while he was in office the way he is doing now. Mr Ngiam claims he did, but as a civil servant, he was careful to keep his views within the Government.
But many of those views are now public knowledge and are about to be disseminated more widely. His speeches have been collected in a book, entitled The Dynamics Of The Singapore Success Story, which was launched last Friday.
'I would like to describe my book as a study in political economy,' he says. 'Political economy is one part politics and two parts economics.'
Singapore's political economy is his forte. Few can tell the story of its transformation as he can, from the days of high unemployment, slums and tin-shed factories when he started his career, to a modern high-tech economy with a First World per capita income when he finished.
Raise competence levels
For about 30 years, Mr Ngiam worked closely with then Finance Minister Goh Keng Swee, of whom he has fond memories.
In the 1960s and 1970s, Singapore went into shipbuilding and shiprepair and several defence-related companies - the forerunners of ST Aerospace and ST Engineering - as well as Singapore Airlines.
While he agrees that these companies were necessary, Mr Ngiam is not generally in favour of targeting industries, as was sometimes done, as with, for example, semiconductors and biotech.
'Let the MNCs take the big bets,' he says. 'Our big bet should be on people, on education. If we try to do cutting-edge science, we can never beat the West or the Chinese and Indians, because we don't have the talent base. So our policy should be to raise competence levels. That's why I supported Philip Yeo when he said he wants to train 1,000 PhDs.'
But on Singapore's thrust into the biotech industry, he is circumspect. 'When we make such investments, we must ask, what comparative advantage do we have? If we do not have a comparative advantage, we should not go into it.
'We should train engineers who can do research for big companies. It's the same MNC-centric strategy, but at a higher level. In the early days we trained our people to become machinists. Today, if we want big pharma to come in, we should train the chemists and PhDs to be able to work for big pharma.'
On creativity, Mr Ngiam likes to differentiate between 'thinking within the box' and 'thinking outside the box'.
'I tell this story,' he says. 'When a Chinese boy goes home after school, his mother asks him: 'What did you learn from your teacher today?' But when a Jewish American boy goes home after school, his mother asks: 'How many questions did you ask your teacher today?'
'Which boy do you think will grow up to be more creative? I think, in the contest for intellectual hegemony, the Americans will win. Because the Chinese think within the box. The Americans are more open, they are encouraged to think outside the box.'
Although Mr Ngiam favours meritocracy, he believes that Singapore companies should be run by local CEOs. 'We must have our own people,' he says. 'Because unless you're a Singaporean you will not have the emotional attachment. You can be very competent, but if you don't feel for Singapore, I don't think you can grow a Singapore company.
'But someone like David Conner, the CEO of OCBC Bank, he's been here so many years that I would regard him as a Singaporean even if he had American citizenship. So by Singaporean in this context, I mean more the mentality than the colour of the passport.'
Mr Ngiam takes issue with some aspects of Singapore's immigration policy. He explains: 'We increased the size of our population by one million people in 10 years. It's true that in the 1970s, we had a shortage of labour and we did tell the Government we need to increase our population which was 3.5 million. At that time, it would have been the right policy to increase the numbers.
'But today, it's no longer a question of numbers, it's a question of technology. Thirty years ago, $1 million of output could be produced by 100 people. But today, it can be produced by 50 people, because the technology has changed. So numbers of people are not so important any more.'
What matters is the quality of immigrants, he points out.
'If I was in charge of population policy, I would have said: Every immigrant that we take in, his or her education level must be above our average. Our average is O levels. So the people we take must be above O level, then they can value-add. If they are below O level, they would be negative value-adders. I find it odd that people from China have come and taken over our hawker centres. What's the value- add there?'
He acknowledges that Singapore faces chronic labour shortages, but suggests that this is because employers take the easy way out.
'The only way for us to grow is to skill up - we must raise our productivity, which we have neglected for 30 years,' he explains. 'If we had been tough and told building contractors, we are not going to allow so many construction workers, they would have automated long ago. But even today they are not doing it. Look at a Japanese construction site, and see how many fewer people they use than our contractors.'
Raising wage levels
Skilling up is also his prescription to raise wage levels and to narrow the income gap. He opposes the idea of a minimum wage. 'That is namby-pamby thinking,' he says. 'You get higher wages by improving skills, not by legislating. We need to take skills training much more seriously. A lot of the short courses offered these days by professional firms are like wine tasting. They are not real training.'
The Chinese take training very seriously, he points out. 'I teach Chinese mayors at NTU (Nanyang Technological University). You know, under the Chinese system, if you want to get promoted, you must go overseas, not for a short course; you must get a degree. Without their degrees, my NTU students won't be promoted.'
While remorselessly pragmatic and generally pro-market, Mr Ngiam favours government intervention to help the poor.
'About 10 per cent of people need to be helped and here, the state should intervene,' he says. 'My wife is a teacher. She had students who used to go to school without breakfast. How do you expect them to do as well as other students?
'We should use old school buildings to run hostels for these children. They should live there Mondays to Fridays. Meals should be provided and they can go to different schools. It's worth our investing in this. We could help 10 per cent of our students, which would run into the thousands, and the cost would not be that high.'
The state should pay for this, he adds, 'because those in the social sector who try to help others should not be in the business of fundraising. That is not their job; their job is to show kindness to people'.
There are two areas where Mr Ngiam is emphatically critical of policies because he believes they do not serve the average citizen. One is the CPF Investment Scheme, under which account holders are permitted to use their CPF to buy shares. 'Allowing people to buy shares with their CPF money is like sending lambs to the slaughterhouse,' he says.
'The average CPF member is not stock market savvy. When I was CPF chairman, I said my duty is to the members. CPF is already used for housing loans and medical care. I don't see why it should also be used for stocks. It's unconscionable.' But Mr Ngiam was overruled, because, he says, 'one of the KPIs (key performance indicators) of MAS (Monetary Authority of Singapore) was to promote Singapore as a financial centre'.
The other policy of which Mr Ngiam has been a long-time critic is the move to allow integrated resorts (IRs) that include casinos. 'By going in for IRs, Singapore has taken the low road,' he says. 'Casinos undermine our moral fibre.'
He does not believe the gaming industry has fundamentally changed from the 1960s, when Singapore shunned it. 'It's the same. It only has more lights and glitter.'
Nor is he impressed by the argument that the IRs will create 30,000 jobs. 'Such jobs don't have much of a multiplier effect,' he suggests. 'It's different from creating 30,000 jobs in rig building or pharmaceuticals.'
Whether they agree with him or not - and people sometimes do not - nobody denies that Mr Ngiam has always had Singapore's best interests at heart when crafting policy; his pragmatism has been not only strategic, as he likes to say, but also compassionate.
As a policymaker, he has shepherded the Singapore economy through its transition from Third World to First. I ask him what should come next, after material prosperity.
'We should become a highly educated society and keep adding to our knowledge,' he says. 'We should also be a humane society where people have respect for each other. Then we can survive. That's the Singapore I would want for my grandchildren.'