Home / Opinion / Lee Kuan Yew’s economic miracle

When historians chronicle Asia’s modern resurgence, they will focus on the rise of the region’s biggest economies: China, Japan, India. But if there’s such a thing as “Asian capitalism," its spark, smartest proponent and most controversial symbol was the founder of the region’s smallest country: Singapore’s Lee Kuan Yew, who died on Monday at age 91.

Few would dispute that what Lee achieved in his city-state was an economic miracle. This success, together with his clarity of purpose and outsized personality, influenced the course of Asia’s giants.

Between 1960 and 2011, Singapore’s per capita gross domestic product (GDP) surged more than 100-fold. It now tops $55,000. The city stands as one of the most advanced economies on earth, a preternaturally clean and green oasis famed for strong institutions and wide-open markets in a region still burdened by graft, cronyism and snarled bureaucracies.

Lee’s great insight was to recognize that Singapore, after being kicked out of the Malaysian Federation in 1965, needed to look beyond its then-hostile neighbourhood and export higher-end goods to the advanced economies of the West and Japan. Along with the other so-called Asian Tigers, Singapore concentrated on getting the economic fundamentals right—encouraging savings and investment, keeping inflation and taxes low and currencies stable, and emphasizing high-quality education.

This has since become accepted wisdom. Yet Lee chose this path at a time when Communist movements retained a powerful appeal across Asia. (One of his first acts was to harshly suppress Singapore’s own leftists, with whom he’d once allied.) China remained in the throes of Mao’s mad experiments, while Nehruvian India was busy repressing enterprise and shutting itself off from trade. Lee saw his choice not as a matter of ideology—he loved to say that the only test of an idea was its applicability—but of simple pragmatism.

Deng Xiaoping, a great admirer of Lee’s, would adopt a similar attitude when launching his market reforms in China. If for nothing else, Lee should be celebrated for helping to inspire Deng’s revolution, which lifted hundreds of millions out of poverty and constituted one of the greatest expansions of economic liberty in human history.

Political liberty, in Lee’s view, could afford to wait—and that’s the disturbing part of his legacy. His contention that “Asian values" underpinned the region’s stunning economic turnaround had less to do with facts than with his own political convictions. He believed that in a well-ordered society, elites should rule and the masses remain docile.

Lee did more than anyone to spread the idea that Western-style democracy was ill-suited to developing nations—that other countries could emulate Singapore’s economic success only under the tutelage of a wise, if occasionally repressive, state. His arguments have encouraged illiberal regimes from China to Myanmar and given unruly democracies such as India reason to question their own freedoms.

Lee was undoubtedly persuasive, but in the end his theories are unconvincing. The Confucian values that supposedly explain East Asia’s rise prevailed when the region was laid low by its encounter with Western colonialism, too. Those same values—hard work, thrift, filial piety—were hailed in the West before its own industrialization.

To his credit, Lee recognized early on that traditional values might not answer the questions posed by success. “Where do we go next? How do we hasten getting there when we don’t know where we’re going?" he asked an interviewer more than 20 years ago.

The Singapore that Lee created—a nanny state that continues to curb free expression and put political opponents at a disadvantage—has hardly begun to grapple with that challenge. Efforts to instill creativity in schools and society have been stilted and ineffective. Inequality is growing, as is public discontent with the ruling People’s Action Party. It won barely 60% of the popular vote in the last elections—by its own standards, a poor performance.

Like Singapore, other Asian nations dominated by a single party or by the military—China, Vietnam, Malaysia, Thailand—are struggling to spur innovation and adopt more politically enlightened models of growth. Lee really did work a miracle, and was instrumental in releasing the region’s colossal economic potential. It doesn’t diminish that achievement to say that the next stage of Asia’s journey needs fresh inspiration.

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