The Man Lee Kuan Yew Would Be Lost Without

Summary

Dr. Goh Keng Swee, often overshadowed by Lee Kuan Yew, was a key architect behind Singapore's transformation. Serving as Finance Minister, he introduced policies that attracted foreign investment and stabilized the economy. His visionary work in currency management, the establishment of GIC and Temasek, and the development of Singapore's defense and education systems laid the groundwork for the nation's prosperity. Dr. Goh's behind-the-scenes contributions helped shape Singapore into a successful, resilient nation, proving essential to the country's story of success, often without the recognition he truly deserved.

Takeaways

• 😀 Dr. Goh Keng Swee played a pivotal but often underappreciated role in transforming Singapore, as acknowledged by Mr. Lee Kuan Yew.
• 😀 In 1959, Singapore faced extreme economic challenges, with unemployment reaching 14%, and Dr. Goh was tasked with solving the crisis.
• 😀 Dr. Goh's innovative approach focused on attracting foreign investments, especially by setting up the Economic Development Board (EDB), which brought in companies like Apple.
• 😀 Contrary to common economic wisdom, Dr. Goh prioritized foreign investment over import substitution, understanding that Singapore's small market couldn't support domestic production for all needs.
• 😀 To stabilize Singapore's currency and boost investor confidence, Dr. Goh implemented a currency board system and a policy of pegging the Singapore dollar to a basket of currencies.
• 😀 Dr. Goh's foresight led to the establishment of Singapore’s sovereign wealth funds, GIC and Temasek, which today generate billions for the national budget.
• 😀 In defense, Dr. Goh created a self-sufficient military for Singapore, even reaching out to Israel for military expertise to combat external threats.
• 😀 Dr. Goh's deep understanding of economics and self-sufficiency led to the establishment of Chartered Industries of Singapore, now known as ST Engineering, to manufacture weapons and military parts.
• 😀 He also revolutionized Singapore's education system by implementing streaming to reduce dropout rates, focusing on tailoring education to students' abilities, though controversial at the time.
• 😀 Despite being a behind-the-scenes figure, Dr. Goh was instrumental in setting up policies that shaped Singapore’s resilience, from its foreign reserves management to its long-term fiscal strategies.

Q & A

What was Dr. Goh Keng Swee's role in Singapore's economic recovery in the 1960s?

Dr. Goh Keng Swee was tasked with the role of Finance Minister in the 1960s during Singapore's economic freefall. He recognized the need to attract foreign investments to solve the high unemployment rate, which was essential in avoiding the spread of communism in the country. He founded the Economic Development Board (EDB) and strategically used the 'Yi Bing Zhi Ji' tactic to boost investor confidence.

What was the key strategy Dr. Goh used to attract foreign investments to Singapore?

Dr. Goh used a combination of media manipulation and the creation of a perception of rapid industrialization to build investor confidence. He arranged photo opportunities for factory openings and made sure every stage was publicly visible, giving the impression that Singapore was already rapidly industrializing, which helped to attract foreign investors.

How did Dr. Goh ensure Singapore's currency stability?

Dr. Goh chose the currency board system over a central bank to stabilize Singapore's currency. This meant that for every Singapore dollar circulating, there had to be a corresponding asset in reserves. This approach helped ensure stability during a time of global financial turmoil and helped attract further foreign investments.

What was Dr. Goh's approach to managing Singapore's sovereign wealth?

Dr. Goh pioneered the creation of Singapore's sovereign wealth funds, GIC and Temasek, to invest surplus reserves from Singapore's export economy. This not only provided returns that now contribute significantly to Singapore's annual fiscal budget but also ensured that excess reserves were effectively managed and used to benefit the nation.

How did Dr. Goh approach defense strategy for Singapore after its independence?

Dr. Goh played a critical role in building Singapore's defense capabilities. Faced with an existential threat from neighboring countries, he reached out to Israel to help build the Singapore Armed Forces and emphasized the importance of self-sufficiency and developing local defense manufacturing capabilities, such as through the Chartered Industries of Singapore (now ST Engineering).

What impact did Dr. Goh have on Singapore's education system?

In 1979, Dr. Goh was tasked with reforming Singapore's failing education system. He introduced streaming, which grouped students based on abilities, to reduce dropout rates. His reforms led to significant improvements in educational outcomes, such as a dramatic reduction in dropout rates by 1985.

What were some of the key challenges Dr. Goh faced while implementing his education reforms?

Dr. Goh's education reforms, particularly the streaming system, were highly controversial. Critics argued that it stigmatized weaker students, but Dr. Goh believed it was necessary to ensure that students received the education best suited to their abilities. Despite the controversy, his approach led to a dramatic decrease in dropout rates and improved educational outcomes.

Why was the Economic Development Board (EDB) important for Singapore's growth?

The EDB, established by Dr. Goh, was crucial in attracting foreign investments to Singapore, which was essential for job creation and economic stability. By securing deals with major global companies, including Apple's first factory in Asia, the EDB helped lay the foundation for Singapore's industrialization and long-term economic growth.

How did Dr. Goh's policies help Singapore avoid economic crises during the 1970s oil shocks?

Dr. Goh implemented policies that focused on managing Singapore's exchange rate as a monetary tool to combat inflation during the oil shocks of the 1970s. By pegging the Singapore dollar to a basket of currencies and allowing it to fluctuate within a controlled band, he was able to keep inflation lower than in other countries and maintain economic stability.

What was the significance of Dr. Goh's decision to create GIC and Temasek?

Dr. Goh's decision to create GIC and Temasek was significant because it allowed Singapore to effectively manage its surplus reserves, which resulted from its export-driven economy. These sovereign wealth funds have since become critical in maintaining Singapore's financial health, providing returns that contribute significantly to the country's budget and financial resilience.