Success Lessons From Lee Kuan Yew, Who Turned Beggar Singapore Into A Prosperous State

Singapore seceded from Malaysia in 1965. He was a poverty-stricken, thoroughly corrupt state. But from that moment, the processes began, the results of which Singapore has been demonstrating to the world for the past 30 years. The start of these processes was given by the Prime Minister of Singapore Lee Kuan Yew. He remained in the prime minister's chair until 1990, and following his rule, the country became one of the four "East Asian tigers". This is the commonly used name for the four countries of the Asian region that demonstrated the most rapid economic growth in the 1960s and 1990s. The Singapore company on this list is Hong Kong, South Korea and Taiwan.

Let us tell you how Lee Kuan Yew succeeded in all this.

Lesson 1. Attract Investors

The main question facing the prime minister of the impoverished country was where to get the money. Lee Kuan Yew graduated with honors from the London School of Economics and reasoned like a businessman: Investors are the best. But what was their interest in the island, where not only resources, even territory was in short supply? Territory and resources have not improved even now. But that doesn't stop Singapore from getting rich and prosperous.

Lee Kuan Yew was looking for an answer in the inquiries of potential investors. And this is what I was able to offer: tax and export benefits, a convenient location of the country from the standpoint of logistics, inexpensive labor, maximum assistance from the state in a quick start of a business without any kickbacks and drifts. Lee Kuan Yew dealt with corruption separately.

The country's government has formed a pool of potential investors. The first lines in it were occupied by transnational corporations, mainly from the USA.

Each corporation now has a personal manager. These were officials, but Lee Kuan Yew set them tasks at the level of top-class sales specialists: to convey to the "client" the proposal of the Singapore authorities, to interest and charm as much as possible, providing without delay any information in which the client showed interest. The goal is at least the arrival of the "client" in the country.

Singapore government sales funnel conversion data could not be found. But investors went to the country, and this fact speaks for itself. It was the investors who laid the foundations for the electronics industry, in which Singapore soon emerged as a world leader. And in the 1990s, when Lee Kuan Yew has already retired, our Oleg Tinkov will buy the equipment there - first as a shuttle, then for his Technoshock chain of stores.

Lesson 2. Do not spare unprofitable directions

With the arrival of foreign investors in Singapore, local manufacturers started to have problems. Lee Kuan Yew decided that it makes no sense to support those who are unable to work without subsidies.

The question arose, in particular, about protective customs duties. Such customs tariffs for foreign cars were introduced by the country's authorities to support the local plant that assembled cars and other enterprises. The opinion of the financial director of Mercedes Benz was decisive. When asked by Lee Kuan Yew how long the plant will still need such a form of subsidies, he replied: "Always."

Lee Kuan Yew canceled duties. The local plant could not stand the competition with the global giants, whose products won in price and quality, and went bankrupt. The same thing happened with local manufacturers of refrigerators and TVs. The battlefield also remained with the world's giants - for the same reason as in the auto industry.

In social and political terms, refusing to support a local producer was an unpopular decision, but economically it justified itself.

When applied to a business, it can be compared to the decision of the owner to close the unprofitable direction. We'll have to fire someone, forget about any plans and ambitions. But this is better than dragging on yourself an unprofitable and unpromising direction and forever bury profit in it, which can be directed to the development of other, promising directions - the very ones that bring it and are able to increase it.

Due to a competent investment policy, the issue of social obligations, which the state has much more than business, was resolved by itself. The laid-off workers went to work for investors, who often offered more attractive conditions than the local employer. Investors' enterprises brought in more profit and paid more taxes on it than local ones who left the market.

For the state, taxes are revenue. And all that remains after all the expenses is profit, which the state, like business, has the right to use for development. Successful enterprises do not just fill the budget, they themselves do not pull any money from there.

Lesson 3. Don't be greedy

Low taxes have become an additional "carrot" for investors in Singapore. Compared to other countries, taxes are low there today. The maximum tax burden on business is 27.1%. In Russia, this indicator The tax burden on business in different countries is 47%, in the UK - 32%. Owners of Singapore companies, including foreigners, do not pay dividend taxes. Of the countries listed in the table, only the United Arab Emirates will give a forum to Singapore.

Lesson 4. Avoid exceptions to the rules

From the very beginning of his work in the government, Lee Kuan Yew focused on the law and its binding on everyone. Singapore inherited the legal system from the time when it was a British colony. Lee Kuan Yew was raised in an English-speaking Chinese family, graduated from an English school and was raised in British culture. And his second higher education, which he received at the University of Cambridge, was in law. In the British tradition - reverence for the law and equality before it for everyone: from the unemployed to the multi-billionaire. Therefore, Lee Kuan Yew did not change anything except personnel in the legal system inherited from British rule. From myself he brought only personal intolerance to nepotism, bribery and embezzlement.

In the civil service, the unity of the rules for everyone meant that the inviolable were no longer there. Burned out on corruption - answer according to the law. And I don't care whose you are a relative or a protégé and what are your previous merits.

And indeed they tried and imprisoned. Only corrupt officials escaped such a fate, who managed to escape abroad as soon as they smelled of fried food. When Lee Kuan Yew himself was suspected of abuse, he initiated the creation of an independent commission so that it figured out everything, and resigned power for the duration of its work. The commission found nothing discrediting.

In his memoir “The History of Singapore: From the Third World to the First,” Lee Kuan Yew emphasizes that corruption traditions in Asia have been developing for centuries. Today, Singapore is consistently among the top ten countries in the world with a minimum level of corruption. In the annual ranking, Transparency International's Corruption Perceptions Corruption Index is in sixth place. Behind - even Sweden, the Netherlands, Canada, Great Britain and Germany, which are prosperous in this regard.

One of the problems of the countries of Southeast Asia is the mafia groups known as triads. Their role in the life of the region is enormous. The Singaporean authorities have taken on the local triads harshly, and now the country does not have such a problem. And the experience of Singapore has shown that without total corruption, the mafia's omnipotence bursts like a soap bubble.

Uniform rules for business in Singapore mean that everyone is equal in everything. If a businessman is related to an influential person in power, this is not a help to business, but only a reason for uncomfortable questions about such an official.

Lesson 5. Motivate, motivate and motivate again

For any state, all its citizens are the same as employees for a business. Only the state has much more obligations to them than the business to the employee. And most importantly, like the company's employees, the citizens of the country need motivation.

For officials, for whom the state was the employer, the stake was placed on the material component. The highest-level government official received a salary at the level of a top manager of a large private corporation. And so on downward.

The judge earned more than the most expensive lawyer - hundreds of thousands of dollars a year, and since 1990 - more than 1 million dollars.

Citizens who are not employed in the civil service were not paid wages by the state, but it guaranteed a constant increase in income due to a competent economic policy. And on my own I added a social package: affordable education, medical care, housing, guarantees of a decent, secure old age, and the like.

Lee Kuan Yew paid special attention to the housing issue and devoted more than one chapter of his memoirs. In the first years of the country's independence, there was a high probability of conflicts with its neighbors. The head of government personally talked with the soldiers, and one of the conclusions was: the soldier is more willing to die for his country if it provides his loved ones with a roof over his head.

After leaving the post of premier, Lee Kuan Yew continued to work in the government. He died in 2015. An indicator of lifetime success for a businessman in such cases is his own capital at the time of death. There is no such information about Lee Kuan Yew. And for a politician and an official, billions in accounts and in assets are not the most important characteristic and, for obvious reasons, are rather negative. The key indicator for Lee Kuan Yew is in what state he left the country behind.