Challenge in public policy is to find the right balance between markets and government

Speech by Mr Lawrence Wong, Acting Minister For Culture, Community And Youth at the Valedictory Dinner for NUS Master In Public Administration And Management Class Of 2012 on 16 January at the Four Seasons Hotel

Mr Dai Bing, Chargé d'affaires, Embassy of the People’s Republic of China
Professor Wang Gungwu, Chairman, Lee Kuan Yew School of Public Policy Governing Board
Professor Tan Eng Chye, Provost, National University of Singapore,
Distinguished Guests, Professors and Students
Ladies and Gentlemen

1. I am very happy to be here tonight at the Valedictory Dinner for the Class of 2012 of the Master in Public Administration and Management, at the Lee Kuan Yew School of Public Policy.

2. Let me first congratulate all of you – the graduating class of 2012 – for successfully completing the MPAM programme. Tonight marks a very special milestone for all 58 graduating students, as you return to your workplace to take on positions of greater responsibility after ten months of hard work in Singapore.
   

3. I think that it’s an exciting time to be involved in public policy. The world is changing faster than at any time in human history, and the heart of the action is right here in Asia. Many of you would have read the recent release of the US National Intelligence Council (NIC) report, projecting what the world would be like in 2030. The news headlines from the report were about the big power shifts between countries, and there were not many surprises. The conclusions were that Pax Americana is coming to an end; by 2030, Asia will have surpassed America and Europe on most measurements of relative power.

4. But the NIC report also identified another shift, one which may not be as news-worthy, but which will have far-reaching implications for policy-makers, and that shift is the “megatrend” of individual empowerment because around the world, social media and advances in communications technologies are breaking down barriers; they are empowering citizens, who in turn are demanding more of their political leaders. We see a glimpse of this in the uprisings in the Middle East, but it reaches well beyond the Arab Spring. The challenge for governments everywhere, China and Singapore, is to address growing demands and expectations for quality public services, and at the same time manage state affairs in an international landscape that is more fragmented and unpredictable.

5. In this complex environment, there are no easy policy solutions to tackle the challenges we face. Perhaps some of you had come here hoping that you would find some answers from Singapore’s experience. I hope that by now, you would have realised that we do not have the answers! As a civil servant, I used to give presentations to visitors about Singapore’s economic model. I would always tell them that context is important, and that our experience is probably too unique to serve as a comprehensive model that can be replicated in other countries.
   

6. The reality is that Singapore’s development record confounds standard economic theories and our policies do not fit neatly into textbook models. Our approach has always been one of learning by doing, and adapting to changing conditions. I always remember what our first Finance Minister, Dr Goh Keng Swee said when someone asked him whether he had started out with an overall grand design in mind for Singapore’s development – he replied, “I had no initial vision. You just start it and hope for the best”.
   

7. Dr Goh was perhaps being rather modest in describing his contributions to Singapore’s economic development, and he is rightly recognized as our economic architect. But his reply captures the essence of how we moved forward in our development – with an open-minded, experimental mindset, inventing along the way, tackling challenges and seizing opportunities as they came. Through it all, we formulated policies not just by chance, but it was done with a careful and deep appreciation of the critical interdependence between markets and government. So if there is one thing you can take back, I hope that this is what you will remember.
   

8. This issue of the balance between markets and government has long been the central issue in public policy debates. But the fact is that neither markets nor governments can work effectively on their own. The recent global financial crisis and the significant stresses associated with globalisation have put the spotlight on the imperfections and limitations of relying only on market mechanisms. But there are also problems with relying on the government alone because you can end up with bureaucratic inefficiencies and wastage, and deficit spending which may end up becoming permanent.
   

9. So the challenge in public policy is to find the right balance between markets and government, recognising that both are necessary. Market principles are needed to help governments work better, and good government is necessary to help markets function more effectively. The balance between markets and government is never static, and has to be re-calibrated continually, according to circumstance and context.

10. China itself is finding its own balance. For example, China’s economic miracle was not just a centrally planned phenomenon, but was powered through the development of a powerful market economy. It started with a process of experimentation, initiated by Deng Xiao Ping, through the creation of “special economic zones” in the 1980s, starting in Shenzhen, and which was quickly replicated in other coastal cities.  Going forward, the challenge is to continue to reform the economy, and make growth more sustainable and inclusive.  The scale of potential change and restructuring is large, given the size of China. But your practice of conducting policy experiments in selected locales and expanding the successful ones nationwide, will give you the space to innovate, and try out different ideas.

11. I am sure that when all of you are back in your respective workplaces, you will have the opportunities to be involved in such local policy experiments. When you do so, reflect back on what you have learned in your time here, think about the options you have in both market and government solutions, and then work out what would be an optimal balance that is suitable for your situation. 

12. Most importantly, remember that policies can only be as good as how they are implemented. Policies are not just about guidelines or schemes formulated in an office. They have a real impact on the lives of people, on a daily basis. So as a policy maker, it is crucial to go the ground; to see the people whom the policies serve; to listen, consult and reflect. It is only through close engagement with our citizens that we can foster a greater sense of ownership for the policies that are developed, and a stronger sense of shared purpose for the way the country is headed.

13. Finally, I hope that in your time here, you have forged strong friendships that can serve as the basis for closer cooperation among our countries. In the coming years, I am sure China’s experience will offer many insights for Singapore. You will be involved in these exciting experiments, and there will be much that we can learn from you. So I look forward to even more exchanges between our officials and academics. Once again, my heartiest congratulations to the MPAM Class of 2012 and my best wishes for your future careers!