Rather than seeing foreign investment as a way to steal technology or to build up strategic industries, as China often does, Singapore has followed an open-door policy, building an environment where businesses want to be. The central message has remained much the same for decades； come to us and you will get excellent infrastructure, a well-educated workforce, open trade routes, the role of law and low taxes.
In other words, Singapore's competitive advantage has been good, cheap government. It has worked hard to keep its state small； even education consumes only 3.3%GDP. But the real saving come from keeping down social transfers and especially from not indulging the middle class. The older Mr Lee thinks the West's mistake has been to set up ゛all you can eat゛ welfare states： because everything at buffet is free, it is consumed voraciously.
Singapore's approach, by contrast, is for the government to provide people with assets that allow them to look after themselves. Good education for all is one big part of it. The other mainstay is the Central Provident Fund. A fifth of everybody's salary goes into their account at the CPF, with the employer contributing another 15.5%. That provides Singaporeans with the capital to pay for their own housing, pensions and health care and their children's tertiary education.
There is a small safety net to cover the very poor and the very sick. But people are expected to look after their parents and pay for government services, making co-payments for health care. The older Mr Lee especially dislikes free universal benefits. Once you have given a subsidy, he says, it is always hard to withdraw it. He is convinced that if you want to help people, it is better to give them cash rather than provide a service, whose value nobody understands. China, he thinks, will eventually follow Singapore's model.
But arguably the place that should be learning most from Singapore is the West. For all the talk about Asian value, Singapore is a pretty Western place. Its model, such as it is, combines elements of Victorian self-reliance and American management theory. The West could take in lot of both without sacrificing any liberty. Why not sack poor teachers or pay good civil servants more? And do Western welfare states have to be quite so buffet-like?
By the same token, Singapore's government could surely relax its grip somewhat without sacrificing efficiency. That might help it find little more of the entrepreneurial vim it craves.
