HOPEFULLY NOT TOO LONG-TERM AN EXERCISE:

Singapore sticks to state planning (John Burton, February 7 2003, Financial Times)

Singapore on Thursday released a blue-ribbon report on restructuring its state-directed economy as rising competition from China and India threatens to erode the city-state's industrial base.

The recommendations from a commission led by Lee Hsien Loong, deputy premier, focused on attracting foreign investment and creating entrepreneurial businesses as Singapore moves towards a more service-based and value-added manufacturing economy.

The study was launched in December 2001 as Singapore confronted its worst recession in nearly 40 years. Although Singapore posted 2.2 per cent growth last year, it is still far below the average annual rate of 9 per cent since independence in 1965.

With Singapore losing foreign direct investments to its neighbours where manufacturing costs are cheaper, Mr Lee had vowed "to leave no stone unturned" in examining ways to remake the economy.

However, private economists criticised the government proposals for failing to dismantle Singapore's corporatist economic model. [...]

The panel acknowledged...that creating an entrepreneurial mentality in tightly regulated Singapore "confronts deep issues of culture and social values and is a long-term exercise".

From the Soviet Union to China to post-War Japan, we've seen that top down direction of the economy can give you a decent initial start towards a modern economy, but sooner or later you've got loosen the reigns or the State starts to be more a hindrance than a help. Posted by Orrin Judd at February 8, 2003 5:56 AM