Comments on: Globollocks Watch

By: Doug Muir

Doug Muir — Tue, 21 Oct 2003 06:53:37 +0000

Sorry, brain hiccup; that last Thought Experiment should read ‘switch Singapore and Kota Baru’, not ‘switch Singapore and Georgetown’. (Georgetown is in the Straits, at the NW end. Kota Baru is around on the other side of the penninsula, near the Thai/Malay border, and several hundred km away from the Straits.) It belatedly occurs to me that this thread has drifted rather far from its original topic. If zizka (or anyone else) wants to continue the discussion, it might be better to take this to e-mail. Doug M.

By: Doug Muir

Doug Muir — Mon, 20 Oct 2003 21:29:46 +0000

“Dirty pool. If you play the expert, you should be right.” I’m honestly not sure what you’re talking about here. I haven’t denied that Singapore was always (i.e., before 1960) a large city on a major trade route. Looking at the quote you give, I don’t see anything that contradicts, even implicitly, anything that I’ve said—with the exception of the bit about tin, in which case I am right and the encyclopedia, I regret to say, is sloppy if not actually incorrect. (Again, Butterworth, not Singapore, was Malaya’s major port for tin exporting. Singapore didn’t even have a rail connection to the mainland until 1924. Singapore was the major rubber port, yes—the rubber plantations were in the south. The tin mines were in the north and northwest. Butterworth and Ipoh are still filled with the impressive mansions of 19th century tin magnates; Singapore hasn’t a one.) “The building of airports made it more than ever a communication center…” Sure. But, again, why Singapore and not any other SE Asian city? “None of the other large cities you name was in a favored position to take advantage of East-West sea trade.” Well, that’s just not true. Medan and Georgetown both sit on exactly the same strait as Singapore. Jakarta has its own strait, and plenty of East-West trade flows through it. Manila has a wonderful natural harbor—something Singapore notably lacks—and, in 1960, was quite a bit richer. Jakarta, Manila and Georgetown were all deliberately founded to “take advantage of East-West sea trade”. Haiphong was the biggest rice exporting port in the world for a while—that’s part of the reason Imperial Japan wanted it so badly. Rangoon and Bankgok were both more important ports than Singapore in the early postwar years; they’d both emerged from WWII in much better shape, after all. Furthermore, I think you’re seriously overestimating the importance of “East-West trade” during the period in question. If you’re talking about trade between Europe and East Asia, it didn’t reach the level of the 1920s again until well into the 1960s. Japan’s trade, for instance, was directed far more towards the US, especially during the period 1950-73. And Singapore’s trade with China simply disappeared after 1949; neither the British nor the Malaysian governments would allow it, as they were afraid of the influence of mainland Chinese Communism on Singapore’s Chinese minority. (Believe it or not, the phrase “Cuba across the Causeway” was in common circulation in the early ‘60s, and Singapore was on LBJ’s list of dominoes.) If you’re just looking at the small scale map, it’s easy to think, oh sure, Singapore sits right on those narrow straits, east to west. But that begs the question of 1) what trade is actually flowing through those straits, and 2) why it should stop in Singapore, as opposed to sailing on by. Through much of the period of Singapore’s growth to ‘developed’ status—especially during the 1960s—long-distance trade through the strait was still pretty much ‘colonial’, viz., raw materials going west passing manufactured goods going east. Getting either of these flows to stop in Singapore was by no means a foregone conclusion. The British built Singapore up to be an entrepot, sure. But the entrepot trade was savaged during the Japanese occupation, and didn’t recover until the 1950s. Then it declined again in the years immediately following independence; the British had used Singapore as a regional trade center, but the British weren’t around any more, and trade patterns were shifting accordingly. (Singapore-India trade, for instance, which was quite important right up to 1940, had pretty much disappeared by 1970.) Indonesia’s asinine konfrontasi policy also kicked a fairly major hole in the entrepot trade. In at least one case—Indonesian oil—post-independence Singapore managed to capture the flow by building highly efficient refineries and positioning itself as the better alternative: higher productivity than the clunky Indonesian refinery system, but still much cheaper than shipping crude to Europe. This was one of Singapore’s first attempts at ‘trade capture’, and it capitalized on a pre-existing advantage (the British had left a refinery system behind). However, the subsequent investments in modernization, both of physical plant and labor force, were purely Singaporean; and they were so successful so quickly as to seriously annoy the Indonesians, then and thereafter. But I digress; oil refining was actually a fairly minor piece of the Singaporean wirtschaftswunder. In the early years, before the manufacturing boom really took off, Singapore’s economy was indeed driven by trade… …but quite a lot it was regional trade, not “East-West”. Singapore’s major trading partner at independence was, of course, Malaysia; and this remained the case until well into the 1970s. Indonesia has always been second or third. (Exact data is on that one is hard to find, because Singapore doesn’t include Indonesia in its published statistical list of trading partners, for reasons too tedious to go into here. But they acknowledged about $13 billion of non-oil trade with Indonesia in 2002.) Thailand is another major regional trade partner, and always has been; it absorbs about 5% of Singapore’s exports, and provides about 5% of its imports, and both these numbers have been pretty stable over the long term. (Thailand provided much of Singapore’s food, especially rice, throughout the crucial development period; Malaysia was too focussed on cash crops, and Indonesia too poor and unstable, to be satisfactory sources of food imports.) I don’t have a time series breakdown for regional vs. long-distance trade, but it’s clear that regional trade was always of the same order of magnitude, if not bigger than, the long-distance “East-West” flows… especially during the key development years. Not convinced? Okay, who is Singapore’s major trading partner today? It’s the US —has been since around 1980. I submit to you that location on the straits of Malacca matters very little for trade going to Los Angeles or Seattle. That trade, for the most part, doesn’t flow through the Straits; it starts and ends there. In this regard, Singapore would be better off if it were a few thousand miles further east. And, as I’ve stated already, the highest growth rates were never in trade. They were in manufacturing in the ‘60s and ‘70s, and then in services thereafter. “In your presentation you made it seem that Singapore was totally insignificant before 1960, which is false.” Well… no. I’ve said that Singapore had reached a million people by the 1950s; that’s correct. (It had more like a million and a half at independence.) I’ve also said that it was poor, dirt-poor; and that’s correct too. Anything more is your inference, not my positive statement. “’The niche’ is the straits sea trade niche. Is that hard to understand?” It’s hard to see why you think it’s so crucial. Or rather, it’s easy to see, but I think you’re painfully wrong. Thought experiment #1: Aden sat on a strait that was busier than Singapore’s from the late 19th to the mid 20th century. And Aden, like Singapore, was built up into a major naval base and regional trade center by the British Empire. For a while Aden may even have had a higher per capita income than Singapore’s (depending on whose statistics you trust). Okay, so a strait location is useful but not sufficient? I’d agree—but now thought experiment #2: switch Singapore and, say, Zanzibar. Keep the population and the post-independence leadership the same, but now Singapore is off the coast of East Africa, and Zanzibar is at the tip of Malaya. I submit that Singapore still does just fine. Oh, probably worse than the Singapore of our timeline… but fine nonetheless, and much, much better than the rest of Africa. (Zanzibar, on the other hand, I think would do little better, if at all. But that’s another story.) Too extreme? Okay, I’ll make it easy. TE #3, Singapore switches places with Georgetown. Now it’s still next to Malaysia, but no longer in the middle of the Straits. Submitted, that Singapore would develop almost exactly as it has; and Georgetown would do little better, if at all. (Actually, I think Singapore would be slightly worse off… but not because of losing the straits location; because of gaining increased dependence on tin. For small developing countries, extraction industries are more likely to be curse than blessing.) “Singapore’s location was a mud flat, but it was competing with other mud flats on those sea lanes, and it was already a trade center long before 1960. Its advantage was its relative location on the sea lanes.” No; its advantage was good government. Good government let it take advantage of the other advantages it had. But without good government, its location would have done it little or no good at all. Doug M.

By: Zizka

Zizka — Mon, 20 Oct 2003 16:11:02 +0000

Doug, probably all the points have been made. Other nations can indeed learn a lot from Singapore, but they should not expect Singaporean results. If I or anyone else said that there was nothing at all to learn, we were wrong. But your strategy is to enumerate everything about Singapore relevant to the argument other than their favored location visavis trade routes, accumulating enough detail that it seems that the location wasn’t really that important. None of the other large cities you name was in a favored position to take advantage of East-West sea trade. In your presentation you made it seem that Singapore was totally insignificant before 1960, which is false.* “The niche” is the straits sea trade niche. Is that hard to understand? Singapore’s location was a mud flat, but it was competing with other mud flats on those sea lanes, and it was already a trade center long before 1960. Its advantage was its relative location on the sea lanes. The point you insist on ignoring. (Like Shanghai and Hong Kong, Singapore was a new trade city built during the XIX century. Shanghai is booming too now, for similiar reasons.) *I don’t claim to be an expert on Singapore. Here’s the Columbia Encyclopedia : “[After 1824] the port grew rapidly…. soon overshadowing Pemnand (and Malacca). The development of Malaya in tyhe late XIX and early XX c. made Singapore one of the leading ports of the world for the export of tin and rubber. The constructyion of a railroad through the Malay peninsula to Bangkok swelled Singapore’s trade, and the building of airpports made it more than ever a communications center.” This really contradicts what you have said. I’m sure that if I went to the library I could find more detailed information. Dirty pool. If you play the expert, you should be right.

By: Doug Muir

Doug Muir — Mon, 20 Oct 2003 09:34:32 +0000

“If Singapore was a million people before Lee took office, it was an important city, dirt poor or not.” No more important than Manila, Haiphong, Medan, Palembang, Jakarta, Bankgok, Georgetown or Rangoon—all of which were either larger, richer, or both. > Whatever else it did, it took full advantage of its favored location, and as such can’t be an example for cities without that favored location (such as Borneo and northern Australia). Agree on the first part, disagree on the second. Yes, Singapore had a good location. It also had some potentially crippling disadvantages—like an insufficient water supply, a godawful strategic situation, a complete absence of natural resources of any sort, and a racially divided population. But never mind that now. You seem to be saying that, because it was in a good location, Singapore has nothing to teach anyone else. I think that’s just wrong; at a minimum, it’s sloppy. You can look at any developing country and say, well, they had X, so that makes their model irrelevant. “Oh, Meiji Japan—they had coal, you know, and copper. Only relevant to countries with coal and copper.” Come on, now. > The rise of Singapore coincided with the end of WWII, the stabilization of China for the first time in 37 years, Japan’s boom, and a worldwide increase in trade. The rise of Singapore began after 1960. WWII was well over by then, and China was getting less stable, not more. Japan’s boom is relevant, but if “being close to a rapidly growing economy” was the answer, North Africa would have grown in the ‘50s and ‘60s and the Caribbean in the ‘90s. (And Singapore is not all that close to Japan. Tokyo-Singapore is a longer flight than New York-LA.) World trade has been growing pretty steadily since 1945; that’s a constant background noise for more or less everyone everywhere, so you can’t really introduce it as a decisive factor for Singapore. Yes, they did a lot of trading; but what enabled them to catch the rising tide while others floundered? > As soon as Singapore successfully occupied its niche, that niche was full (Singapore’s to lose). So the light manufacturing niche was taken? Man, must have surprised hell out of the Koreans, not to mention the Chinese. Oh, you mean trade. Oh, well—Hong Kong’s share of trade certainly crashed during the period 1960-1990. Malaysia’s, too. Thailand positively closed its doors to the world. Actually, I’m not sure what you mean. What niche is this? > So give Lee credit for not screwing things up, but he was starting with big advantages. Yeah, like living on an overpopulated mud flat whose water could be turned off at any time. Singapore 1960 looked a lot like Bangladesh today. It was painfully poor even by the standards of that place and time. Lee is not exactly a lovable fellow, but his accomplishments are still breathtaking. Doug M.

By: Doug Muir

Doug Muir — Mon, 20 Oct 2003 09:10:49 +0000

“Singapore (and Hong Kong before being swallowed by PRC) are just too small as city states to serve much as examples to large countries. Sure, you can extract some general things but thats about it.” Singapore has about five and a half million people; it’s small, but it’s not that small. I disagree that it can’t “serve much as [an example] to larger countries”. In fact, Singapore’s development looks quite a lot like Taiwan’s, and even more like south coastal China’s. But say we accept your proposition, and decide that Singapore is only potentially relevant to developing countries with between one and ten million people. Well, that group includes 35 or 40 countries, with about 200 million people. So it remains a model well worth looking at. Doug M.

By: the cheap seats

the cheap seats — Sun, 19 Oct 2003 23:26:42 +0000

without supporting anyone’s particular position (wink to d-squared), I honestly congratulate those brave enough clean up the language of globalisation in a forum like this for all to see. It makes more intelligent readers of those viewing which is certainly prerequisite to making free trade work for the greatest number of humans.

By: Zizka

Zizka — Sun, 19 Oct 2003 16:24:18 +0000

Pretty sure it was in Abu-Lughod’s “Before European Hegemony” about the world system ca. 1300-1400. If not, in one of her references. I have a lot of books packed up. “Er, northern Australia is a couple of thousand miles away from Singapore, and certainly not on the direct route from China to India (or anywhere else).” Well, isn’t that Davies point, and mine? Even granted that Singapore relies on manufacturing, isn’t it’s trade niche an essential part of its advantage? Might there have been two Singapores, one a pure trade city run by some incompetent, and the other an unfavorably-located but thriving manufacturing city brilliantly run by Pres. Lee? No—the manufacturing city was going to be located at the trade center. (That’s how Detroit replaced Indianapolic as center of the auto industry). My point actually reinforced yours, but weakly. There is no reason that there should be a trade city exactly where Singapore is, whereas (if there’s any significant amount of trade) it’s an absolute certainty that there will be a big trade city somewhere near there. Singapore’s rise, like Hong Kong’s, is a function of the general increase in trade. While it is true that the big trade city didn’t have to be located at Singapore, there was going to be one somewhere near there. (Malacca declined centuries ago.) To preclude irrelevant sniping, despite the fact that the word “Hegemony” is used in the title, Abu-Lugod’s book is not post-modernist. She actually used “hegemony” in the original political-economic sense. She affiliates loosely with Gunder Frank, Wallerstein, and MacNeill as a “world-system” historian, but is much better focussed and less speculative than any of them. Are we talking about Pres. Lee? If Singapore was a million people before Lee took office, it was an important city, dirt poor or not. (It seems to have nbeen regarded as a significant target by the Japanese and British in WWII.) Whatever else it did, it took full advantage of its favored location, and as such can’t be an example for cities without that favored location (such as Borneo and northern Australia). The rise of Singapore coincided with the end of WWII, the stabilization of China for the first time in 37 years, Japan’s boom, and a worldwide increase in trade. As soon as Singapore successfully occupied its niche, that niche was full (Singapore’s to lose). So give Lee credit for not screwing things up, but he was starting with big advantages. What we’re arguing about here is the degree to which Singapore’s success can be an example for other developing nations. Davies gave pretty good examples why the example is of limited value. However, yes, if Singapore was competing for leadership with the other cities in the area Lee did all the right things. One of my original points was that there had to be a major trade city somewhere in the area, but it didn’t have to be in Singapore.

By: Doug Muir

Doug Muir — Sun, 19 Oct 2003 11:18:57 +0000

Zizka says, “The word in the literature is…” Not in any literature I’ve read. Cite? “But I think that this happened in the XIX c.” Nope. Singapore had about 200,000 people at the turn of the century, and was dirt poor. Didn’t reach a million until the 1950s (when it was still dirt poor). “No randomly chosen city (e.g. in South Borneo, Northern Australia, or interior Malaysia)” Er, northern Australia is a couple of thousand miles away from Singapore, and certainly not on the direct route from China to India (or anywhere else). Doug M.

By: Oliver Kamm

Oliver Kamm — Sun, 19 Oct 2003 11:04:34 +0000

P.P.S. Though the other points remain, including the one about the spurious quotation – “basic economic theory”. But the overall list does include fair points, e.g. regarding the Sala-i-Martin study, which I have previously cited on my blog.

By: Oliver Kamm

Oliver Kamm — Sun, 19 Oct 2003 11:04:14 +0000

By: Oliver Kamm

Oliver Kamm — Sun, 19 Oct 2003 00:12:43 +0000

P.S. I’ve only just noticed the China/India point. Yes, there are two versions of the post. Apologies for my consequent entirely misplaced rebuttal; the sentence in question is, nonetheless, correct.

By: Oliver Kamm

Oliver Kamm — Sat, 18 Oct 2003 23:39:13 +0000

Thank you for the gracious edit on your post. I agree with your observation about the misuse of strategic trade theory (it will reinforce the judgement on my monomania of one of your correspondents that I can think of a particularly striking example by Noam Chomsky), and acknowledge that some supporters of free trade have, in an effort to popularise a good policy, themselves indulged in bad economics (e.g. the claim, which Krugman rightly dismissed at the time of the Nafta debates, that such agreements are job-creating measures). Obviously, I do not consider that I am guilty of the same misrepresentation, but – as another of your correspondents points out – self-justifications from bloggers don’t make for interesting reading to anyone but their authors, and I don’t therefore propose to enter more of them. My only additional point is directed to the gentleman who believes I’m an investment banker with lots of free time (in which case I must be the only one). Whatever my profession is, it has no bearing on the validity of my arguments or the truth (or otherwise) of my conclusions, which must be judged on independent criteria. To believe otherwise is an instance of a well-known and persistent logical fallacy.

By: Bob

Bob — Sat, 18 Oct 2003 22:21:37 +0000

These two survey papers by Jeffrey Frankel shed much welcome illumination on the many entangled issues relating to globalisation: http://www.cabe.ca/cbe/vol6_3/FRANKEL.PDF http://www.ksg.harvard.edu/cbg/research/j.frankel_nber_globalization.of.economy.pdf

By: Matt

Matt — Sat, 18 Oct 2003 03:30:07 +0000

Just wanted to throw in my little observation. Singapore (and Hong Kong before being swallowed by PRC) are just too small as city states to serve much as examples to large countries. Sure, you can extract some general things but thats about it.

By: jw mason

jw mason — Fri, 17 Oct 2003 18:39:20 +0000

I loke the idea of this, but you really should go after print stuff (like annoying columnists in the FT) rather than blogger: 1. It really doesn’t matter what blogs say; and 2. If you attack bloggers they’ll come here and post tedious defenses, and they may even link to this site and bring all their readers, and we all know how that will end…