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​When the going gets tough, the tough can handle it

Published on: 03-Jan-2021

Singapore and Germany have much in common. Both countries are poised to emerge from the pandemic as stronger and better versions of themselves

I lived in Germany for three years in the early 2000s, cold calling senior leaders of German multinational corporations about investing in Singapore to accelerate their Asian expansion.

I had great success because many clients viewed Singapore as the Germany of Asia, with a disciplined and rule-based population, and where manufacturing is a key pillar of the economy.

To get a sense of how comfortable Germans are with Singapore, in a speech given by then Minister for Trade and Industry (Industry) S. Iswaran at the Hannover Fair in 2018, he pointed out that Singapore was Germany's largest trading partner in Asean, and there were 1,700 German companies based in Singapore, an almost 60 per cent increase over the decade before.

Given my time in Germany, I read with great interest John Kampfner's recent bestseller, Why The Germans Do It Better. He describes the resilience of the Germans despite their difficult history, a dependence on manufacturing, and how all this has come together in their response to the pandemic.

The book traces how the Germans have confronted their troubled past with the Holocaust, embraced the fall of the Berlin Wall, and became a unified country.

Kampfner writes: "Germans cannot bring themselves to praise their country. This refusal to see good is hardwired." This persistent self-questioning is rooted in their difficult past, but the trait keeps the country on its toes, and is part of its secret for resilience and success.

Singapore, too, has had a difficult past. The Japanese occupation, the separation from Malaysia, and the departure of the British troops from Singapore have all helped to shape the country into what it is today.

Is it any wonder that the concept of being "kiasu", or the fear of losing out, is part of the national lexicon? A Los Angeles Times article in 2019 described this uniquely Singaporean trait as a "survival instinct" that stems from a "deep-rooted insecurity as a blip on the map".

Kampfner says the German economy's resilience is due to its dependence on manufacturing - building a strong engineering base, underpinned by an "emphasis on education, apprenticeships, and other in-work training".

The economic miracle of Germany was not a foregone conclusion after World War II, which left the country in shambles. Post-war economic reforms, boosted by the American aid programme, the Marshall Plan, led to the rebuilding of the country's economy. By 1968, just two decades after the end of the war, West Germany's economy was larger than the United Kingdom's.

In Singapore, after the announcement of the British troop departure in 1967, the country had to rebuild its local economy by attracting labour-intensive manufacturing. At the time, the British presence accounted for an estimated 20 per cent of Singapore's gross national product.

Its decision to implement national economic strategies to promote the country's manufacturing sector created jobs and wealth. Singapore's per capita gross domestic product rose from below US$10,000 at independence to more than US$40,000 in 2000. Its job creation strategies were so successful that by the time the last British troops left in 1976, Singapore had achieved almost full employment.

In Germany, since Covid-19 struck last year, its resilience has been burnished by its pandemic response. While it was hard hit by the global lockdowns and the knock-on impact on manufacturing consumption, the German government sought to save as many businesses as possible.

Kampfner writes: "Germany has an insurance policy that others do not possess. Years of the Black Zero, the austerity requirement that the federal government and regions must balance their books, left the exchequer with a huge surplus." This allowed the government to unleash a Covid-19 stimulus package equivalent to a whopping 40 per cent of its economy - the highest in the world.

Singapore has experienced some of its darkest hours amid the pandemic, but it can rise again. ST PHOTO: KELVIN CHNG

The economic resilience of the country is evidenced by the steep rebounds in manufacturing output and investor confidence in recent months.

Given its prior investment in research and education, it is no coincidence that Germany is home to BioNtech, the company that provided pharmaceutical giant Pfizer with the first Covid-19 vaccine approved in the Western world and that is now widely distributed around the world, with healthcare workers in Singapore getting the initial doses from last week.

Singapore, too, had an insurance policy built from years of prudence, in its national reserves. The Government has dipped deeply into the reserves to fund more than $100 billion of stimulus and support programmes to save as many jobs as possible.

Fortunately, the economic situation in Singapore is turning the corner, with the start of conventions and other economic activities. Its previous investments in the biomedical sector have also allowed it to roll out diagnostics, devices and now potential vaccines to keep Singapore safe as it reopens the economy.

Beyond economics, Germany has shown great compassion in the face of human suffering. Kampfner writes that between 2014 and 2019, Germany received 1.4 million refugees, mostly from the war-torn Middle East. Integrating so many foreigners has been controversial and difficult, but when it mattered most, German Chancellor Angela Merkel calmly reassured the people in 2015 that "wir schaffen das" - "we can handle it" in English.

This call also has deep relevance for Singapore, as we think about how we want to rebuild, in the face of a post-pandemic global economy.

The text in a short film produced by the Singapore Economic Development Board, entitled An Open Letter From Singapore, captures the challenge and opportunity ahead.

Dear World,

Once upon a time, we had an impossible idea.

To turn sea into land and land into one of the busiest airports in the world.

A gateway for dreamers, a runway for believers.

But now our world is not quite the same.

We are in the toughest crisis of our generation.

Our skies are quieter and our streets too.

But it's also in this quiet that you can hear the belief.

And in the emptiness, see the resolve and resilience of our people.

And just like once upon a time, we now look not at what we see, but at who we are.

And not what if, but what's next.

A people who stared impossible challenges in the face and say no, we won't be beaten.

Planes can be grounded but our spirit, never.

Dear World, together, we will rise again.

Over the course of this year, we have experienced some of the darkest hours this country has seen. We have witnessed acts of great courage from our healthcare professionals, sacrifice and solidarity from workers trying to save every job possible, and accelerated innovation in product offerings from companies hustling to thrive in the new normal.

As we face the future, I do believe that we too can handle it, and rise again as a stronger and kinder Singapore.

Source: The Straits Times, 3 Jan 2021

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