If there is one thing that Singapore could learn from the Japanese economy, it is that the Government should “give enough leeway” to private enterprises by allowing “deregulation” of the private sector, said Progress Singapore Party (PSP) Non-Constituency Member of Parliament (NCMP) Leong Mun Wai.
Mr Leong was among the panellists in the webinar titled, “The Future and Challenges to the Singapore Economy”, organised by the Future of Singapore (FOSG) via Zoom on 17 Apr.
The webinar touched on the fractured global economy with Singapore caught between the US and China blocs, disruptive technological revolutions to jobs and global supply chains in artificial intelligence (AI), the internet of things, 3D printing as well as future pandemics.
Sharing his insights on the future economy of Singapore, Mr Leong believes that the city-state can learn one or two things about the Japanese economy.
“A lot of the areas are quite relevant, I think one of it is that in Japan, during the heydays when they were very successful, when I was there like in the 1980s, they were all talking about how great the industrial policy bureaucrats in Japan are.
“In hindsight actually, they missed out on all the digitalization that comes in the late 90s,” he noted.
Mr Leong observed that the Japanese were “so reliant” on their property market during the course of their high-growth period.
“Because of the collapse of the property in the 1990s, they were still basically licking their wounds even up to today, because of the high leverage and the real estate and the property market in the 1990s at the peak basically had cream off many generations of values out of the economy already,” he explained.
Mr Leong highlighted the similarities between stakeholder capitalism and corporate capitalism – which was implemented by the Japanese “back in those days” – saying that they are “more or less the same thing”.
“Corporate capitalism, actually what they mean is that social responsibility of the companies and the corporate sector, which includes the responsibility to the workers, responsibility to the suppliers, responsibility to the community, and of course, customer first spirit,” he noted, adding that they also have lifetime employment in Japan.
But even then, when Mr Leong was studying in Japan in the early 80s, he was of the view that all these – the Japanese’s corporate capitalism and lifetime employment – may not be the “drivers of the economy”, but rather “just the results of a competitive economy”.
“So going forward what I want to say is that, we bear in mind that we need stakeholder interest, we must put that interest at heart and all that, but they are not the drivers of the economic model going forward,” he added.
However, despite the deflation in Japan over the last three decades, Mr Leong noted that the country has a core technology that comprises smaller companies.
“We all know by now the big Japanese companies that have fallen out one after another – Hitachi, Toshiba, Sony – everybody just got knocked out of the world competition.
“But a core group of technology companies that were previously suppliers and manufacturing for the big companies are still surviving.
“Japan exports today, for example, the trade surplus with China is very much due to the supply of all these very crucial component to the Chinese and even to the Korean economy. So they do have a core technology sector in Japan,” he added.
Nevertheless, the Japanese economy still fails to ride the digitalization wave, said Mr Leong.
This was due to the lack of attention to private enterprises in Japan, he noted, pointing out that the Government did not “give enough leeway” to these enterprises, given the whole system is still “very much led by the Central Government”.
“A lot of things are still very stifling, that’s why the keyword going forward about the Japanese economy is not about some new industrial policy, it is about deregulation.
“Deregulation means allowing the private sector to take the lead. So that maybe something that we have to think about even in the case of our country,” Mr Leong remarked.
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