Governance of a City-State
IPS-Nathan Lecture 1: Disruption. Democracy Falters. Capitalism Flounders. World Order Unravels

Professor Chan Heng Chee, IPS’ 7th S R Nathan Fellow for the Study of Singapore, delivered a thought-provoking lecture on the state of the world, moderated by Professor Danny Quah, Dean and Li Ka Shing Professor in Economics, Lee Kuan Yew School of Public Policy, National University of Singapore.

Professor Chan outlined four big challenges the world faces today, aptly summarised in the lecture title ­— “Disruption. Democracy Falters. Capitalism Flounders. World Order Unravels”. It is the first of three she will deliver as part of her IPS-Nathan Lecture series, titled “World in Transition: Singapore’s Future”. Due to the COVID-19 pandemic, the lecture series is being streamed live on IPS’ Facebook and will be broadcast on CNA938 radio at a later date — a first in its six-year history.

Challenge I: Disruption

COVID-19 has disrupted every domain and person in the world, said Professor Chan, but she argued the pandemic would not herald a great transformation. Some things would change, and some trends would be accelerated. She drew experiences from devastating crises such as 9/11, SARS and the Global Financial Crisis, in which the national DNAs of countries eventually reasserted themselves and things settled into  a new normal, a little like the old normal.

She quoted another expert who shared the same opinion — Malcolm Gladwell, author of The Tipping Point, who said unlike the Great Depression and World War II, which lasted 10 years and five years respectively, the pandemic was too short for transformation.

COVID-19 will see major economic restructuring and staggering job losses, said Professor Chan. She anticipated higher expenditure in healthcare systems in wealthier countries; poorer countries would not be able to do the same. She concluded that in the long term, however, technological disruptions to the way we live, work, play and learn would be deeper and more severe than any disruption caused by COVID-19. She quoted Professor Yuval Harari, who predicted that the biggest change wrought by COVID-19 would be the normalisation of surveillance technology and surveillance under the skin in the name of health.

Challenge II: Democracy Falters 

There appeared to be a general dissatisfaction in Western democracies with how democracy was working, especially in countries such as the United States and the United Kingdom.

This is often linked to the country’s economic situation, and whether people think elected officials are responsive to their needs. She cited the Jan 2020  Edelman Trust Barometer, which showed that trust in elected leaders has eroded severely; Western democracies did quite badly, while countries in Asia fared better. Singapore reported a high trust level, with 70 per cent of respondents indicating that they trust the government.

However, Professor Chan was confident that American democracy would survive and could be fixed and there was a healthy debate in Western democracies on reforming the system. She suggested the essence of democracy lies in a government’s responsiveness to people. Alternation of power may not make any difference, though. “People must know that leaders are listening and responding to their needs and that institutions can deliver,” she said.

Challenge III: Capitalism Flounders

Professor Chan then went on to outline a series of problems caused by capitalism, including increasing socio-economic inequality. She added that the gap between the rich and poor was stark in countries such as the United States.

To tackle this, Thomas Piketty, author of Capital in the Twenty-First Century, made radical suggestions, such as heavily taxing the super rich at 80%. However, when former French President, Francois Hollande tried to implement a 75% “supertax”, it did not work.

Glenn Hubbard, Chairman of the Council of Economic Advisers under President George W Bush, made more modest suggestions, such as introducing policies that would provide greater opportunities for people and boosting social insurance. Professor Chan noted that one of Hubbard’s ideas was wage insurance for older workers, which sounded similar to Singapore’s Workfare.

Unlike the US, she said Singapore’s policies have anticipated some of the problems caused by democracy and capitalism.

Challenge IV: World Order Unravels

Professor Chan cited two reasons for the rapid restructuring of a new world order: the election of Donald Trump as President of the United States, and the election of Xi Jinping as the President of the People’s Republic of China.

While President Trump turned inwards and sought to dismantle the existing multilateral agreements the US had helped shape, President Xi took steps to remodel the existing order with China’s ambitious visions for the world. However, Professor Chan pointed out that some Chinese academics argue that China does not want to tear down the international order; it wants to make changes that reflect the country’s economic power.

Professor Chan was uncertain about what the new world order would look like, as it would also depend on the actions of the two countries’ allies. It would not be a return to a bipolar world but perhaps one of two and a half poles. She sensed that the world order would look a lot messier first, before it becomes clearer.

Q&A session

Following the lecture, Professor Danny Quah picked several questions from the audience which had tuned in on Facebook — on issues such as East-West cultural differences, leadership roles for small states, and the extent of disruption caused by COVID-19.

Several participants disagreed with Professor Chan’s view that COVID-19 would not bring about great transformation. They felt that the crisis should be seen as an opportunity to transform government and society for the better.

Professor Chan clarified that globally, the crisis would not be as significant as other pressing issues such as nuclear war, depletion of resources or climate change. However, she agreed that the pandemic would leave a deeper impression on Singapore because of its geo-strategic location and its status as a trading nation. Any impact that COVID-19 would have on trade would affect the nation. The pandemic has also revealed problems within society, such as the treatment and living conditions of migrant workers.

Professor Chan was also asked to clarify her view on democracy. She asserted that she was not against democracy, but was questioning its process and structure. While democracy allows for good governance, it does not ensure it. But if there is good governance, there is likely to be some measure of accountability, she added.

On inequality, Professor Chan said it is a global issue that will never be resolved, as the gap between rich and poor will always continue to exist. Goal posts will keep changing and this will affect how young people view their future. She noted that youths in Asia are more hopeful when it comes to social mobility, while youths in Europe and the US feel otherwise.

In her view, small states can enjoy a position of influence and power in the current world order, citing Singapore’s leadership roles in innovation and healthcare. Leadership in matters of international security and the economy is always wielded by the big powers. Nonetheless, small states are still fighting for agency in shaping these issues.

Replying to a question on Asian vs Western values, Professor Chan said despite differences, both cultures enjoy shared values. The differences, perhaps, were more apparent during COVID-19 where Asian communitarian beliefs meant people were more willing to follow rules, compared to the West which emphasised individual freedoms. She noted, though, that citizens of New Zealand had also complied with government measures, including the wearing of masks. This was probably due to it being a small Western democracy, which made it more open to communitarian behaviour.

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