– by Dr. Pietro Calogero —

XJTLU is located in Suzhou Industrial Park (SIP) in Jiangsu Province; an area initially resourced by Singaporean investment and know-how. The originally named “China-Singapore Suzhou Industrial Park” was created in 1993 with the explicit intention that Chinese administrators would learn something about Singapore’s way of doing things.

In March 2016, I accompanied XJTLU Urban Planning & Design students on their annual international field trip with a similar intention. It had been organized by Professor Yuncheng (Linn) Xu to visit a number of project sites and government agencies to provide a sense of planning in action: to find out how planning had contributed to Singapore had achieved one of the highest standards of living in the world. A country whose beginnings were in a colonial swamp in 1960 but by 1990-2000 it was growing at an annual rate of 7.6%. Between 2000- 2010, GDP almost doubled. An island/city/nation that was thrown out of the newly-independent Malaysian Confederation in 1965, with no natural resources except for its geographic position as a port, and no single economic sector to drive its economic growth… what was the secret ingredient for its success?

Singapore was already a relative success by 1978, when Deng Xiaoping first visited. Within 13 years after its independence, Singapore had already become one of the first “Third World” countries to become “First World”, and in many ways was the model for the China’s extraordinary era of sustained economic growth. Deng Xiaoping saw Singapore as an urban political economy rather than as a nation-state. Many of the key features of Singapore’s success were urban strategies. One that I will focus on here is Singapore’s approach to housing.

Many theorists of development unquestioningly focus on the nation-state as the unit-scale of development. Singapore is one city that is also a sovereign nation-state. To identify Singapore’s success, one could try to use the classic 20th-century theories of political science, international relations, and development studies, which all tend to study the national-level political economy. Or one could look at the island-state through the very different lens of urban theory. The choice of theoretical lens matters, because it affects what we see, how we see it, and which questions we ask in our attempts to make sense out of complex reality.

davPolitical scientists, strongly shaped by Cold War ideologies, often ask “Is Singapore socialist or capitalist?” —assuming that the only possible answers are either/or. From an urban perspective, Singapore is both. What might seem like a contradiction for scholars focused on nation-state level ideologies is, in practice, a hybrid urban political economy. Empirically, this hybrid seems to be one of the best combinations for sustained and broad-based economic growth. Since Singapore’s political economy does not fit the simplistic 20th-century belief in either/or, we should explore Michael Hardt and Antonio Negri’s revival of the 18th-century term “commonwealth” to categorise Singapore’s political economy as “commonwealth capitalism”.

First, Singapore pursued a diversified economic development path, and constantly sought to re-concentrate its economy higher and higher up the value-chain. Thus, Singapore started with basic port facilities and petrochemical refining, and has since moved up to precision machines, international finance and tourism. This enabled overall economic growth, but it could have become highly unequal such as New York City or London, where the vast majority struggle to afford housing while the hyper-rich sump away potential economic growth through speculation and profligate consumption. So, while the first strategy of economic growth is overtly capitalist, the second strategy is overtly socialist: the way Singapore makes housing affordable and accessible to its citizens.

sdrSingapore’s Housing Development Board (HDB) produces and governs about 80% of the housing stock in the city/state. Singapore publicly declares the linkage between housing and national development because the HDB sits under the Ministry of Development. But at the urban scale, development also means the business of building and selling actual urban fabric. The HDB is able to act as the primary developer in the city/state because it uses the compulsory retirement savings system—the Central Provident Fund—as a pool of capital. If the HDB falls short of funds, the central government supplements cash-flow from the national general revenue.

Unlike the Soviet or American models of public housing (which are remarkably similar systems), Singaporeans can buy their HDB apartment, and about 95% do buy. But what does it mean to ‘own’ a unit of ‘public’ housing?

In Common Law, ownership is a “bundle of rights.” The typical British assumption is that ownership is an all-or-nothing condition: you either have all the rights (“fee-simple” ownership) or you have none of them. However Singaporeans only buy partial ownership: the rights to occupy, use, and enjoy a flat; the right to exclude others; the right to sell the property to (HDB-approved) buyers at a profit. But the HDB restricts the right to rent out a flat, the right to buy and immediately resell a flat, and the right to buy unlimited numbers of HDB flats. These three restrictions suppress the types of speculation that have grossly inflated housing prices across the Western world; these three restrictions are overtly socialist. But these three restrictions also make it much easier for Singaporeans to literally “buy in” to the overall growth in value of Singapore, because the restrictions on equity-rights keep the flats affordable.

Thus, Singapore has answered Adam Smith’s question in a way that defies the idea that capitalism and socialism are mutually exclusive: when we enquire into the nature and causes of the wealth of nations (not individual billionaires), we find that the wealth of nations—the common-wealth—requires a system in which a broad spectrum of the population can share in the value-growth of the whole society. The way Smith framed the question makes it seem that it has to be answered in an abstract, national-level way. But Singapore’s answer is not abstract, it is very specific and very urban: Singaporeans buy into the growth of Singapore by buying HDB housing.

Dr. Pietro Calogero, Lecturer
Xi’an Jiaotong-Liverpool University, department of Urban Planning & Design