Sunday, April 26, 2015

Economic Legacy of Lee Kuan Yew: Lessons for Aspiring Countries

Developing countries have much to learn from Lee Kuan Yew, the first prime minister of Singapore who transformed the republic from a third world economy to one of the most advanced countries in one generation.

Lee Kuan Yew

The lessons for countries aspiring to learn from the Singapore development model are clear – strengthen institutions and improve governance.

But this is much easier said than done. To begin with aspiring countries need to improve the rule of law so that no one is above the law of the land. Equally crucial, they need to reduce corruption as corruption is regressive – small and medium-sized firms pay higher amounts in bribes than large firms.

Thirdly, they need to reform public institutions such as the civil service, bureaucracy, and public administration. Fourthly, they also need to improve the environment affecting the private sector through regulatory reforms, reforms of labour markets, and provision of clearly-defined property rights.

The dilemma is that such reforms generate benefits only in the longer term, making them hard for policymakers and politicians with a shorter time horizon to set as priorities. Yet without them, other policy measures to support sustained economic growth will become less effective and ultimately unravel.

Importance of good governance

Strong institutions and good governance – the economic legacy of Lee Kuan Yew for aspiring countries

The Singapore model of good governance is well-recognised. Development theorists of the past were of the view that economic development could be explained solely by factors like the availability of natural resources, high levels of saving and investment, and openness to foreign trade and investment.

More recently, the Growth Report published in 2008 by the Commission on Growth and Development headed by Nobel laureate Michael Spence has found that an additional factor has also to be good governance, based on mainly Singapore’s development experience under Lee.

As Senior Minister Goh Chok Tong, who participated in the Commission, puts it, for a delicious dish “besides having the right ingredients and the right recipe, you must have a master chef”.

Economic development does not just happen. It must be consciously chosen as an overarching goal by the government.

Good governance means a government that delivers political and economic stability, implements the correct macroeconomic policies, articulates a vision for the country and implements it.

This requires a capable, committed, and credible government, governments that people can trust in, and leaders who are above the board. An abundance of natural resources is neither necessary nor sufficient for a country’s economic development. What is required is good governance.

A case of good governance is Lee’s choice of the Singapore development model in the 1960s and beyond.

The Singapore Development Model

After the separation from Malaysia in 1965, Singapore was similar to a typical developing country of today. GNP per capita was about US$300, unemployment rates were high, and racial disharmony was rife. The announcement by the British in 1968 that they would withdraw their forces from Singapore was also expected to aggravate the unemployment situation further. How should jobs be created?

As the prime minister of a small country, Lee was always thinking big and making bold decisions in the interest of the country. Mr Lee adopted a development model based on export of labour-intensive manufactured goods to world markets. Lee invited multinational companies from all over to invest heavily in Singapore. Produce in Singapore and sell to the world, he told them.

To provide an attractive investment environment, the government built the appropriate infrastructure, cut tariffs and quotas, offered tax incentives, and implemented appropriate macroeconomic policies. The Economics Development Board (EDB) Singapore was established in 1961 to provide a business friendly environment to foreign investors and to convince them that Singapore was a good place to invest.

The National Wages Council (NWC) was also established in 1972 to make sure that the benefits of foreign investment were shared and also to accelerate Singapore’s move up the development ladder. Mr Lee also met foreign investors regularly and listened to them and their grievances.

Although pragmatic, Lee’s choice of an export-oriented development model driven mainly by foreign investment was a risky strategy at the time. This is because in the 1960s and 1970s, foreign investment was not welcome in the developing world.

The dependency theorists, in particular, argued that foreign investors from developed countries typically exploit cheap labour and extract natural resources of the developing countries. It is only after the success of the Singapore development model that export-oriented development strategies driven by foreign investment has been popularly adopted all over the world.

‘It’s not how you start but how you arrive’

In the 1980s and the 1990s the type of investment Singapore sought to attract shifted gradually from labour-intensive industries (eg, garments, textiles, and wigs) towards more high-tech and knowledge-based industries (eg, chips, wafer fabs, and disk drives).

Lee noted that, since the unemployment problem had been overcome, the new challenge was “how to improve the quality of the new investments and with it the education and skill levels of our workers”.

Lee’s attempt to make Singapore the Asian financial centre and global business hub is also bold. Unable to compete with Hong Kong then, Lee tried especially hard to convince foreign bankers and international financial institutions to come to Singapore by establishing integrity, efficiency, the rule of law, reliability, and stability.

In his words, “[the] history of our financial centre is the story of how we built up credibility as a place of integrity, and developed the officers with the knowledge and skills to regulate and supervise the banks, security houses and other financial institutions….”

Overall, Mr Lee’s development strategy which focused on strengthening institutions and improving governance was successful. Other developing countries will, however, face difficulties in adopting this strategy.

A case in point is South Asia. Countries in this region had begun their reform programmes in the early 1990s by focusing on macroeconomic areas – monetary and fiscal reforms, and industrial deregulation – which had contributed to a more rapid economic growth.

These reforms, however, eventually ran out of steam – because of red tape, endemic corruption, and lack of rule of law – and have contributed to the recent economic slowdown. Lee’s model followed his dictum, which he shared with the King of Bhutan: “It’s not how you start the journey that counts, but how you arrive.” More

 

Monday, April 20, 2015

WARNING: Handle With Care!

Our oceans are home to the discarded munitions of wars past!

In 1987, hundreds of dead dolphins washed up onto the shores of Virginia and New Jersey. Following an investigation, one marine-mammal expert stated that the dolphins showed wounds that resembled chemical burns. It is now believed that these dolphins were exposed to chemical weapons that had been discarded in the ocean. Since World War I, the oceans have been the dumping ground of enormous quantities of captured, damaged, and obsolete chemical, biological, conventional and radiological munitions.

In many cases, these munitions are resting quietly at the bottom of our oceans. However, in other places, these discarded munitions are causing a myriad of problems. There are risks to both humans and marine ecosystems. Let’s first take a look at the some of the potential risks to humans – explosive or chemically dangerous munitions washing up on beaches, munitions being disturbed/activated by fishing vessels, and the leakage of deadly chemicals into the water contaminating the water and the fish that digest these toxins. As the casings on some of these munitions erode and others detonate, poisonous materials are entering the food chain via plankton.

So, what is being done? In 2004, a Canadian by the name of Terrence Long founded a non-profit organization called the International Dialogue on Underwater Munitions (IDUM). Today, the IDUM is an internationally recognized body where all stakeholders (diplomats, government departments including external affairs, environmental protection and fishery departments, industry, fishermen, salvage divers, oil and gas, militaries and others) can come together in an open and transparent forum to discuss underwater munitions, seek solutions, and promote international teamwork on their issues related to underwater munitions.

In many cases, these munitions are resting quietly at the bottom of our oceans. However, in other places, these discarded munitions are causing a myriad of problems. There are risks to both humans and marine ecosystems. Let’s first take a look at the some of the potential risks to humans – explosive or chemically dangerous munitions washing up on beaches, munitions being disturbed/activated by fishing vessels, and the leakage of deadly chemicals into the water contaminating the water and the fish that digest these toxins. As the casings on some of these munitions erode and others detonate, poisonous materials are entering the food chain via plankton.

So, what is being done? In 2004, a Canadian by the name of Terrence Long founded a non-profit organization called the International Dialogue on Underwater Munitions (IDUM). Today, the IDUM is an internationally recognized body where all stakeholders (diplomats, government departments including external affairs, environmental protection and fishery departments, industry, fishermen, salvage divers, oil and gas, militaries and others) can come together in an open and transparent forum to discuss underwater munitions, seek solutions, and promote international teamwork on their issues related to underwater munitions.

In most cases, once an underwater munition has been removed, the problem is removed. That being said, the removal of these munitions can be incredibly dangerous and must be conducted by specialized teams trained in the handling of explosives and hazardous materials. In 2013, tourists visiting the Assateague Island National Seashore, a U.S. National Park on the Maryland coast discovered an unexploded ordnance on the beach. Fortunately they reported the find and the beach was closed while an Army bomb squad exploded the World War II-era munitions.

Between 1941 and 2003, the U.S. Navy occupied about 2/3rds of an Island in Puerto Rico called Vieques. The land was used both as a naval ammunition depot and for live training exercises. Operations included not only the storage and processing of supplies, but also the disposal of wastes and munitions of all types. As of 2004, the EPA had listed the presence of contaminants, such as mercury, lead, copper, magnesium, lithium, napalm, and depleted uranium, as well as unexploded ordnance and remnants of exploded ordnance.

As of 2014, the Navy has spent about $220 million since 2003, to investigate and clean contaminated lands on Vieques. For the remainder of Fiscal Year 2015 Congress appropriated $17 million for the cleanup of Vieques. While it is fantastic that there is forward momentum on the clean-up up this particular area, the effects are showing themselves in many very visible ways. The cancer rate in Vieques is 27% higher than mainland Puerto Rico and the infant mortality rate is much higher than other areas in Puerto Rico. These staggering numbers have turned Vieques into the poster child example of this issue. Unfortunately, the subject of underwater munitions isn’t sexy and doesn’t get the attention that is needs and deserves.

Things YOU can do to make a difference! Educate yourself on this issue, research where you live and locations you make be visiting, talk to others about this issue so more people know, write to your government representatives to let them know you care about this issue, and if possible, make a donation to organizations like the IDUM so they can advocate for all of us. Underwater munitions might be "out of sight" but they have the capacity to make a huge impact on your health and the health of our future generations. More

Thanks to the Marine & Oceanic Sustainability Foundation (MOSF) for collaborating with IDUM and who wrote and posted this blog.


 

 

VII Summit of the Americas - Panama - 2015

"I can say with all sincerity that the essence of my policy is to do whatever I can to make sure that the people of Cuba are able to prosper and live in freedom and security, and enjoy a connection with the world where their incredible talents and ingenuity and hard work can thrive." — President Obama with President Castro

 

 

Saturday, April 18, 2015

Engineers purify sea and wastewater in 2.5 minutes

A group of engineers have created technology to recover and purify, either seawater or wastewater from households, hotels, hospitals, commercial and industrial facilities, regardless of the content of pollutants and microorganisms in, incredibly, just 2.5 minutes, experts say.

A group of Mexican engineers from the Jhostoblak Corporate created technology to recover and purify, either seawater or wastewater from households, hotels, hospitals, commercial and industrial facilities, regardless of the content of pollutants and microorganisms in, incredibly, just 2.5 minutes, researchers say.

The System PQUA, works with a mixture of dissociating elements, capable of separating and removing all contaminants, as well as organic and inorganic pollutants. “The methodology is founded on molecularly dissociating water pollutants to recover the minerals necessary and sufficient in order for the human body to function properly nourished,” technical staff explained.

Notably, the engineers developed eight dissociating elements, and after extensive testing on different types of contaminated water, implemented a unique methodology that indicates what and how much of each element should be combined.

“During the purification process no gases, odors nor toxic elements that may damage or alter the environment, human health or quality of life are generated,” said the Mexican firm.

The corporation has a pilot plant in their offices that was used to demonstrate the purification process, which uses gravity to save energy. We observed that the residual water in the container was pumped to reactor tank, where it received a dosing of the dissociating elements in predetermined amounts.

In this phase solid, organic and inorganic matter as well as heavy metals are removed by precipitation and gravity; and a sludge settles at the bottom of the reactor. The latter is removed and examined to determine if it is suitable to use as fertilizer or manufacture construction materials.

Subsequently, the water is conducted to a clarifier tank, to sediment the excess charge of dissolved elements; then the liquid reaches a filter to remove turbidity and is finally passed by polishing tank that eliminates odors, colors and flavors. The treated water is transported to a container where ozone is added to ensure its purity, and finally is ready to drink. Indeed, the resulting liquid is fresh, odorless and has a neutral taste.

“We have done over 50 tests on different types of wastewater and all have been certified and authorized by the laboratories of the Mexican Accreditation Agency (EMA). Also, the Monterrey Institute of Technology and Higher Education (ITESM), the College of Mexico and the National Polytechnic Institute (IPN) have given their validation that the water treated with our technology meets the SSA NOM 127 standard, which indicates the parameters and quality characteristics for vital liquid to be used for human consumption,” says the Corporate Jhostoblak.

Moreover, they report that this development is protected under trade secret in America and soon will get the same record in Switzerland. Its implementation in the market will depend on the needs of users and the issue of new laws regarding use, consumption and water discharge. More

 

Friday, April 17, 2015

The Banyan Tree Leadership Forum with Tony de Brum, Foreign Minister of the Marshall Islands

The Banyan Tree Leadership Forum with Tony de Brum, Foreign Minister of the Marshall Islands Center for Strategic and International Studies,

1616 Rhode Island Avenue, NW, Washington, DC 20036

10am, Tuesday 21 April 2015

The CSIS Pacific Partners Initiative is pleased to invite you to a discussion with His Excellency Tony de Brum, Minister of Foreign Affairs of the Republic of the Marshall Islands. As the chief diplomat of one of the world’s lowest lying atoll nations, Minister de Brum will discuss the security implications of climate change and progress in negotiations towards a new global agreement, scheduled to be adopted at the UN Climate Change Conference in Paris later this year.

Minister de Brum resumed his position as the Minister of Foreign Affairs on March 17, 2014, after having previously served in the position from 1983 to 1985, and again from 2008 to 2009. He has also served as Minister-in-Assistance to the President, Minister of Finance, and Minister of Health and the Environment during his distinguished career with the Marshallese Government. Minister de Brum has led international calls for more urgent action to address climate change. In February 2013, Senator de Brum addressed the UN Security Council on climate change and security issues, and later that year coordinated the Marshall Islands’ hosting of the Pacific Islands Forum Leaders’ Meeting, which produced the Majuro Declaration for Climate Leadership.

The CSIS Sumitro Djojohadikusumo Banyan Tree Leadership Forum is the premier Washington venue for Asian, Pacific, and American leaders to share their vision and articulate views on vital issues impacting regional and bilateral relations. The Banyan Tree is a symbol expressing the power of many standing as one, and a harbinger of hope for strong and enduring U.S. ties with Southeast Asia and the Asia-Pacific. The CSIS Sumitro Djojohadikusumo Banyan Tree Leadership Forum is sponsored by the Arsari Djojohadikusumo Foundation of Indonesia.

REGISTER NOW (IMPORTANT):

http://my.csis.org/csis/CSIS1700/CSISEventRegistration.aspx?eventcode=2015_156

Follow the event on Twitter @MinisterTdB | @PacPartnersDC | @CSIS | #CSISLive


 

Wednesday, April 15, 2015

Clean Energy Initiatives Announced at US-CARICOM Summit

9 April 2015: US President Barack Obama and leaders from the Caribbean Community (CARICOM) met in Kingston, Jamaica, for a US-CARICOM Summit that focused largely on energy security, affordable energy and climate change mitigation. In conjunction with the Summit, the US announced increased support for the Caribbean through a number of energy and climate initiatives.


In his remarks to the Summit, held 9 April 2015, Obama noted Caribbean countries' particular vulnerability to climate change and especially high costs of energy. Caribbean States, which rely greatly on imported fuel, will take part in an Energy Security Task Force alongside the US and Central American countries to work on energy sector reform, regional integration and clean energy development, according to the White House.


To aid in the goal of developing clean sources of energy, the US announced it will launch a Clean Energy Finance Facility for the Caribbean and Central America (CEFF-CCA). The US$20 million facility will provide early stage financing, in hopes of catalyzing additional sources of public and private sector investment. The US Overseas Private Investment Corporation (OPIC) and US Trade and Development Agency (USTDA) will coordinate the Facility, with the support of the US Agency for International Development (USAID) and the US Department of State. According to OPIC, the CEFF-CCA mirrors a similar programme designed for Africa - the US-Africa Clean Energy Finance Initiative (ACEF).


OPIC, which formed a dedicated financing and insurance team for the Caribbean renewable energy sector in January 2015, is financing a 36-megawatt (MW) wind farm and is planning to finance a 20-MW solar farm, both in Jamaica. OPIC is also focusing on greening tourism, the region's largest energy user. The Caribbean Hotel Energy Efficiency and Renewables (CHEER) initiative, in partnership with the US Department of Energy's Pacific Northwest National Laboratory, looks to improve energy and water efficiency and share best practices in the hotel and tourism industry. USAID will complement the project with energy efficiency and renewables financial tools for the Eastern Caribbean.


USAID is also undertaking a Clean Energy Program with the Government of Jamaica and the private sector "to establish the pre-conditions for clean energy development, optimize renewable energy integration, and accelerate private-sector clean energy investment." The Department of Energy is releasing the 'Energy Scenario Planning Tool,' a publication intended to help all island communities reach similar goals. The Tool builds on the Department's earlier 'Energy Transitions: Island Playbook.'



Leaders at the Summit also addressed the underlying technology needed to advance renewables and energy efficiency, with the US Department of Energy and Jamaican Ministry of Science, Technology, Energy, and Mining signing a statement of intent to cooperate on sustainable energy innovation, in such areas as: energy conservation, energy infrastructure, micro grids and energy storage, fuel diversification, and energy policy. [White House Fact Sheet] [CARICOM Press Release] [OPIC Press Release] More






 

UNEP Report Proposes Pooling Facilities as Solution to Micro-grid Financing

April 2015: The UN Environment Programme (UNEP) has launched a study on mini-grids that proposes ‘Mini-grid Pooling Facilities (MPFs)' as a solution to overcoming key investment barriers. Presenting mini-grids as a critical solution for improving energy access globally, the study examines the challenges of associated investment risks and transaction costs, and proposes addressing these through project and capital pooling.

The report, titled ‘Increasing Private Capital Investment into Energy Access: The Case for Mini-grid Pooling Facilities': provides an overview of mini-grids, including ownership models; identifies and examines two key investment barriers, namely risks to investment in emerging markets and project costs in developing economies; assesses the benefits and drawbacks of project pooling facilities; and explores MPF structures and stakeholders.


On risks, the study notes that mini-grids in emerging markets present a complex risk profile. In addition to discussing perceived risks, such as political or fuel cost volatility, the study examines risks to investment in mini-grids during the development, construction and operation phases, as well as across phases. The study also identifies high transaction costs in developing countries in the areas of project identification, evaluation and diligence, and platform development.


According to some estimates, achieving universal electricity access by 2030 will require mini-grids to serve over 65% of off-grid populations globally. Arguing for the need to develop new financing models to reach such levels of deployment, the report presents MPF as conceptual framework for private-sector financing that pools projects and capital to support the development of mini-grids internationally. According to the study, MPFs can diversify risk and increase capital requirements by strategic selection of projects into portfolios.


The report suggests that MPFs can also help: lower transaction costs through centralizing fixed expenses; decrease technology costs; attract previously unavailable capital; and leverage philanthropic investment, among others. The study stresses the need for developers, investors and researchers to work jointly, conducting proper analyses and determining the appropriate structures for each working context. [UNEP Publications Webpage] [Publication: Increasing Private Capital Investment into Energy Access] More