A close partnership between organised labour and the government has contributed to turning Singapore into an economic success
Glenda Daniels
In a matter of a few years, Singapore transformed its economy from that of a developing country to a high-tech, knowledge-based system by restructuring its economy and upgrading the skills of its people.
There are lessons here to be learnt for South Africa, says Professor Linda Low, a Singaporean labour economist and international speaker at the recent skills development conference organised by the Department of Labour in Midrand.
Singapore had a human resource model similar to South Africa’s, with a low skills base, she says. But no longer. Industrialisation in the 1960s was followed by intensive upgrading of the manufacturing services in the 1970s but in the 1980s, the focus was on emphasising technical education. The problem was a serious shortage of labour.
Some of the ways in which the economy grew and skills were upgraded, Low says, were “tripartite dialogue” between the government, labour and business; a strong commitment by the government one of the largest employers to training grants; the complete relaxation of immigration laws and eradication of xenophobia in society; the pouring of enormous resources into research and development; an emphasis in education on mathematics, science and technology; and tax incentives for companies that trained their workers.
Singapore is run by a highly interventionist and authoritarian state, she says, but the state’s partnership with trade unions made a huge difference to skills development. Labour took on the call for upgrading the country’s skills base by forming partnerships with the government, which bore results for example, the ministries of labour and education and the vice-chancellors of universities and technikons formed a council that drew up recommendations for the government on how to take skills development forward.
A large part of the economic success that is Singapore today is attributed to the sweetheart relationship of organised labour and the government. “The trade unions in Singapore are very friendly. There is complete cooperation with the government on skills development, wage negotiations, retrenchments, growth, development and education,” Low said.
Today Singapore is an international hub of economic activity. Low says it can be partly attributed to “the relaxing of immigration to bring in the best foreign talent … We could not afford to be xenophobic.”
In addition, while the skills development fund was drawn from the payroll of employers (as in South Africa), skills development legislation was structured in such a way that there was a cross-subsidisation of funds for training.
This means that the largest users of the fund were the smaller companies, because they were funded largely by multinationals and the government so while smaller companies made smaller contributions, they received more training. Incentives included the government’s commitment to fund up to 50% of the cost if a company wanted, for example, to train technicians for the electronic sector.
While Singapore’s workforce is still not particularly well educated half has not completed primary education skills upgrading and technological education have kept unemployment at a low level. To achieve Singapore’s high-tech environment, successful virtual learning centres and distance learning programmes were set up and are still in progress.
Through an emphasis on technical education and relaxation of immigration laws, the initially small core of IT entrepreneurs has grown, with new and innovative ideas coming into the country all the time.
Low points to two problems, however. One is that Singapore did not bring the private sector into partnerships right from the start. And secondly, the big difference between her country and South Africa is that the total population of four million is as large as the total unemployed population in this country.
Kevin Wakeford, CEO of the South African Council of Business (Sacob), agrees that there are some lessons to be learned from the Singapore success story, “especially in terms of ‘tripartite dialogue’, which is the only way forward”.
However, he points out that “Singapore has highly powerful and efficient parastatals, which we don’t have here. Also South Africa is a democratic society. So we have to rely on organs of civil society to lead the way, with [the] government as an enabler.”
What South Africa also needs is a more common approach between labour and business, but he feels that this is emerging within the Millennium Labour Council, a joint dialogue forum between the two sectors.
“Business is taking skills development very seriously. Eradicating xenophobia, like they did in Singapore, is important here too. Often immigrants bring in risk-taking and skills, which we need. Germany got skills development and economic growth right. We have seconded a person from Germany to sensitise business on how to benefit from the Skills Act.”
Dorothea Sanwald of the German Chamber of Commerce and Industry was appointed a few months ago to head a Sacob programme to teach business skills. “People are very motivated here. The attitude is good,” she says. “There is the atmosphere for skills development to happen in South Africa. It’s just started now with all the policies in place. In Germany there have been 150 years of companies engaged in vocational training. Here, we have got to get companies to buy the concept.”