appConfigEntityId

bodyType

customContents

entityId

entityUuid

isVideo

articlePageQuery

article

articleSchemaContent

content

hooksArticlePageAdvertisementConfigArticle

hooksArticlePageFloatingButtonConfigArticle

appConfig

filter

json

liveArticle

Donald Low

In the discussion on Hong Kong’s first ever five-year plan, much ink has been spilled on the merits of a planned economy. The most recent example of this was Anthony Rowley’s commentary that cited Singapore as an example of a highly successful planned economy.
Unfortunately, he misrepresents what planning in Singapore is about. There are lessons that Hong Kong can draw from how the Singapore government navigated a changing environment – but not the ones Rowley highlights.
It is quite understandable why an observer would view Singapore as a planned economy. After all, signs of order are all around. Nearly 80 per cent of Singaporeans live in public housing; the city is well-designed, green, and manicured. Clearly, this is a city that has been meticulously planned and engineered for decades.
Above all, Singapore’s politics is carefully managed by a ruling party that has been in power since 1959, and political dissent is often constrained by a paternalistic state.

But the idea of the Singapore economy as a top-down, dirigiste and planned one is a caricature at best. While various government agencies in Singapore engage in planning (loosely defined), the city state has never had five or 10-year plans, nor set production targets the way the Eastern bloc countries and China did.
Policies, not plans
Singapore’s first finance minister and deputy prime minister Goh Keng Swee was openly disdainful of socialist planning, saying that “planning as we know it has a limited value. Economic policy is more important”.
In economic policy, perhaps the most important difference between the Singapore economy and Hong Kong’s is the role of the state in industrial development.
Since the establishment of the Economic Development Board (EDB) in 1961, the Singapore state has promoted manufacturing as one of the key engines of the economy. Even today, manufacturing output comprises an astonishing 19 per cent of Singapore’s GDP, compared with less than 1 per cent in Hong Kong.
The EDB – or any other economic agency – has never produced five-year plans, so that cannot be the reason for Singapore’s success in industrialisation and industrial upgrading. But thanks to industrial policy, Singapore is a key node in global value chains in various high value-added industries such as electronics, petrochemicals, precision engineering, and pharmaceuticals and biotech to name a few.

The lesson from Singapore here is that five-year plans are much less important than specific policies that drive industrial diversification and upgrading.
A plan is simply a declaration of intent; whether that intent becomes reality depends on the right policies being formulated and how they are implemented. It is also quite common for governments to come up with bold visions and ambitious intents; what is much rarer is the capacity to execute change effectively.
With industrial policy, this means ensuring sound macroeconomic fundamentals and having the right microeconomic tools – such as tax incentives, foreign labour allowances, vocational training and worker upgrading programmes – to develop the desired industries.
But none of this was static or unchanging: external shocks and changing domestic conditions often necessitated changes to Singapore’s economic policies in ways that no five-year plan can foresee.
Quick to adapt
A second common error is to mistake the precision of the plan for its validity or quality. Even in a free-market economy like Hong Kong’s, there is a fascination bordering on obsession with setting precise targets or key performance indicators (KPIs) for government. The logic is that since much of what government does not lend itself easily to market metrics, targets or KPIs impose the necessary discipline on government.
This obsession is not always healthy. A target may be very precise, but it could also measure the wrong thing. This is not to diminish the value of planning, but to emphasise the importance of adapting quickly to changing conditions.
Being large bureaucracies, governments are often creatures of habit; their behaviours do not change quickly or easily even when circumstances require them to do so.
You just start it and hope for the best
Goh Keng Swee, Singapore’s first finance minister
When asked in 1992 if he had started out with a master plan in mind, Goh replied: “I had no initial vision. You just start it and hope for the best.” In many respects, Singapore’s economic success was the result of constant adaptation and improvisation.
For example, Singapore’s original economic plan was import-substitution industrialisation. This was one of the motivations for Singapore to join the newly established Malaysian federation in 1963 – to create a common market.
When Singapore separated from Malaysia in 1965, the plan was clearly no longer workable. Singapore adapted quickly and embraced export-oriented industrialisation, laying the foundations for the highly globalised economy it became a decade or so later.
Another example of adaptation was the practice of adjusting Central Provident Fund (CPF) contribution rates as a macroeconomic stabilisation tool. Singapore has, on various occasions, adjusted employer contribution rates in response to changes in macroeconomic conditions – lowering them to maintain cost competitiveness when faced with negative demand shocks, and raising them to deal with wage and inflation pressures.
Pay attention to process
Finally, the real value of a plan lies in the process rather than the plan itself.
A five-year plan is limited in at least two ways. First, the relatively short time horizon means that it is almost inevitable that the plan would be a collection of (achievable) goals that the various parts of the government have already set for themselves. It is unlikely to contain much that departs from existing priorities.
Second, because the emphasis of a five-year plan is to come up with specific deliverables, it is unlikely to catalyse a creative (re-)imagination of the future. Five-year plans are usually linear extrapolations of present trends, with targets adjusted marginally upwards to reflect the government’s enthusiasm in new areas – such as artificial intelligence.
Governments often overestimate their ability to change things in the short term but underestimate it over the long term. This bias informs Singapore’s approach to planning. Because much of what a government does on a routine basis is short term, the two main forms of planning that the Singapore government undertakes adopt a much longer time horizon. The emphasis is also on long-term strategy rather than near-term deliverables.

In city planning, for instance, the Urban Redevelopment Authority’s concept plan is reviewed once every decade and covers a time horizon of 50 years. Meanwhile, its master plan guides the city’s physical development over the next 10 to 15 years.
Since the turn of the century, the city state has also embraced scenario planning as a way of thinking (creatively) about the future.
Unlike five-year plans, the main goal of scenario planning is not to come up with a single plan for government with specific goals, targets or KPIs. Neither is scenario planning meant to produce predictions or forecasts. Instead, it is to generate distinct, plausible stories about the future (even if they seem improbable), question long-held assumptions, and surface the challenges and opportunities in the various scenarios.
Unlike five-year plans that are based on a particular view of the future, scenario planning is a much more divergent process that aims to anticipate various possible futures.
More recently, the Singapore government has expanded its capabilities in what it calls “futures thinking”.
It set up a Centre for Strategic Futures about a decade ago to “build a strategically agile public service ready to manage a complex and fast-changing environment”. The centre’s logo, with a black swan embedded, reflects its ambition to develop the government’s foresight and its ability to adapt.
This idea of planning as thinking creatively about the future is about as far as one can get from the world of five-year plans.


Singapore nets US$862,000 from first auction in money laundering case

The cooling trap: how Asia’s air conditioners are making heatwaves worse

What Hong Kong cinema can take away from a popular Chinese war film

Why AI giants are choosing Singapore to turn models into real-world tools

Singapore

Singapore’s blueprint for economic success: plan, but be prepared to adapt

A city view of Singapore on Tuesday. About 80 per cent of Singaporeans live in public housing. Photo: Xinhua

People view a light projection as part of a preview of the Singapore Night Festival in Singapore, on August 19. Photo: Xinhua

Seatrium and Petrobras executives take part in a christening ceremony for the Petrobras FPSO P-80 at Seatrium’s shipyard in Singapore on Thursday. Photo: Reuters

A worker supported on safety ropes paints the facade of a residential building in Singapore on June 29. Photo: AFP

Singapore’s island merger plan fuels nuclear power speculation

A container vessel leaves the Pulau Brani port terminal in Singapore in February. Photo: AFP

Singapore’s Prime Minister Lawrence Wong during the National Day Rally speech on Sunday. Photo: YouTube/CNA

Visitors look at a South Korea-developed innovative small modular reactor model during this year’s International Nuclear Energy Expo in Busan in April. Photo: EPA/Yonhap

Solar panels on the rooftop of the Marina Barrage in April. Singapore aims to reach net-zero carbon emissions by 2050 by expanding solar power and improving energy efficiency. Photo: AFP

Singapore’s future island plan stirs concern over reefs and old fishing grounds

An old photo shows a family’s boat trip to Pulau Seking to get supplies while revisiting Pulau Semakau in 1988 after relocating to mainland Singapore. Photo: Instagram/oranglautsg

Hamzah Mohamad, a 71-year-old Singaporean fisherman, speaking in an interview at West Coast Park about his trade and life as a former islander. Photo: Jean Iau

Storage tanks and oil refineries on Jurong Island. Prime Minister Lawrence Wong said on Sunday the island had shaped Singapore’s economy for over 50 years. Photo: Reuters.

Hamzah Mohamad shows his bubu traps, traditional fishing devices he uses for his catch. Photo: Jean Iau

Singapore’s Lawrence Wong unveils major pro-family measures amid record low fertility

A mother in Singapore feeds her baby in a pram at a park. Photo: Shutterstock

Singapore Prime Minister Lawrence Wong delivers the National Day Rally speech on Sunday. Photo: YouTube/CNA

Office workers at the Raffles Place financial business district in Singapore. Prime Minister Lawrence Wong says in his National Day Rally speech that supporting families remains a national priority. Photo: AFP

Oil refineries on Jurong Island. Singapore plans to create a new island similar to how Jurong Island was built. Photo: Reuters 

Can Singapore’s new anti-scam rules help stop online fraud before it occurs?

People walk past a poster warning of scam threats in the financial business district of Raffles Place in Singapore in September 2025. Photo: AFP

Platforms will have to allow users to silence, filter or block messages or calls from numbers not saved in their contacts, in new requirements set by Singapore. Photo: Shutterstock

Singapore issued a directive to Meta last year to implement measures curbing Facebook impersonation scams. Photo: Shutterstock

A young boy plays with a phone inside a mosque in Putrajaya, Malaysia. Photo: AFP

Singapore relaxes screening of dialect films after Dear You film spurs debate

People take photos with a billboard of the Chinese film “Dear You” during its premiere in Singapore on June 17. Photo: Xinhua

Dear You, a film shot in southern Teochew dialect, has prompted debates for months about Singapore’s Chinese language policy since its release. Photo: Handout

People catch coins from a God of Fortune performer during a performance on the eve of the Lunar New Year at Jewel Changi Airport in Singapore in February. Photo: Reuters

Chinatown in Singapore. The country’s Speak Mandarin campaign is still important for social cohesion, analysts say. Photo: Kolette Lime

This Week in Asia

Opinion

Asia Opinion

External shocks and changing domestic conditions often render plans unfeasible, so being agile is a better policy


External shocks and changing domestic conditions often render plans unfeasible, so being agile is a better policy.


Hong Kong

Expresses the views, ideas and conclusions of the author. (Eg. Enough of Crazy Rich Asians, think of crazy poor Hongkongers.)


.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}External shocks and changing domestic conditions often render plans unfeasible, so being agile is a better policy

External shocks and changing domestic conditions often render plans unfeasible, so being agile is a better policy