Good morning, Minister, Ambassador and friends.

Last month, I chaired a discussion at a UNESCO conference in Paris. Sharing his perspective on how to solve the inequalities arising from robust economic growth, a speaker from Africa had this to say: “if everyone is poor, no one is miserable….”

Quite an innovative solution, indeed.  But try telling this to someone who hasn’t had a meal in 5 days, or is struggling to feed his family.

Economic growth and wealth – they are not a bad thing, in themselves.  In fact, they are necessary for sustained livelihood, for progress, for survival.  Yet, they can be the proverbial “root of all evil” IF contaminated by GREED.

This is why there are poor people not only in poor countries.  There are increasing numbers of poor people in rich countries.

Several years ago, while on the road in Mumbai, India, I saw colonies of street-dwellers – literally scooping water from the drain.  This was just outside the opulent 26-storey house of Mukesh Ambani, whose net worth at the time was in excess of $40 billion!

At an individual level, greed blinds us to what makes us ugly.  But when greed is institutionalized on society – it can blind our collective conscience, legitimize rationalization and counter the benefits of economic growth to society.

That’s when you get dysfunctions such as this:the richest 3% in the USA owning more wealth than the bottom 95%where a company such as General Electric (GE) lays off tens of thousands of workers, yet paid its top 3 executives $550 million in 2000 where in a 2013 survey of employees in the financial sector in the USA, 24% of the respondents said they would engage in insider trading to make $10 million if they could get away with it!

This problem is pronounced in corporate America, but it has had an epidemic effect on the rest of the world, including Communist China.

It’s been argued that the celebration and global propagation of extreme capitalist doctrines sparked the raging blaze.  Economist and Nobel Laureatte, Milton Friedman forcefully evangelised unbridled capitalism in the 1970s.  He became a global change agent and was labeled by the likes of the New York Times as, “the most consequential public intellectual of the 20th century.”  And this is what Friedman espoused in his seminal New York Times article published in September 1970: “…any business executive who pursued a goal other than making money is an unwitting puppet of the intellectual forces that have been undermining the basis of free society…discussions of social responsibilities are notable for their analytical looseness and lack of rigour….” I remember watching Friedman on TV in the 1970s as an impressionable young boy, delivering the inaugural Singapore Lecture.  He was God!

Yet, all is not lost.  There have been highly credible voices whose alternative perspectives have gained or regained traction, as the case might be, in the wake of the expose of a series of shameful fraudulent and exploitative acts by large corporations especially in the financial sector in the past decade.

Economist Peter Drucker stands out among these voices of reason.  He has always argued for the primacy of the customer and not the shareholder (as Friedman did) in assessing success in the corporate world.  This, he says, ensures greater corporate accountability.  Even though he argued for this as early as 1973, it gained traction and was appreciated more recently, with globalization and the advent of the internet.  Power has become a lot more asymmetrical.

A whole set of new organisations responded by doing things differently.  Apple, Amazon, Ali-Baba, Li & Fung, Zara are just some of them who focused on delighting customers rather than solely focusing on shareholder value.  There’s also been renewed emphasis on social responsibility and transparency.  This different way of managing has turned out to be hugely profitable, yet mitigating the lure of greed.

So, it would appear that Economic Growth and Wealth Accumulation are not a bad thing at all.  In fact, they are necessary.  What is important is to find effective ways to tame the animal that feeds us.

Here are 3 important questions for us to consider:

How you achieve economic growth?  [The means are as important, if not more important that the end.]

What do you do with the outcome of growth?  [Whether it is distributed equitably, not necessarily equally to promote mobility and inter-generational mobility.]

Can we develop a built-in “Greed-Theromostat”?  [Whether there are enough checks and balances, factoring cultural and social conditions and bias.  Whether the education system is accessible, robust and all-rounded mitigating against cognitive bias, especially in those in leadership positions.  Whether there are alternatives avenues for talent and energies to be channeled – other than bottom-line driven corporations – such as social enterprises.]

It’s also important for us to examine the impact of economic growth on society – the nature of society, and the role the government ought to play in not only catalyzing economic growth but managing the negative externalities.

These are the key issues that I hope we will be able to address/discuss in our panel discussion.  The topic is: “Growth – the good, the bad, and the ugly.”

Read more about the St Gallen Symposium Singapore Forum here.

 

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