Lee Kuan Yew and the Singapore and Philippine experience

THE PRESIDENT GOES TO THE PSE. President Aquino gives a speech at the Ayala trading floor of the Philippine Stock Exchange. He says he hopes the PSE index will breach 10,000 before he steps down from office in 2016. JOAN BONDOC

It was in 1988 when I started reading up on Singapore’s experience in dealing with the withdrawal of the British forces. Since the Philippines had barely four years before the expiry of the Military Bases Agreement with the United States (US), I was concerned that we had no viable and credible alternatives for the bases. I asked if we had researched, studied and documented cases of countries where Americans or British Bases were pulled out and how the host governments coped with the aftermath. And among those that fared well, what strategy did they employ?

We were taught that in any negotiating game, the relative negotiating power is determined not necessarily by resources like wealth, physical strength or military might. In fact, the relative negotiating power of two parties depend primarily on how attractive to each is the option of not reaching agreement   But without any alternative plans, walking out of the negotiating table was not even an option. We were devoid of any negotiating power.

So I looked to Singapore to seek the common denominators of successful conversion stories, and to develop a sensible proposal for the Philippine situation. Here’s what I found out:

In 1967, Harold Wilson’s first Labor government came to the “harsh conclusion that an economically faltering Britain could no longer afford to keep up the pretense of being a global power.” Burdened with deteriorating balance of payments, he decided to dismantle the Bases east of Suez. This, of course, included Singapore and Malaysia, one of the few and expensive vestiges of power in the Far East. There were about 40,000 British troops in Malaysia and Singapore, 26,000 of whom were in Singapore. As reported in the Strait Times, Britain’s fixed assets in both countries amounted to $356 million, and the total land area in Singapore was 6,475 hectares or 10 percent of total land area (certainly a larger proportion compared to the occupied lands by US Bases in the Philippines.) But the rundown of the Bases did not specify the exact date the British would leave but spoke vaguely of withdrawal to be completed by the mid-1970s. So PM Lee Kuan Yew was not too worried despite the eventual loss of $550 million yearly or 20 percent of the gross domestic product of Singapore in 1967-68.

But the events did not happen exactly as scripted.

Britain had decided that instead of half of the troops out by March 31, 1971, all would be gone by that date. Mr. Lee and the whole of Singapore were shocked… Although stung by the British reversal of a previous decision, he would not waste time talking about the British breaking faith.

His no-nonsense approach was a series of rapid fire decisions which included flying to London to persuade Harold Wilson to delay the withdrawal and squeeze the best concessions, immediate buildup of Singapore’s defense forces, and a crash public spending and counter recession measures such as urban renewal, highway construction, new industrial estates, reclamation and inducement of private investments, through loans, guarantees and equity participation to alleviate unemployment and prop up the economy.

“And finally, he created the Base Economic Conversion Department (BECD) focused on a single task to negotiate with the British government on how to overcome the effect of the rundown, plan, allocate, develop the land and other assets including the conversion of the facilities such as the naval dockyard, air bases and workshop for commercial use. He also picked his ablest civil servant to head the department, to signal the highest priority he was giving the problem.”

Following my resolution in Congress, an Executive-Legislative Bases Conversion Council was formed, headed by then UP President Jose Abueva. The Council’s product “Kumbersyon” became the basis of the Bases Conversion Plan under R.A. 7227.

Divergence, parallelism There are differences and similarities between Singapore’s experience and the Philippine situation. The impact of the loss of benefits from the bases while significant in both cases was far more worrisome to Singapore.

They represented 20 percent of gross domestic product. In the case of the Philippines, the contribution to the economy is less than 5 percent. While 60,000 workers in the Philippines might be affected, and only 32,000 were involved in Singapore, the latter represented a far more significant proportion to its population. While the Philippine Bases payroll represented the second largest next to the Philippine government, the anti-bases sector is quick to point out that the workers employed in the bases comprise hardly 5 percent of the workers in Philippine government and is even less than 1 percent of the total non-agricultural workers. Thus, the specter of massive unemployment loomed larger in Singapore, especially for 9,000 who needed to be re-trained for alternative employment if they were not to go on dole.

Success story

As it turned out, Mr. Lee was perhaps too pessimistic. The final statistics showed that of the 30,000 affected by the British pullout, about 8,000 were non-citizens who went home to Malaysia and India. About 4,000 retired and lived on their retrenchment money or with relatives. Of the balance of 17,000, many were skilled who easily found jobs elsewhere or with the ANZUK (Australia-New Zealand-United Kingdom) Defense Command and the Sembawang Shipyard. Economically, it sustained a growth rate of 12 percent to 17 percent throughout the period of withdrawal. Heavy investment by American, German, Japanese and other corporations even caused shortage of skilled labor. The Vietnam War also helped. Traffic of commercial shipping bringing supplies to Vietnam went through Singapore. Much later, even the instability in the Middle East helped. The ship repair business improved as a result of damaged ships and tankers caused by the mines in the Persian Gulf.

Key lessons

The lessons from successful conversion stories in Singapore and elsewhere tell us that we don’t have to reinvent the wheel. The facilities are best suited for what they were intended for and used in the first place. Thus, even in Thailand, the biggest American naval base in Sattahid, South of Pataya, was leased and managed by the American President Lines for use of Sea Land as a container port with rail connections to Bangkok. New uses took the form of municipal and aviation airports, commercial seaports, industrial parks, research and service activities, technical schools, colleges and universities. And, usually, small portions are held back for military related uses.

In Subic and Clark, the military airports were used by FEDEX and the Diosdado Macapagal International Airport and the Philippine Air Force. The seaport is used for commercial container cargo and bulk shipping. Large land area with water frontage is now a commercial shipyard. And the schools and hospitals now cater to civilian clients. Big open spaces were converted to industrial parks, and leisure and sports facilities merely switched from military to civilian clientele.

To date, Subic Freeport locators now employ 97,000 workers, excluding those of Subic Bay Metropolitan Authority (SBMA) and government agencies, while Clark Development Corp. locators employ 85,000 for a total of 182,000 workers and employees compared to 60,000 employed by the US Navy and Air Force at the height of the Vietnam War.

Unlike before when female workers were concentrated in the entertainment businesses outside the bases, there is now equal opportunity for male and female workers in factories and commercial establishments.

Exports have earned $2.3 billion for Subic and $4.75 billion for Clark, more than enough to compensate for the aid and compensation from the United States for the use of the bases.

(This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines. The author was a three-term representative of the First District of Bataan. He was also Chair and administrator of the SBMA and subsequently, Chair of the Bases Conversion Development Authority. He is currently Chair of the Board of Trustees of the University of Nueva Caceres. Feedback at [email protected] and [email protected]. For previous articles, please visit www.map.org.ph)