Transcript of remarks by PM Lee Hsien Loong at the World Bank Human Capital Summit Dialogue with World Bank President Dr Jim Yong Kim, in Bali, Indonesia, 11 October 2018.
Moderator: Prime Minister, Singapore does very well in the Business Report and it has made it to the top of the list of the Human Capital Index. Congratulations. As a fellow Singaporean that makes me very proud. Prime Minister, looking at how Singapore first started, back in the years of independence, nothing like how it is today. Was this the plan from the beginning? How did you do this? it’s been a remarkable accomplishment, by any standards because at independence just 50 odd years ago, so how did you do it?
PM Lee Hsien Loong: We got some things right at the beginning but we cannot pretend to have forecast everything else. We started off at quite a difficult position. The population was poor. The housing conditions were abysmal. Health was not good, tuberculosis was endemic. We had cholera epidemics every now and again and the birth rate was very high. These were post-war baby boom years. In the early 1960s, the Singapore maternity hospital, where I was born, was the most productive maternity hospital in the whole world. For the government confronted with all this, the first priority was just to get your head above water, and that meant get the population housed, build schools for the kids, have a family planning programme so that you get the birth rate under control, have public health services provided such as stand pipes, so that people could have clean and fresh water to wash in and drink, and to cook with and to have maternal and child health clinics so that the children can be inoculated and the mothers advised how to look after them and you get everybody to first-base level. That took us a certain distance. But after that we had to make major steps in healthcare. One of the things which we got right, right from the beginning, was to say that, “We will subsidise you. The State will pay, but you have to have a personal responsibility element. It should not be free. You have to co-pay. So one of the first things the Government did upon being elected was to start charging for prescriptions. Because otherwise, the patient is given medication, he goes home, in two days he does not feel better and he throws it away. He comes back again – another packet of pills. So we said, “You just pay one dollar.” He can afford it but it just means you would take it seriously. We have kept that principle, so that in the healthcare system, we expect people to pay some part towards the cost. Actually, many years later, we made a scheme of compulsory health savings so when you work, some proportion of your income – 6, 7 or 8 per cent – depending on your age and your income, goes into Medisave account. It is your personal account, you can use it when you get sick and go to the hospital, it helps to pay your hospital bills, you can use it if you have cancer, you can use it for chemotherapy or expensive treatments. and it inculcates a sense that this is your money, please spend it carefully. So on the user side, we never gave it away. On the supplier side, the government is very much prominently there. We have not left it just to the private sector. We used to run the government hospitals. They ran like government departments in the old days. They had no idea what it was costing them to run. It wasn’t their job to know. Their job was just to treat patients. But if you are running the system, that is not a good arrangement. So we changed them, to make them not-for-profit outfits, autonomous, self-accounting, not-for-profit, but bottom-line conscious. And in that way, you get efficient healthcare. And at the same time we are able to control the impulse of for-profit hospitals to up the treatment cost so as to make more money.
Moderator: Looking to the future, PM, so far Singapore has done remarkably well. There is no question about that. But do you feel that the job is done? For the future generation, how do you continue to invest in human capital, because will the same things keep working?
PM Lee: The job is never done. You reach a new level. There are new expectations. New challenges arise. For example, we have a reasonably good education system now, but one of the things we are focusing on is to pay a lot more of attention on pre-school education. Because children come at the age of 6, at different levels. Some able to read. Some able to write. Some barely literate or able to recognise the alphabets at all. We want to bring everybody to a good starting point, as early as possible in life, regardless of whether you are rich or poor, whether your parents were advantaged or disadvantaged and that is a major area of focus, which would take us quite a number of years. With healthcare we also have to focus on quite a number of things. Hospital treatment is important, but you do not want everything to happen at the hospital. We need to look at step-down care. Because particularly with old folks, when they are ill, they are ill for a long time, but they may not need very high-tech medication. They just need to be well looked after, and be able to convalesce and recuperate, and be in the community as well. We have to provide the step-down care facilities and we have to provide the incentives to stay healthy, fit and active - active ageing. So we have old folks in the 70s and 80s who are learning to dance ballet and not doing badly. They are much the happier and healthier for it.
Dr Jim Yong Kim: Well, I went to Singapore and I specifically asked Prime Minister Lee to be on this panel and he was very reluctant to. But I will tell you why I asked him. When I went to Singapore, I spent an entire day studying the healthcare system because I could not believe they were getting the outcomes that they were getting, and just spending 4 per cent of GDP. And then, Prime Minister Lee corrected me – and he did it again back stage – he said “No, it is 4.6 per cent.” But you know, the US spends approximately 19 per cent of GDP, most of the Europeans countries spend 10 to 12 per cent. China is already at 5 per cent of GDP, and so to be able to get those outcomes at 4.6 per cent was just stunning to me. I could not believe that that was happening. But I think the reason I asked Prime Minister Lee, was because every time I talked to him, he gives me this kind of detail. I think that is what is going to be required. Leaders have to get into the details of what works in healthcare, what works in education and annual ranking that causing newspapers to respond and opposition parties to question. This is the level at which we need to have the discussion because going into the future with 38 to 39 percent of children stunted with poor education outcomes is a recipe for disaster. I felt that it was literally the moral and ethical responsibility of the World Bank to review this relationship between investing people and Economic growth, so people could not say we did not know. From this day forward, we are making it clear, if we do not do this, we are not just short changing the individual, what you are doing is setting your country up for instability and the inability to compete in the future.
Moderator: So Prime Minister Lee on that point, given the fact that Singapore has such remarkable success, what would your advice be, for those in the audience, the finance ministers who want to replicate your success and those watching us online as well, to be able to replicate Singapore’s success story.
PM Lee: I think the first starting point for the government must be that we want to improve lives for all of the population. Not just for some of it or for the successful ones, but for all of the population, across a wide range because if you do that then as their basic lives improve, they have control over their lives and they have a roof over their heads and they can start thinking about their future, and what they want their children to be. Then you can talk about public health, then you can talk about improving and optimising your healthcare system. Then we can talk about having a good education system and the parents are supporting it. From that, you have more growth, more prosperity, and we can make further progress, with our social services. But you have to have that desire to make the benefits go very broadly and then people have an incentive to improve themselves and their children.
Moderator: Dr Kim, your sense of how you think this will be received amongst people in countries who are trying to replicate this success and get further up that ranking. ‘
Dr Kim: Well I have to tell you there were some countries that did not want us to do the ranking. I am very grateful to my Board because they were supportive. They were supportive not because they knew where going to be on the ranking. We were able to convince them that the relationship between these investments and economic growth is so clear and it may be one of the most powerful correlations of what we know of in terms of what you invest in and what you get later, in the context of the rapidly changing technologies which are eliminating some jobs but also definitely changing the skills required for the jobs that are being created, because we know all that, the Board fully supported the release of the ranking. I have said this before. I think every World Bank President probably gets one ranking in their tenure so this is the one I chose, because we have to bring everyone’s focus on this particular issue because we will fall prey to short-termism and not thinking enough about how critical this is to build foundation growth.
Moderator: Investing in human capital is so apparent and it is the way countries need to prepare for the digital future. Thank you so much gentlemen for joining us for this discussion. It is really a privilege and a pleasure.
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