NITI LECTURES
TRANSFORMING INDIA
LECTURE 1
FULFILLING INDIA’S POTENTIAL IN THE GLOBAL ECONOMY
THARMAN SHANMUGARATNAM
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Cover
If India is to meet the challenge of change, mere incremental progress is not
enough. A metamorphosis is needed. That is why my vision for India is rapid
transformation, not gradual evolution.
Transformation of India cannot happen without a transformation of governance.
A transformation of governance cannot happen without a transformation in
mindset. A transformation in mindset cannot happen without transformative
ideas.
The purpose of the ‘NITI Lectures: Transforming India’ is to usher in new ideas
from across the globe. It is a series which we will attend, not as individuals but as
part of a team that can collectively make change happen.
Prime Minister of India,
Shri Narendra Modi
Cover Inside
Page 1
FOREWORD
It is with great pleasure that I
introduce
“NITI
Lectures:
Transforming India”. We launch this
lecture series with the highly
successful lecture - 'Fulfilling India’s
Potential in the Global Economy' - by
Mr.
Tharman
Shanmugaratnam,
Deputy Prime Minister of Singapore.
The lecture series has been launched
on the advice of the Prime Minister of
India who is also the Chairman of the
NITI Aayog. The immediate audience
of the lecture is the top policy making
team of the Government of India
including members of the cabinet and
several top layers of the bureaucracy.
The wider audience, of course,
includes the Indian public. The
purpose of the lecture series is to
bring
cutting
edge
ideas
in
development policy to Indian policy
makers and the public, so as to
promote the cause of India’s
transformation into a prosperous
modern nation. As the Prime Minister
noted in his inaugural address,
transformation of India cannot
happen without transformation of
governance and transformation of
governance requires transformation
of minds.
Aayog, we fully share this sentiment.
We further believe that this
transformation must be driven by well
thought
out
policies
and
programmes. This is why the present
lecture series is of critical importance.
We have been lucky to have as
distinguished
a
speaker
as
Mr. Shanmugaratnam deliver the first
lecture in this series. This lecture was
originally presented under the title
“India in the Global Economy” but has
been retitled to better reflect the
content in this written version at the
suggestion of the author.
This lecture has been an unqualified
success. All those present at the
event uniformly applauded it. And it
has since been widely viewed on the
worldwide web. I hope readers will
have as much pleasure reading the
lecture as those of us, lucky enough
to have been present at the original
event, had listening to it.
Arvind Panagariya
Vice Chairman, NITI Aayog
October, 2016
The Prime Minister has further stated
that the time for incremental change
is now past us. Instead the time has
come for a big jump. At the NITI
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Page 3
THARMAN SHANMUGARATNAM
Deputy Prime Minister and Coordinating Minister for
Economic and Social Policies, Singapore
Mr. Tharman Shanmugaratnam is the
Deputy
Prime
Minister
and
Coordinating Minister for Economic
and Social Policies in the Singapore
Cabinet.
He is also Chairman of the Monetary
Authority
of
Singapore
(MAS),
Singapore’s central bank and financial
regulator.
He has spent his career in public
service, in roles related to economic
policy and education. He served as
Minister for Finance for eight years,
over 2007 - 2015, and as Minister for
Education for five years, over
2003-2008. He was appointed Deputy
Prime Minister in 2011.
economic and financial policy-makers
and academics.
He entered politics in 2001 as a
candidate of the People’s Action Party,
and has successfully contested for a
seat as Member of Parliament for
Jurong GRC since then.
Mr. Shanmugaratnam did his schooling
in
Singapore,
before
studying
economics at London School of
Economics, and Cambridge University.
He later obtained a Master’s degree in
Public
Administration at Harvard
University, where he was named a
Lucius N. Littauer Fellow in recognition
of outstanding performance and
potential.
Among
his
several
current
responsibilities, he chairs the Council
for Skills, Innovation and Productivity
(CSIP), which seeks to develop skills of
the future among Singaporeans, foster
a culture of innovation and lifelong
learning,
and
support
productivity-driven growth.
Mr. Shanmugaratnam was appointed
by his international peers as Chairman
of the International Monetary and
Financial Committee (IMFC), the key
policy forum of the IMF, for an
extended period of four years from
2011, and was its first Asian chair. He is
also a member of Group of Thirty, an
independent global council of leading
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FULFILLING INDIA’S POTENTIAL
IN THE GLOBAL ECONOMY
HIS
EXCELLENCY
SHRI
NARENDRA
MODI,
PRIME
MINISTER OF THE REPUBLIC OF
INDIA,
CABINET
MEMBERS,
SENIOR CIVIL SERVANTS AND
DISTINGUISHED PARTICIPANTS,
INAUGURAL NITI LECTURE ON
‘TRANSFORMING INDIA’ BY
THARMAN SHANMUGARATNAM,
DEPUTY PRIME MINISTER AND
COORDINATING MINISTER FOR
ECONOMIC AND SOCIAL
POLICIES, SINGAPORE,
ON 26TH AUGUST 2016
IN NEW DELHI, INDIA
1. Let me first say what a privilege
it is for me, coming from
Singapore, to be giving this
inaugural NITI Lecture. I have been
advised to be frank, in order to be
useful. But I must emphasise at the
outset that everything that I have
to say, is said as a friend, and
Singapore counts India as one of
its closest friends.
RECASTING
NARRATIVE
THE
GLOBAL
2 We are at an unusual time in the
world. It is a time of promise, but
also a time of pessimism.
3. Much of the advanced world is
mired in pessimism. Europe and
Japan have serious structural
problems that they are trying to
overcome, without much success
so far. The United States is doing
better,
but
labour
force
participation
and
median
Page 6
household incomes in the US are
still lower than where they were
before the 2007 crisis. China, for a
long
time
the
world’s
outperformer, is now going
through difficult restructuring, and
seeing a sharp decline in private
investment growth.
4. But it’s not just pessimism over
growth. We are seeing a new
mood of distrust within society,
and a mood of distrust against the
rest of the world. In the US, in the
1950s, they used to speak of “we”.
Today, it is “us” and “them”.
5. It’s a mood that comes at least
in part out of prolonged income
stagnation, and in Europe, an
extremely
high
rate
of
unemployment amongst youth.
6. But there has been nothing
inevitable in this, and it’s certainly
not an inevitable outcome of
globalisation. It reflects cumulative
failures in policy.
7. There is no place in Asia for
growth pessimism and this
negative
narrative
about
globalisation.
We
have
tremendous opportunity ahead of
us. To open up, to integrate our
Page 7
economies, and to achieve growth
that
is
inclusive,
enabling
broad-based prosperity for our
people.
8. India is uniquely positioned to
recast the global narrative, by
achieving broad-based prosperity
through a deeper strategic
interaction
with
the
global
economy.
9. India’s own needs require this.
India needs to grow by over 8 per
cent over the next 20 years if it is to
create jobs for a youthful
population; reduce its extremely
high degree of underemployment;
and achieve inclusive growth –
including a significant shift of
people from the lower income
group to the middle income group,
just as China achieved.
10. But India is uniquely positioned
to recast the global narrative
because it is also an open society.
It is a constitutional democracy,
and with a diverse population.
India can show how it is possible,
with an open society and an open
economy, to achieve not just rapid
growth, but inclusive growth for its
people.
Page 8
OF
do less in some areas, and do
more in other areas.
enterprises. It will help markets to
work in the interests of society.
11. This potential is within reach.
But it cannot be achieved without
significant changes. It cannot be
achieved on current day policies. It
requires, as Prime Minister Modi
just said, ’rapid transformation, not
gradual evolution’. It requires bold
and accelerated changes to free
up India’s economy, and to invest
in its people.
16. It has to withdraw from the old
roles of the State – economic
regulation, and ownership and
management of enterprise. Those
roles restrain private investment
and job creation. They also
preserve incumbents, the existing
players, at the cost of allowing
new players to grow.
20. It also means, in each of these
fields, a new way of doing business
in government – what the world
now recognises as the “Modi Way”:
actions, not just ideas and
promises.
THE
NEW
AMBITION
GOVERNMENT
12. The challenge is less about
ideology today than about legacy.
A legacy of the sheer weight of
laws and rules, of bureaucracy,
and of vested interests in society.
India has to tackle that legacy
decisively to fulfil its potential.
13. It does not mean smaller
ambition in government. It means a
different ambition.
14. Put in the broadest way, India
has
over-intervened
in
its
economy, and under-invested in
social and human capital. The
government has
over-reached
itself in regulating the economy,
and under-invested in social and
human capital.
15. To achieve India’s potential, the
government will therefore have to
17. But it’s not just about what you
do less of, but what you do more
of – the new ambition that must
inspire and energise the state.
18. India has to invest in social
mobility, and in developing the
skills and abilities of its people to
their fullest potential. It has to
invest in inclusive housing and
cities. It has to build a first rate
infrastructure,
both
through
private and public investment. And
it has to foster, innovative
capabilities – the ecosystem that
will
help
companies
and
individuals make the most of new,
technology-driven opportunities in
the global economy.
19. This new ambition of
government will help unleash the
energies of individuals and
21. To borrow what Prime Minister
Modi has said recently: “Reform,
Perform, Transform” has to be the
mantra in every field.
A RACE AGAINST DEMOGRAPHY
AND INTELLIGENT MACHINES
22. There is need for much greater
urgency. But the urgency to tackle
long-standing problems does not
come naturally in politics, and
particularly in larger and older
societies.
23. The problems that I described
in the advanced world have come
about precisely because solutions
have been repeatedly postponed,
and problems have been allowed
to grow larger – in education, in the
labour market, or in the pensions
crisis that grows by the day.
24. Singapore had no choice but to
act with urgency, from the time we
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became an independent nation.
We could not otherwise have
survived. To survive, and to be
relevant to the world, we had to
keep improving, and each time we
reached
a
new
level
of
achievement, we had to look to the
next. If we aimed to just get by, or
to be average, we would have
been irrelevant very quickly.
We’ve had no choice but to do
everything we do well, and where
possible exceptionally well.
25. But that’s Singapore, a small
city state that became a sudden
nation, with no natural resources
and no natural source of water or
energy. India is a vast nation, with
immense inner strengths that
derive from its history. You don’t
have the same existential threat.
26. But India too, needs a sense of
urgency. You are in a race against
demography, and a race against
intelligent machines.
27.
You
have
to
provide
opportunities quickly for a very
large youthful population that has
entered working age or will soon
do so. And India like other nations
will have to act soon to avoid a
technological divide in its society.
Page 10
28. Wherever we are in the world,
we have to act now to equip our
people with new skills. We must
pre-empt a major displacement of
jobs by new technologies, and
instead
take
advantage
of
technology to improve the quality
of
jobs,
enabling
higher
productivity and better incomes
for the broad majority.
29. India also has to act with
urgency because it still has acute
shortfalls in achieving basic human
needs. There has been significant
progress in the last 25 years, and
momentum in the last few years.
But there are still large shortfalls –
clean water, sanitation, electricity,
housing, basic healthcare and
social security. It is a huge social
challenge.
30. Achieving over 8 per cent
growth over 20 years is therefore
not a luxury. India, which had the
same per capita income as China
in the mid-1970s, now has almost
two and a half times less per capita
income than China. Even with 8 to
10 per cent growth, even as you
achieve a catch-up while China
slows down, it still means, in 20
years’ time, India having just 70 per
cent the level of per capita income
of China then.
31. There’s no reason why India
cannot erase the social and
economic deficits of the past. It
has the largest unfulfilled potential
of any country that I know of.
32. But India needs a sense of
urgency in politics and society, in
government and amongst its
people, to achieve this potential.
33. The reforms are underway, and
there is impressive progress in
some areas. You have the world’s
first
digital
and
biometric
identification
infrastructure
in
Aadhaar, which will soon have
reached
the
entire
adult
population. The passing of GST
legislation, the new monetary
policy framework, the cleaning up
of bad debts in the banks and the
simplification of bankruptcy law
have been major advances. Your
infrastructure plans are now
moving at a faster pace –
especially highways and roads,
railways,
energy
(including
renewable energy), and ports.
34. But the reform agenda is still
largely unfinished, and the pace of
change has to be stepped up.
Rapid transformation, not gradual
evolution, to repeat PM Modi’s call.
You’re on a good batting wicket.
But you can’t continue scoring
singles. You have to go for fours
and sixes in every over, and go for
a century in every other innings.
That’s the only way India’s going to
achieve its potential in the next 20
years, and avoid severe social
tensions and vulnerabilities arising
from mass underemployment.
WHY INDIA’S PER
INCOME FELL BEHIND
CAPITA
35. Why have India’s levels of
productivity and per capita income
fallen behind China and several
other countries in East Asia? How
can more rapid growth be
achieved in future? And what will
lead to prosperity being broadly
distributed among the population?
36. First, India has not been geared
to exporting to the world. That’s a
major shortfall in its economy,
compared to several East Asian
nations. India has 18 per cent of the
world’s population, but less than 2
per cent of the world’s exports.
Your exports per person are only
one-fifth the level seen in China or
Vietnam.
Page 11
37. Second, there has been very
limited shift of people out of
low-productivity agriculture.
38. Third, there has been very little
growth in formal jobs in the
economy. India has far fewer of its
working people in the formal
economy than any other major
economy does. Less than 20 per
cent of India’s people are
employed in the formal economy.
It holds back productivity growth
and improvement in skills, and the
regular pay increases and chance
of progression that comes with
that.
39. Fourth, you have few large
firms. You have some exceptional
firms, but the gap in productivity
between the large firms and the
mass of small firms is extremely
wide in India. It’s not a problem
unique to India, but it’s much
sharper in India than in most other
economies – this gap between the
leading firms and the rest of the
economy,
in
productivity,
technology,
management
knowhow, and the skills of the
people employed.
40. We know the reasons why:
India’s employment laws and land
Page 12
acquisition laws discourage firms
from employing more people and
becoming larger. What it amounts
to at the end of the day is
anti-employment
legislation.
You’re protecting the 10 to 20 per
cent of people in the formal
economy at the expense of the 80
per cent without formal jobs.
deficits and current account
deficits, or about which country is
gaining and which country is losing
in a zero sum game.
41. It’s not just bad for growth, it’s
also inequitable.
46. It’s not fundamentally about
demand – i.e. about domestic
demand versus external demand.
It is productivity growth, which is
what drives long-term growth, not
demand. So the real logic of
opening up to the world is not the
demand side logic but the supply
side logic.
42. These four problems are in fact
inter-related: the lack of an export
orientation; the limited shift out of
agriculture into manufacturing and
services; the lack of formal job
opportunities; and the gap in
productivity between the small
number of large firms and mass of
very small firms.
THE REAL LOGIC OF OPENING
THE ECONOMY
43. So what are the reforms that
are required? I can only suggest
some of the broadest shifts here.
44. First, India must go for a deeper
strategic interaction with the
global economy. And I use the
word strategic for a reason. It’s not
just about the calculus of trade
45. This is about a deeper strategic
interaction
with
the
world
economy that will bring a new
dynamic within India, the dynamic
of continuous improvement.
47. It’s about constant learning and
the discipline of constantly
adjusting to the latest in best
practices. Every time a buyer
sends new specifications to the
factory – something different, or a
little more sophisticated, or
customised to a new group of
customers – there’s adjustment.
It’s
about
installing
new
technologies, but much more than
that. It’s about management
knowhow, in supply chains, finance
and HR systems, and in tracking of
competitors globally. And not just
the explicit knowledge, but the
tacit knowledge that comes from
participation in the world economy
and, is continuously accumulated.
48. It’s about the discipline of
dynamism
–
the
relentless
learning and updating, and the
continuous attempts to leapfrog.
That is the real logic of opening up
to the world.
49. That logic of opening up is
there even if the world is growing
slowly. First, India’s very low
presence in world export markets,
at less than 2%, provides space to
grow by competing for market
share. Vietnam and some other
emerging players have gained
market share as labour-intensive
manufacturing shifts out of China.
50. The second point is more
fundamental. For any given level
of demand, you can either have
high exports and high imports, or
low exports and low imports. But
the big difference between the
two alternatives is this discipline of
dynamism, the constant learning
that comes from interacting with
the world.
51. That learning amongst firms,
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amongst individuals, and in
government itself, is the real
benefit of opening up our
economy to the world. And it’s a
discipline where India will not just
be a follower, but has the potential
to be a leader in several fields.
52. India has come a long way in
opening up its economy in the last
25 years. But it needs a much more
concerted push in the next phase
of this journey. ‘Made in India’ has
to be ‘Made in India for the World’.
And if you can compete in the
world, you will be able to compete
in an open Indian market.
53. It cannot be a half-hearted
strategy. It also cannot be a
strategy, which I know is
sometimes proposed, where you
have both an export orientation for
some products while retaining
tariffs aimed at import substitution
in other products. It doesn’t work
that way anymore, because the
whole way in which production is
being organised in the world
today, in global value chains,
involves
a
complex
interconnection between exports,
imports of inputs and domestic
supplies. It is a complex and deep
interconnection
that
defines
Page 14
supply chains
economy today.
in
the
world
54. Take China. After China entered
the WTO in 2001, it brought down
import tariffs. But when import
tariffs were brought down, the
result was a paradoxical one.
Chinese exports ended up having
more domestic content as a result
of
this
liberalisation.
Why?
Because
domestic
suppliers,
including a new set of domestic
suppliers, were able to take
advantage of cheaper, better
quality imported inputs to gain
competitiveness and grow. So it’s a
paradoxical result – import tariffs
went down, and domestic content
of exports went up. But it’s not an
accidental outcome. That is
precisely the logic, the supply side
logic, of opening up to the world.
55. Opening up to the world is
hence not a zero-sum game. It’s
not about one nation’s gain at
another nation’s expense. At its
heart, it’s about constant learning
and
innovation
that
takes
productivity and incomes up.
56. But you do have to move
quickly. Technology is evolving
rapidly. Within 10 years, even in
developing countries, job creation
will be much more challenging.
Intelligent
machines,
artificial
intelligence and big data would be
able to do many of the tasks that
are done by human beings today,
both
in
manufacturing
and
services.
57. But if you move today to get
into the global value chains, you’ll
be able to get onto an escalator of
skills that will allow you to take the
most advantage of these new
technologies, to create new jobs.
We have to get onto that escalator
today, get into global value chains
in both manufacturing and modern
services.
58. India does not lack capabilities.
If you look at this year’s Forbes’
‘100 most innovative companies’ in
the world, three of them were
Indian companies – Hindustan
Unilever, TCS (Tata Consultancy
Services) and Sun Pharma.
59. And there are many other
highly innovative companies. They
are often competitive not just
because of what they are doing in
India, but globally. Sun Pharma has
70 per cent of its revenues from
outside India, mainly the United
States. Mainly in speciality generic
drugs. It produces in 26 countries,
although it is anchored in India.
60. We see that culture of
innovation and excellence in
several fields in India. Take
medical care – you have in India
some of the highest quality
medical care at a fraction of the
cost of the advanced world. Places
like Narayana Institute of Cardiac
Sciences, or the Christian Medical
College (CMC) in Vellore with its
first-rate academic health system.
The
National
University
of
Singapore’s medical school and
hospital
system
collaborate
actively with CMC in Vellore in
education and research.
61. We have to spread the culture
of the leading and most innovative
players to the rest of the field. This
culture of learning by doing, and
taking
leaps
forward
that
eventually makes you a leader.
INTEGRATING
INDIA
CHINA AND ASEAN
WITH
62. There is also a great deal more
potential for integrating our
economies in Asia.
63. Between Asean and China,
Page 15
there’s
a
high
degree
of
interaction. But links with India are
much weaker. The total trade
between India and China is only 3
per cent of the trade of India and
China with the world. And the total
trade of India and Southeast Asia is
only 4 per cent of their total trade.
64. There is therefore opportunity
to develop much stronger links
between India and Southeast Asia,
and India and China – both through
higher exports and higher imports,
and with FDI flowing in both
directions.
65. And remember, Asia is very
likely the biggest source of future
growth in the global economy. We
have to take advantage of it, and
spur that growth through the
supply-side dynamic that comes
from integrating our economies.
WHAT NEW AMBITIONS FOR
GOVERNMENT?
66. What is the new role of the
government? What are the new
ambitions that must energise
government?
67. In the economic sphere, the
government’s new role has to
Page 16
focus
first
on
promoting
capabilities and skills that enable
the whole economy to be
competitive. It’s about working
with industry, coordinating within
each industrial cluster and supply
chain, so as to speed up the
spread
of
know-how
and
technologies employed in the
leading players to the rest. It’s
about learning from big firm to
small, foreign and local. Again, it is
a supply-side emphasis.
68. But it is also fundamentally, not
just about economic policy. There
is no strong economy and no
strong nation without a strong
society, as PM Modi has
emphasised.
69. Above all, India’s biggest deficit
lies in education, and in the
unfulfilled potential of its people.
Major reforms are needed to
achieve that potential.
INVESTING
YEARS
IN
THE
EARLY
70. First, a focus on social mobility.
It is a challenge all over the world,
and an especial challenge in India.
And if it is one thing we have learnt
from the last 50 or 60 years of
experiments everywhere in the
world, to tackle inequities in
education, we have to start as
early as possible in a child’s life. In
fact, we have to start before birth,
with
the
mother.
Pre-natal
interventions, interventions at
childbirth, interventions in the first
18 months are critical, followed by
quality preschool opportunities as
they grow.
71. There are some experiments
taking place in India, some already
giving good results. One example
is an initiative in Madhya Pradesh. It
is part of your Integrated Child
Development Services, developed
through the village level, child and
mother-care
centres,
or
Anganwadis. Just to show what’s
possible – in just four years, from
2005 to 2009, the percentage of
underweight children came down
from 60 to 48 per cent. The
percentage of children with
stunted growth came down from
49 to 38 per cent. I’m sure there
has been further progress since
then; I don’t have the data beyond
2009. But it shows that much can
be achieved through village level
interventions, with mother and
child, as early as possible.
FIXING THE SCHOOL SYSTEM:
ORGANISATION,
INCENTIVES,
CULTURE
72. After the early childhood years,
it is schools that are critical in
developing
the
long-term
potential of a country. I have to say,
and I would like to repeat I say this
as a friend: Schools are the biggest
crisis in India today, and have been
for a long time. Schools are the
biggest gap between India and
East Asia. And it is a situation that
cannot be justified.
73. Some 40 per cent of students
drop out before finishing upper
primary school. Another 20
percent or so drop out before
completing
upper
secondary
school. There’s a shortage of
700,000 primary school teachers,
and among those recruited,
absenteeism is endemic. A large
proportion of schools do not have
functioning girls’ toilets. Only three
quarters have access to clean
drinking water.
74. So it was not surprising that
when India took part in the OECD’s
‘PISA’ study in 2009 – which tests
students in Mathematics, Science
and Problem-solving – it was 73rd
out of 74 countries. India opted not
Page 17
to take part subsequently.
75. And this, in a country which has
exceptional talent. The people
who go to your IITs and IIMs, and
lead companies all over the world
are first-rate. I have spent many
years working in education, and
India has the biggest gap I know of,
between the talent at the top and
the unfulfilled potential of the rest
of society.
76. These are things which can be
fixed. It is not, by the way, about
ever
increasing
budgets.
Singapore for example does not
have a high education budget by
OECD standards, but we end up at
the top or near the top of the OECD
PISA tables.
77. It is about a new system of
governance in education –
organisation,
incentives
and
culture. How do we recruit our
teachers? How do we train them
up? How do we empower the
administrators, head teachers, all
our teachers, and how do we hold
them accountable? How do we
reward them? How do we provide
for quality across the system and
not just at its most exclusive end,
so that every school is a good
school?
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78. Technology can also be an
important enabler, given the
magnitude of the task facing
India’s school system. There is
significant
scope
for
technology-based innovations to
broaden access to quality learning,
including in remote areas. It can
help in teacher training, and in
monitoring teacher attendance
and school performance. Some of
India’s
private
sector
ICT
capabilities are already being
deployed in schools on an
experimental basis. Where they
work, they can be scaled up over
time.
Korea and Taiwan – we are
overproducing graduates who
have gone through an academic
education, but do not have the
skills required in the job market.
TACKLING THE BIG MISMATCH
BETWEEN EDUCATION AND
MARKET DEMAND
79.
We
go
on
to
the
post-secondary,
or
tertiary,
education system. Here there is
the challenge of a very large skills
mismatch
between
what
graduates are equipped with and
what employers need.
82. We have to re-orient tertiary
education to focus on the skills
required in the real world. It is not
merely for the sake of meeting
short-term, market needs. It is in
fact the way in which we can best
develop the potential of a large
proportion of our people even
after they leave school – by
getting them onto the skills ladder.
80. The problem is well known in
India. But it is not unique to India.
All over the world – in the US,
Britain, Europe, China, Japan,
83. Look at Switzerland, which is an
excellent example of success
through skills-based education. Or
for that matter, Singapore. We still
81. We have over-academicised
learning, starting in school and
continuing through the college
system. In the US, 40 per cent of
college graduates end up doing a
job which doesn’t require a college
graduate, and this is after
spending
significant
family
resources in getting a college
degree.
In
India,
even
post-graduates apply for simple
government jobs that do not
require a college degree.
have a majority of young people
each year going through an
applied or skills-based education
upon leaving school. Even in an
advanced economy, that’s what is
needed. It is not a dead end for the
individual. It’s a pathway for
constant
improvement
and
upgrading during your career.
84. We have to make this
fundamental shift. It is not too late,
and the redirection is easier in
countries where tertiary education
is still expanding.
85. We have to move away from
an overly academic education,
even in our universities, to one that
creates bridges between the
academic and the real world.
86. And India like many other
nations has to expand pathways in
vocational training, to equip a large
proportion of its young with the
skills to do well in an open,
dynamic economy.
87. Skills development is indeed
one of the pillars of the
India-Singapore
Strategic
Partnership that was signed by our
two Prime Ministers in November
last year. The World Class Skills
Centre that we developed in Delhi
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now has 2,000 applicants for 400
places. Our second collaboration
in skills, a centre of excellence for
tourism training in Udaipur, will be
launched when PM Lee Hsien
Loong visits in October. We are
also looking into the possibility of a
North East Skills Centre in Assam.
new arena of education that has to
be developed. It means not
front-loading education into the
first 18 or 22 years of a person’s life,
and particularly not front-loading
knowledge acquisition.
LEARNING THROUGHOUT LIFE:
A GLOBAL CHALLENGE
91. We have to develop the
infrastructure
to
enable
continuous learning, at people’s
place of work, at home or near the
home, or back at school. This is a
new and critical direction for us in
Singapore. It is a new challenge
which every nation faces.
94. We can only achieve this if we
empower cities. Give them the
responsibility to make local
decisions, give them some
financial autonomy, and hold them
accountable. There’s also a role for
competition between cities –
competition to be the best place
for business, for innovation, as well
as the best place to live.
EMPOWERING CITIES
95. Here too, Singapore is happy to
play a role in India’s journey of
developing Smart Cities. Apart
from
our
businesses’
engagements, we just launched in
April
this
year
an
urban
management programme to share
our experiences and knowhow
with India’s states. Temasek
Foundation
and
Singapore
Cooperation
Enterprise
are
collaborating with NITI Aayog on
this, involving 115 officials from
seven states. It aims to share
88.
Finally,
human
capital
development is not just about
what happens in the first 18 or 22
years of our lives. It has to happen
throughout life.
89. Our most important social and
economic initiative in Singapore is
to develop lifelong learning. We
call it ‘SkillsFuture’. We must
enable regular injections of
learning throughout a person’s
working life, whatever the job. You
may be a doctor, a technician, a
chef, or you may be someone
working in building maintenance.
Technologies change, the needs
of the market keep changing, and
as individuals too, we each need to
refresh ourselves as we go
through life.
90. Lifelong learning is the whole
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It means developing the potential
in everyone to learn something
new at every stage of life.
92. Cities play a key role in the new
ambition of government, and more
so in a large, continental-scale
society like India.
93. Cities are crucibles of both
innovation and inclusivity. Why
innovation? Because it’s in the
cities that you can get that close
working relationship between
government,
businesses,
innovators, colleges, ITIs and
schools. It is this interaction that
spurs innovation and continuous
improvement. Why inclusivity?
Because it is in cities that we can
give everyone opportunity and
spur social mobility. And it is in
cities that we get engaged
citizenry, and can make the most
of smart technologies to connect
them with local authority.
Singapore’s knowhow in areas
such as waste and water
management,
environmental
friendliness and social urban
planning – all the techniques that
make a city a liveable and inclusive
place, and at the same time a hub
for innovation.
TURNING SOCIAL AND POLITICAL
CULTURE INTO A PROGRESSIVE
FORCE
96. A final point, about the culture
that we need to achieve the goals
that matter most to our future. PM
Modi had also spoken about that.
97. At the end of the day, what we
need to achieve progress is not
about budgets; it’s not just about
programmes. It is at the end of the
day about our social and political
culture. When we get the right
culture, it becomes a progressive
force in its own right. I will cite two
issues to illustrate this.
98. First, the social culture that
results from urban planning. Take
the example of Singapore. 85% of
our population lives in our public
housing neighbourhoods.
The neighbourhoods are planned
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for
social
integration
and
interaction: Between the poorer
families who live in the smallest
apartments and those better off
who live in larger apartments. They
are all a stone’s throw from each
other. The neighbourhoods have
shared facilities – public parks,
playgrounds, sometimes rivers,
eating places – everything shared,
no fences, no gates.
99. What it means is that we create
a city where no one feels they are
living
in
a
disadvantaged
neighbourhood, a ghetto separate
from
the
rest.
We
have
disadvantaged
families
in
Singapore, but we do not have a
single
disadvantaged
neighbourhood, where problems
can more easily multiply and
become difficult to solve – as we
see in parts of Europe and the US
today.
100. It also gives us something else
that is important from an economic
point of view. House prices
appreciate at roughly the same
rate, between the homes owned
by the poorer individuals and
those better off. We get that for
free – not through continuous
budgetary subsidies, but by
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integrating people through social
urban planning.
101. Most importantly, it creates a
culture of comfort with each other
– which in Singapore, a multi-racial
society and the most religiously
diverse country in the world,
becomes a very precious asset.
We have gained a culture of trust
and social cohesion that makes it
possible for us to do things
together for the long term.
102. That brings me to the second
issue. We need a sense of urgency
in reforms to fix problems before it
is too late, as I emphasised earlier.
But we need at the same time a
long term orientation, a willingness
to invest now or make sacrifices
now in order to see better lives
further down the road. That
long-termism is essential for the
most important things we want to
achieve.
103. Short-termism is the enemy of
social mobility. Whether it is about
investments in pre-natal care,
early childhood, revamping our
schools, or improving tertiary
education, it takes more than two
or three electoral terms before we
see results.
104. But a long term orientation
doesn’t come naturally in society
and politics anywhere. In most of
the advanced countries, political
horizons have in fact become
shorter in the last few decades.
When that happens, promise are
made today, with the costs paid for
tomorrow. Solutions that involve
any form of short term sacrifice get
kicked down the road. That
political culture of short-termism is
at the heart of the problems that
have accumulated in much of the
developed world.
105. We have to evolve our social
and political cultures, so they
become an asset in facing the
challenges
of
today
and
tomorrow, not a constant source of
distraction from society’s real
challenges. Once a population
trusts politicians who explain that
there are no short term answers
and urge support for long term
solutions, and once the population
distrusts politicians who offer
immediate promises, we get a
culture that becomes our greatest
asset for the future.
can’t make promises of quick or
easy results without the electorate
looking at you with some
scepticism, whichever the political
party you belong to. We have to
try our best to keep it that way.
107. Developing and preserving
that culture of looking long term is
hence at the centre of the
challenges we face around the
world. We have to do all we can to
cultivate it, through the education
of each generation of young
people, through the media and
civil society, and through our
politics.
108. Thank you very much for your
attention.
106. It was not always that way in
Singapore, but we developed it
over time. Today in Singapore you
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