Singapore – City in a Garden: A Vision for Environmental Sustainability 01/2013-5892 This case was written by Luk Van Wassenhove, Professor of Operations Management, Henry Ford Chaired Professor of Manufacturing, Ravi Fernando, Executive in Residence, Social Innovation Centre, and Hazel Hamelin, Senior Editor, all at INSEAD. It is intended to be used as a basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. We wish to acknowledge the supportive and coordinating role played by the Centre for Liveable Cities in Singapore. Copyright © 2013 INSEAD This complimentary copy is for the author’s use only. Copying or posting online is a copyright infringement. In 2010, Singapore recorded GDP growth of 14.5%. In 2011, it ranked number one in the IFC’s Doing Business report, number five in Transparency International’s index of least corrupt nations, and number three in INSEAD’s Global Innovation Index. Most remarkable of all, Singapore has defied the conventional wisdom that economic and population expansion harm the environment. Between 1986 and 2007, its ‘green’ cover increased from 35.7% to 46.5%, while its population soared from 2.7 million to 4.6 million. Today, in active pursuit of “Sustainable Singapore”, a strategy driven by an Inter-ministerial Committee on Sustainable Development, it shows an equal fervour for environmental protection and economic growth. How and why has this small city-state been able to reconcile its extraordinary economic expansion with environmental enhancement? Are there lessons here to be learned for political and business leaders in the 21st century? A World of Cities According to UN projections, 70% of the world’s population will live in cities by the year 2050.1 A 2012 study by the European Union, “Global Trends 2030: Citizens in an Interconnected and Polycentric World” has this to say about the challenges of urbanization: “Preserving humane living conditions in the world’s megacities will be the major challenge facing some states, since rapid urbanization will aggravate social exclusion and put intense pressure on public services. But affluent and dynamic cities worldwide will be the powerhouses of new areas of prosperity. …the number of megacities with more than 10 million inhabitants is projected to increase from 16 in 2009 to 29 in 2025, and megacities will account for 10.3% of the total urban population. Three of the four cities that are likely to pass the threshold of 10 million inhabitants by 2025 are in developing countries. Three of the ten biggest cities in 2030 will be Indian; five of the 25 biggest cities will be Chinese.” Clearly a tried and tested model for sustainability is needed to serve as a benchmark for these emerging megacities. Given Singapore’s track record in resolving some of these challenges, could it be a model for future development? 5.3 Million People in 714.2km2 How does a city state where the entire population is confined to 714.2km² of land (2012) cope with the challenge of being clean and green? When this question was put to Khoo Teng Chye, Executive Director of the Centre for Liveable Cities and former Chief Executive CE of PUB3, Singapore’s national water agency, this was his response: 1 United Nation’s Population Division/DESA, World urbanization prospects (2007) 2 http://www.singstat.gov.sg/stats/latestdata.html 3 PUB –Public Utilities Board Copyright © 2013 INSEAD 1 01/2013-5892 This complimentary copy is for the author’s use only. Copying or posting online is a copyright infringement. “That is a big question! ...It’s not what has happened in the last 10 to15 years; we have evolved over the last 40 to 50 years. From 1959, when Singapore became self-governing, and an independent nation in 1965, it was our challenge to try and make sure it worked as a city-state given that we had no resources to speak of – just a little island. So the issue was how do we give people a reasonable standard of living without really degrading the environment as we focus on driving economic growth for the nation’s sustainability? There are many agencies which contributed to the success: the Ministry of the Environment and Water Resources, Urban Redevelopment Authority, Public Utilities Board, Ministries of Health and Education, Urban Transport Authority, Port, National Parks Board, etc. What is it that made us what we are? One obvious answer is the very strong leadership of former Prime Minister Lee Kuan Yew, as related in his memoirs, where planning for green spaces, water management, and a clean and orderly nation are captured. At CLC we are trying to distil this into a framework for liveability. We believe the outcomes are obvious for everyone to see – physical outcomes, environmental outcomes and social outcomes – those are the three tangible results we have achieved. Today Singapore is clean and green, we enjoy a high quality of life, and strong economic growth – but these are the tip of the iceberg that people see superficially… We believe that the core elements that sustain the liveability outcomes are integrated planning and good governance, the two areas CLC is trying to focus on. We could say ‘We had a vision and wonderful strategic plans.’ Every city can fish out their plans, but I don’t think that’s the answer – there’s more to it than the idea of planning and having a good strategy. I think it’s a lot about execution, system integration, and how the agencies work together on the policies, processes and mechanisms, and how the political leadership works with the government, professional bureaucracy, the structures that are put in place – economic as well as statutory. We believe nevertheless that it’s not something unique to Singapore and can never be replicated. We evolved it based on our circumstances, but if you distil the lessons, we think there is enough in these principles to be of value to other developing cities. And that’s why the Centre for Liveable Cities came about. It’s not as if we just had a wonderful blueprint. When I talk to young planners w h o believe one must have a strategic plan where everything is planned and we just execute, I get worried. It’s not like that....it’s a very dynamic process.” Leadership and Land Management When Singapore gained its independence in 1959, there was nothing to suggest a bright future for the former British colony: it had no major natural resources, very limited supplies of water and energy, and no hinterland after the break-up of its federation with Copyright © 2013 INSEAD 2 01/2013-5892 This complimentary copy is for the author’s use only. Copying or posting online is a copyright infringement. Malaysia in 1965. According to Tan Gee Paw, Chairman of the PUB and former Permanent Secretary of the Ministry of the Environment: “The need for taking control of the limited land available and instilling strategic planning and zoning was the only option. To undo mistakes made would clearly cost in terms of infrastructure.” As Khoo Teng Chye pointed out: “When it all started in the 1950s and 60s, we needed to take control of the land and relocate people living in poor housing in the city centre. This necessitated the land acquisition so that we could then embark on central planning. This was a major step which required strong government and political will.” In contrast, these land constraints eliminated the risk of urban sprawl commonly associated with development and urbanization, as acknowledged by Ng Lang, CEO of the URA4: “Being an island, space is always a constraint. When other cities talk of ‘not sprawling’, we are amused as we have never had the option. Interestingly, many cities are now talking about going high rise.” Clean and Green – The Differentiator Given Singapore’s lack of infrastructure and employment opportunities, there was an urgent need to lure foreign investors to provide a much needed injection of capital. But who would invest given its multiple constraints? Prime Minister Lee Kuan Yew was convinced that Singapore had to differentiate itself in order to attract foreign investment. From the outset, he was keen to develop the economy but not at the expense of the environment, as Khoo Teng Chye explained: “One thing he always maintained was that if Singapore was to attract FDI, those we attract must be confident that the nation pays attention to detail and works. He was clear about the need to manage ‘first impressions’. If the city is unclean and disorganized, the signal sent is a negative one – which would not attract FDI. The city must be clean and green.” Given the overwhelming nature of the bread-and-butter challenges confronting the young nation, Lee’s commitment to environmental quality was visionary, according to Poon Hong Yuen, CEO of the National Parks Board (NParks): “The development of Singapore from the start was tied to ‘greenery’ due to the vision of former Prime Minister Lee Kuan Yew. Fifty years ago we were uncertain of survival, but he insisted on allocating and conserving land for green areas when one could argue that Singapore at that early stage of development could ill afford to consider the luxury of green areas in a 714km² land area.” 4 URA- Urban Redevelopment Authority Copyright © 2013 INSEAD 3 01/2013-5892 This complimentary copy is for the author’s use only. Copying or posting online is a copyright infringement. Lee understood the importance of the triple bottom line (people, planet, profit) long before the term was coined. His far-sighted approach continues to underpin policy today, as Tan Gee Paw confirmed: “We realize that for us to succeed economically we must also have a clean environment.