Friday, January 28, 2011

Lee Kuan Yew and Rupert Murdoch

Singapore is continuing its legal battle against the Wall Street Journal, charging opinion page deputy editor Melanie Kirkpatrick with contempt of court after fining the newspaper 25,000 Singapore dollars (($16,250)  for three articles that “scandalized the court” last year. That’s the legal jargon. What won’t come out in court, however, is the really interesting bit – what the two men on the sidelines think of each other.
Minister Mentor Lee Kuan Yew, the architect of modern Singapore, and Rupert Murdoch, the new owner of the Journal, have a lot in common.
Murdoch, starting with the Adelaide newspaper inherited from his father, built up a global media empire. His News Corporation reported assets worth $50 billion as of December 31, 2008, and $33 billion in annual revenues. That’s $8 billion less than Singapore’s entire fourth quarter gross domestic product: 64.3 billion Singapore dollars or $41.7 billion. News Corp’s market capitalization at $15.6 billion today makes it worth twice as much as Singapore Airlines, the world’s largest airline by market value. SIA’s market capitalization today is about 12.3 billion Singapore dollars or about $8 billion.
MM Lee, on the other hand, transformed Singapore from a colonial port and British naval base into one of the richest countries in Asia.
MM Lee compared with other history makers
He can be said to be the most successful architect of a nation in the last 100 years.
Lenin failed to prevent the rise of Stalin – and the communist state he created has been dismantled.
Mao’s China is not today’s China. The communist leadership continues one-party rule but is turning the country into a market economy.
Nuclear-armed India, growing on an information technology boom, is not the India envisaged by  Mahatma Gandhi, who was assassinated on January 30, 1948, just five months after Indian independence.
Fidel Castro — who came to power in Cuba in February 1959, only four months before MM Lee became prime minister of British-ruled Singapore – is still around. But Cuba has not enjoyed the same economic success as Singapore.

Nelson Mandela has certainly led South Africa out of apartheid and potential greatness, but he served only one term as president (April 1994-June 1999).
Ben Gurion’s Israel, Saudi Arabia, Hashemite Jordan are all mired in Middle Eastern problems.
Kemal Ataturk’s Turkey is now ruled by an Islamist party.
Ian Smith’s Rhodesia has become Robert Mugabe’s Zimbabwe – and continues to suffer unimaginable hardship.
Fathers and sons
MM Lee, on the other hand, has the satisfaction of seeing his country prosper – under leaders who share his ideas. He is now Minister Mentor in a Cabinet headed by his son, Prime Minister Lee Hsien Loong.
Murdoch may have an heir apparent too. His son, James, is the chairman and chief executive of News Corporation, Europe and Asia.
Murdoch has enjoyed the same phenomenal success as a businessman as MM Lee has as a leader. He is the 132nd richest person in the world, worth $4 billion, according to Forbes.
He might have been worth more if News Corporation had not lost more than $6 billion in the quarter ended December 31, 2008, partly due to a writedown in the value of the Wall Street Journal publisher Dow Jones. At present, he is worth the same as Donald and Samuel Newhouse, who own the much smaller Conde Nast group (New Yorker, Vanity Fair, Vogue, Wired).
That is the thing about Murdoch. He is willing to go all the way for things he wants and vastly overpaid for Dow Jones. He became an American citizen to acquire American television stations and married his Chinese-born wife when he was active in Asia.
He has the same energy as MM Lee. When Peter Chernin stepped down as his deputy and CEO of Fox in February, he took charge of Fox himself. 
Now 78 years old, he still has visions for the future, embracing new technology. He is as keen on the internet as he has been on traditional media. He does not see the decline of the printed newspaper as the writing on the wall for news media. The format may change, but not the appetite for news and information.
MM Lee, who will be 86 in September, has been a visionary too – he and those who worked with him in the early years. Singapore prospered by luring in the multinationals when they were viewed with suspicion in other newly independent countries in the post-colonial world.
His ingenuity shows also in the way his People’s Action Party has kept its grip on power ever since he became the prime minister in 1959. It has not only delivered good government and economic prosperity but also redrawn political boundaries and rewritten electoral rules.
Of the 84 elected members of parliament, only nine represent single-seat constituencies. The rest are elected from Group Representation Constituencies (GRCs), where people vote not for a single candidate but for a group of candidates. So, unlike, say, Barack Obama or Gordon Brown, Prime Minister Lee Hsien Loong or MM Lee himself has come to power not by defeating rival candidates in a direct face-to-face contest but as the leader of a team that beat an opposition team. The opposition claims it has problems finding enough candidates. The ruling party won 82 seats – 37 of them uncontested.
The government has also made it clear in the past that those constituencies which vote for it will get priority when it comes to upgrading public housing estates and other amenities. This can sway the people, 90 percent of whom are homeowners, mostly living in public housing estates.
Murdoch enjoys no similar advantage in his business dealings. He operates in a free market, though he has managed to grab a major share of the business in such lucrative media markets as London and New York.
Who has more influence?
MM Lee has said China and Russia are following the Singapore model. Murdoch’s Wall Street Journal also carries weight  – certainly in Singapore. The government would not have taken the Journal to court if it thought the newspaper’s opinion was of no consequence.
Murdoch has a history of choosing winners – backing Margaret Thatcher and Tony Blair – though his reservations about Barack Obama’s economic policies obviously fell on deaf ears during the US elections last year.
Singapore and News Corporation have both suffered in the economic downturn. Exports – vital to Singapore’s prosperity – have slumped. The Government of Singapore Investment Corporation lost $33 billion last year, according to the Wall Street Journal, while Temasek Holdings, the smaller Singapore sovereign wealth fund, has reported a loss of $39 billion between March and November. Another Singapore strategy – to become the Switzerland of Asia – has also suffered a check. Singapore has agreed to relax its banking secrecy laws – which it beefed up in 2002 – just like Switzerland and other so-called “tax havens” have promised to under international pressure.
Singapore will no doubt find new ways to thrive in a changing world just as Murdoch has his visions for the future.
But who can tell what News Corp will be like post-Murdoch?
MM Lee’s legacy will endure. A nation can’t be wound up like a business.