Singapore Loosens Its Reins to Get Internet Economy Running

By EVELYN IRITANI

July 23, 2000 12 AM PT

TIMES STAFF WRITER

SINGAPORE —

When Singapore banned a recent television episode of “Ally McBeal” in which she contemplated a homosexual dalliance, the message seemed clear: The government remains firmly in charge of what its people see and hear.

But this strong-willed government--known for controlling everything from bubble gum consumption to political dissent--has quietly given up its efforts to control the Internet.

Singapore officials concede that technological advances have outstripped their ability to maintain a firewall against the darker forces in cyberspace.

“The 100 sites we monitor are purely symbolic. You can get around them in so many ways,” acknowledged Deputy Prime Minister Lee Hsien Loong, the son of former Prime Minister Lee Kuan Yew, the architect of modern Singapore. “Any teenager who is well-informed will find out how to do it.”

This admission, from one of the world’s most techno-savvy governments, offers a sobering lesson for political leaders in Asia and elsewhere who believe they can unlock the Internet’s economic potential while keeping out threatening “foreign elements.”

As Communist economies gave way to quasi-capitalist systems, Singapore--a nominally democratic but tightly controlled society--has been held out as proof that political and social dissent can be stifled without sacrificing economic vitality. Its paternalistic system has turned the sleepy fishing port on the tip of the Malay Peninsula into one of Asia’s most successful economies.

More recently, Singapore has sought to establish “new-economy” credentials by wiring 98% of its homes for broadband access, deregulating the telephone system and setting up a $1-billion “technopreneurship” fund.

But that was not enough to build an Asian high-tech center.

Singapore needed the 20-year-old whiz kids who were launching Internet start-ups in their Palo Alto apartments and Silicon Valley high-rises. It needed Starbucks-stoked venture capitalists willing to risk millions on a good idea.

Instead, its civic architects had created Singapore Inc.: a pool of well-educated professionals with a fear of failure, an economy dominated by state-backed firms and closely held family companies and a reputation as a great place to do business as long as you didn’t chew gum, speak too loudly or engage in youthful pranks.

“Singaporeans had developed to become a nation of people who are disciplined and orderly, and that’s inherently a problem for encouraging entrepreneurship,” said Terence Chong, regional director of Singapore’s National Science and Technology Board. “We need a bit more chaos.”

Promoting chaos is hardly playing to Singapore’s strength. After all, this is the nation that risked international ridicule a few years back when it banned the sale of chewing gum and came under attack when it ordered the caning of an American teenager, Michael Fay, for vandalizing cars.

In the tumultuous years following Singapore’s separation from Malaysia in 1965, the ruling People’s Action Party stayed in power by jailing its political opponents, muzzling the press and, in exchange, offering its nearly 4 million residents clean, safe streets, good schools and one of the region’s highest per capita incomes.

Maintaining order was a high priority, given the fears of racial and ethnic tensions spilling over from Muslim-dominated Malaysia and Indonesia. In addition to the Chinese, large groups of Malays and Indians call this tiny city-state home.

Singapore still maintains a close watch over how the domestic and foreign media report internal affairs, particularly sensitive domestic political disputes or contentious relationships with its neighbors.

And Singapore’s most controversial controls--such as the regulation of foreign media and the death penalty for drug smugglers--are unlikely to change soon, given the clout still wielded by the man who inspired them, Lee Kuan Yew. Though retired with the position of senior minister, Lee is regarded as the power behind Prime Minister Goh Chok Tong.

“Some of these issues were matters of principle,” said Lee’s son, the deputy prime minister, who is heir apparent to the top post and chairman of the Monetary Authority of Singapore, the de facto central bank. “It’s a question of who’s in charge of this place, Singaporeans or foreigners.”

But Lee and others privately concede that the more wired and tech-savvy their population becomes, the tougher it is to control what they see or read. Already the Internet reaches into 42% of the homes as well as schools, libraries and government offices.

By 2003, all Singapore schools will have a student-computer ratio of 2 to 1, and 30% of instruction will be linked to computers and the Internet.

Against all this tech firepower, the government requires its Internet service providers to maintain a blacklist of 100 Web sites, including the likes of Playboy.com, which are deemed off-limits because of sex, violence or material offensive to religious or ethnic groups. The sites are officially blocked, but Singaporeans can easily bypass those controls by dialing into the Internet through third countries or accessing other sites with similarly objectionable content that hasn’t been screened.

Indeed, in a demonstration of Singapore’s softening on this issue, the parliament passed a law last year to ensure that Internet service providers would not be liable if their customers used blacklisted sites.

Not that the place has become a digital free-for-all. Singapore reserves the right to prosecute Internet firms or other media for publishing information that incites “hatred or contempt.” Critics fear that vaguely defined law will be used to silence those who criticize the government too harshly or promote religious fundamentalism.

Internet users got a dose of Big Brother last year when the country’s security agency--at the request of Singnet, an Internet service provider--secretly scanned 200,000 private computers to trace a virus. Singnet, a subsidiary of Singapore Telecom, the phone company, later apologized to its customers for not telling them in advance.

By keeping such tools in its legal arsenal, Singapore has fostered an atmosphere in which self-censorship comes naturally for many. Still, chat groups on taboo subjects such as homosexuality and dissident politics now appear on the Web.

As their police powers lose effectiveness against technology, Singapore officials increasingly rely on their bully pulpit. By educating people about the darker side of the Internet, such as pornography or online gambling, the government hopes to encourage Web self-censorship.

“We have to be more proactive,” said a top government official involved in policing the Internet.

With governments around the world vying to be home to the next Silicon Valley, Singapore knows it needs to do more than lift a few Web restrictions to create an environment that will attract and keep the young talent needed to build a “wired island.”

“I’m not worried that the large corporations will go,” said the younger Lee. “It’s the young people. Will they find enough excitement to keep them here?”

Derek Williams, senior vice president in Oracle Corp.’s Asia Pacific division, said Singapore’s Internet restrictions have “never been a barrier to doing business” in the 15 years he has lived and worked here.

Recently, the British Broadcasting Corp. moved its headquarters from Hong Kong to Singapore, joining Oracle, Reuters, CNBC Asia, Yahoo Asia and dozens of other top media and technology players.

But Williams said Singapore’s competitiveness is being undermined by societal pressures that prevent its best and brightest from taking risks and moving quickly.

Exhorting people to embrace failure is certainly not how the Singapore government produced double-digit growth rates during Asia’s boom years. But the same official zeal that went into creating one of the world’s largest electronics manufacturing industries is now being used to promote the high-risk, high-payoff climate that has fueled America’s cyber-revolution.

That includes publicity campaigns in Singapore that retell tales of Silicon Valley geeks becoming billionaires. More substantively, laws were revised to make failure less financially painful. For example, entrepreneurs are allowed to launch a new company more quickly after filing for bankruptcy. And the government has reduced start-up costs by making it legal for entrepreneurs to launch businesses in their government-controlled flats.

Even Senior Minister Lee has been enlisted in this campaign. He declared in a recent speech at a technology conference in San Francisco that Singaporeans must embrace risk-taking and creative destruction or risk becoming obsolete.

“Lee Kuan Yew was the man who set up modern Singapore and now he’s saying, ‘Go the other way, go and run with the new economy,’ ” said Chong, who heads a Singapore government contingent in Silicon Valley. “That’s powerful.”

Old ideas die slowly. Lilian Koh, a former government official who launched an online database provider called One Knowledge.com, complains that the bias against entrepreneurship lives on in a school system that continues to push youngsters toward traditional professions.

“This is out of date,” Koh said. “We need good professionals, but we’re entering into a different time. You have to take risks.”

Government-ordered spontaneity might seem like an oxymoron. But the Singapore government claims it is working, pointing to the 73% jump in the number of start-ups established in 1999 over the previous year.

One of them is the brainchild of Rocky Chia and David Leong, 30-year-old Singaporeans who gave up high-paying jobs and launched an online real estate venture this year called IProperty.com.

They and several friends scraped together $20,000 in savings before persuading a Singapore firm to cough up $700,000 in seed funding. They also got help from the Singapore government, which gave tax breaks and paid the salaries of two programmers.

Asked why he embarked down such an uncertain path, Leong, who recently married and supports his widowed mother, quoted the man he calls a hero: “Even Senior Minister Lee said this will be our way of life.”

IProperty.com claims to be Singapore’s biggest online real estate marketplace, with 10,000 property listings representing 10% of Singapore’s agents. They have recently expanded into Malaysia and China.

Competition is fierce. All the major Hong Kong real estate tycoons, anxious to tap into the “dot-com” boom, are launching similar real estate ventures across Asia. Staying ahead of them leaves Leong and Chia little time to worry about Big Brother, an issue that appears to have little relevance in their tiny corner of cyberspace.

Said Leong, “Every day I wake up and think, ‘I don’t have much time. I’m an antelope, and if I don’t move faster I will become the tiger’s lunch.’ ”

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

High-Tech Population

Singapore, with a population of

3.53 million, is among the most wired countries in Asia:

* 59% of homes have a computer

* 42% of homes have Internet access

* 75% of businesses have at least one computer

* 81% of those businesses have Internet access

* 98% of homes are wired for broadband access

* 1.1 million people use pagers

* 1.8 million use mobile phones