I spoke at the Opening Plenary of the Singapore International Water Week 2012, World Cities Summit and CleanEnviro Summit. Professor Tommy Koh, who was the moderator, asked:

“Minister, my question to you is two-fold. First, this plenary brings together our colleagues from water, city and the environment. What is the common thread that ties the three together, and what are some lessons learned that you would like to share with us?” 

Answer:

" I would like to make three points.

The first point is that dense, open, integrated, well-connected, well-planned cities are the greenest and the most sustainable way of life for the future.

The second point is that the quality of the environment is a source of enduring competitive advantage. Money, ideas, people are mobile. Whether or not you can have a blue sky, clear, safe drinking water, and clean streets, is something which you cannot create overnight, and is something which once achieved, gives you an sustained edge. I will elaborate that using Singapore as an example later on.

My third point is to beware of subsidising wasteful consumption. Instead, what governments need to do is to invest in infrastructure, and the key is good governance. Having honest, competent public authorities capable of envisioning the future, inducting the latest technology, working with the competitive private sector, to not only build infrastructure, but the point which I want to emphasise, is also the need to be able to maintain and renew that infrastructure. And that, really, is a key point.

Now, let me use Singapore as a case example to illustrate these three points. First, we are very, very small, but we are a city. We are a city-state. We know that globally, half of humanity now lives in cities and by 2050, 80 per cent of all human beings will live in cities. Why is that so? They do not live in cities because it is government policy to live in cities. They come because they are voting with their feet. Why? It is because cities are a focal point for opportunities –for jobs, for cultural capital, for social capital. The most important point is about opportunities. The key issue, as humanity congregates in cities, is with housing. You have heard examples of slums, but we do not have slums in Singapore. Why? It is because we have provided subsidised public housing. But the real genius of public housing in Singapore is the fact that 90 per cent of the people do not rent these premises, but are owners of the premises, and therefore have a stake in real assets, and therefore maintain their homes for the long term.

The second point is that the environment is a source of enduring competitive advantage. We are now sitting on reclaimed land. This took 30 to 40 years to envision, implement and execute. If you look outside now at the waters around us, this used to be an open sewer. But in ten years, we converted an open sewer into a river which would supply fresh water into Marina Bay. Everything you see around Marina Bay has been developed, really, built, in the last five years. Why do we do that? It is because we showcase that it is possible to build, to invest for the long term; and to provide for our people as well as our guests and investors a place where you will have blue skies, clean, safe water, and clean streets. You see, the point is, if I can provide an environment where you would trust your wife and your children to live in, this is also precisely the same place where you would be prepared to leave your money in a bank for safekeeping, to invest for the long term, and to use as your regional, or even global, headquarters. So there is actually a logic to that.

The third point is to avoid subsidising wasteful consumption. In the case of Singapore, we import everything that we eat, half our water, and almost all of our energy. I say ‘almost all’ because 1 per cent of our energy comes from incinerating waste. In such a resource constrained society, we do not subsidise energy, water, or in fact, any consumption items. But, we ensure that we give cold, hard cash to those members of our society who are less well-off. They then decide, on very rational grounds, how to use their own hard-earned income, plus the cash that the Government has supplemented, to consume water, food, transport, and all the other essentials of life. But the point of achieving that is not only to achieve social equity in opportunity, but also because a market signal exists, and it makes it worth the while for companies such as Siemens to consider long-term investments in this place, because you know that we are good for our money, we will pay for the latest and the best, and we will continue to renew our infrastructure and maintain tip-top conditions.

So the point is that we create opportunities for the private sector, we create a test-bed for new research and technological breakthroughs which emanate in universities’ laboratories, and then we create a working model of the future. That is really what Singapore is. You are all sitting in the midst of a place which has been developed, but I would also challenge you to find the oldest places in Singapore and look for places which we may have lapsed. And I would put to you, and in fact, actually, we are doing not a bad job in maintaining, renewing, and making sure that this is a working model of the future.

So let me just conclude by saying that we have tried to use Singapore to illustrate these three points. Firstly, the future for humanity is in cities, and cities can be the most sustainable way of life for humanity in the century to come. Secondly, there is competition between cities, and a key enduring source of advantage is how well you maintain the environment. Thirdly, it is possible to achieve social equity and business logic to join the dots between technology, commercial interests, and social and political objectives. And that, really, is the secret behind the Singapore that you see today. So thank you very much for your presence.

Q&A session

An audience question about public-private partnership and market-based solutions for solving the problems of water and cities:

Response:

Perhaps I would add a Singapore government perspective on public-private partnerships (PPP), as I have had some experience with it myself. We do not embark on PPPs because we have cashflow problems. Fortunately, in the case of Singapore, our fiscal condition is very healthy. But we do use PPP for a couple of other reasons.

Firstly, we do want private sector financial discipline to be applied to public projects. It helps to ascertain whether the project is viable or not, or what other prerequisites are needed before we embark on the project. So, it provides another set of rigorous testing on the necessity and viability of the project.

Secondly, we want the private companies to bring the latest technologies available to the table. If we leave it entirely within public hands, the temptation is to just make incremental improvements or maintenance, but you are not going to get a radical proposal which could theoretically leave your previous investments as stranded assets. You need that possibility that someone would come up with an idea that would completely change your business model and change the course or structure of the service.

But having said that, PPP is not a substitute for long-term planning. Public authorities still need to know, for instance, how much water is needed, and what the energy and transport requirements are. Planning is still essential.

A related corollary is that the government agencies that are making decisions, needless to say, need to be honest; otherwise the whole process is averted. Secondly, they need to be competent enough to be able to assess intelligently proposals that are put up. So, all I am saying is that, a PPP is a good idea if the circumstances are right, but it is not a substitute for planning, integrity, or a lack of familiarity with the latest technologies.

Request for closing remarks from Prof Tommy Koh:

“‘Can each of you leave us with one inspiring thought?’”

Response:

Build the most beautiful city you can; plant as many trees as you can; invest in the latest technology; conserve water, energy and resources; and find honest, competent and visionary leadership. Thank you.