The Secret to the Success of Singapore and the UAE: High Salaries for Public Officials
Last week, Lawrence Wong began his term as the new Prime Minister of Singapore. Since the country was founded in 1965, the same party has always been in power, and Wong is the fourth prime minister. Among this short list, Wong’s predecessor was Lee Hsien Loong, the son of the country’s first prime minister, Lee Kuan Yew. Wong’s mother was a teacher, and his father was an immigrant from China. Wong became a civil servant at a young age and built a career in the public sector. His last position was as the head of Singapore’s Energy Market Authority. After entering politics in 2011, he held various ministerial positions.
Since its establishment, Singapore has seen its per capita national income increase by almost 100 times. There are several reasons behind this economic success. For one, Singapore’s small size works to its advantage. As Asia became the world’s production center, Singapore’s strategic location along the sea route between Asia and Europe played a crucial role. The most critical factor behind Singapore’s success is providing public officials with salaries that match their private sector counterparts and promoting meritocratic public service. The country has had highly qualified individuals, including the son of former prime minister Lee Kuan Yew, who holds a mathematics degree from Cambridge.
The third president of the United Arab Emirates (UAE) took office in 2022. As is well known, the country is a monarchy, and the Emir of Abu Dhabi also becomes the head of state. In this column, I have discussed how strategic UAE public institutions are and how they lead the private sector. In the UAE, public institutions pay their employees higher salaries than private companies. It has reached the point where companies in the UAE complain, “We can’t find Emirati citizens to employ because of the high salaries in the public sector!” In this Gulf country, companies employing 50 people or more must employ at least one Emirati citizen. In response to the backlash, the UAE government announced last week that it would only hire individuals with at least three years of private sector experience in the public sector. In the UAE, public sector positions are filled with more than just Emiratis. Recently, my friend, whom we used to work with at a leading think tank in Turkey, started working at the UAE Ministry of Transportation. This shows that the country hires talented individuals for essential positions and pays them fairly.
Singapore and the UAE are small, newly established countries that were formerly British colonies. Some might believe these countries cannot be used as models for Turkey, as Turkey inherited the vast Ottoman Empire with its bureucracy what was established based on the French system. Public service is considered a “career” job in the French system, where individuals enter young and progress through the ranks. It’s impossible to join the public service from the outside later on. Although public institutions offer relatively good entry salaries and recruit qualified personnel through tough exams, these salaries only increase a little afterward. Despite this, due to the job security associated with a career and the emotional satisfaction of public service, some employees remain in the public sector, leading to smooth operations. Until about ten years ago, this system worked reasonably well for Turkey.
Unfortunately, we have not learned a key lesson from the success of countries like Singapore and the UAE. The lesson is about paying competitive salaries to career civil servants in the public sector. At the moment, public employees outside the career bureaucracy often earn wages that are in line with or even higher than the market. However, those working at the core of the bureaucracy have been given low entry salaries since a decree issued in 2011 under the pretext of “equal pay for equal work.” It’s worth questioning whether the skills required for all public institution jobs are equally available in the market and justify equal pay. Furthermore, after the 2016 coup attempt, restrictions were imposed on sending public servants for overseas graduate studies and other training. This restricts a major advantage of public service: the opportunity for quality education abroad. The recent austerity measures further limit these opportunities, making careers in the public sector less appealing.
I often hear businessmen saying, “Public officials shouldn’t use green (private) passports; they should be reserved for us.” However, if a country’s public officials can comfortably use their green passports with a high-income level, the business opportunities for that country’s businesspeople will in turn expand significantly. It is no coincidence Singapore and the UAE have the most respected passports globally. It’s crucial to safeguard our public institutions and enhance their human resources.
Recommended Reading: “Small States Club” by Armen Sarkissian
This article is a translated version of “Singapur ve BAE’nin başarı sırrı: Kamu görevlilerine yüksek maaş ,” which was initially published in Economic Daily (Nasıl Bir Ekonomi Gazetesi) on May 31, 2024.
