DPM Heng to double down on trade; will navigate a different future than predecessors

“There is a reservoir of trust and confidence in his leadership, but he will have to demonstrate that he and his team are equal to the task of leading Singapore in the post-Covid world,” said Eugene Tan, political commentator and associate professor of law at the Singapore Management University. “Managing expectations of a nation so wedded to success makes the task of governing Singapore tougher.”

The trade-dependent island was already suffering from the effects of the U.S.-China trade war when the coronavirus hit. Isolation measures to stem the spread of the contagion as it raced through the packed dormitories of migrant workers, infecting more than 40,000 people across the island, compounded the damage. The government is now forecasting a full-year economic contraction of up to 7%, which would mark the worst downturn for the country since its independence.

The soft-spoken Heng, 59, would herald a change of leadership style for the nation, which for all but nearly 14 years has been run by Lee or his late father, Lee Kuan Yew, Singapore’s first prime minister. While the younger Lee spent 13 years in the army before entering politics, Heng is a career civil servant and politician: He headed the central bank for six years and served four years as Lee Kuan Yew’s principal private secretary.

The elder Lee described Heng as the best principal private secretary he ever had. “He has one of the finest minds among the civil servants I have worked with,” Lee wrote in his book “One Man’s View of the World.” “The only pity is that he is not of a big bulk, which makes a difference in a mass rally.”

Heng speaks at the IMF and World Bank Group Group Annual Meetings in 2018. Photo: Bloomberg

For the business community, Heng’s more collaborative approach is a bigger asset heading into such uncertain times. Whereas Lee Kuan Yew instilled “palpable fear in the room” due to “the strength of his intellect and the force of his personality,” Heng seeks out alternative viewpoints, said Ho Meng Kit, chief executive officer of the Singapore Business Federation, which represents more than 25,000 companies.

‘Build Trust’

“It’s a different style altogether,” said Ho, who previously served as principal private secretary to Lee Kuan Yew. “This time around it’s not just that strong leadership that matters, because no one knows where that future is,” he added. “And that future needs to be co-created between the public sector and the private sector. And in order to do that you need to build trust.”

Heng reinforced his front-runner status in his dual capacity as finance minister and deputy PM by delivering four nationally televised stimulus packages in about three months worth a total of $92.9 billion, laden with cash handouts, tax waivers and wage subsidies. Over the weekend he headlined the last in a series of pandemic-related speeches by senior party officials, saying the government would set aside an additional $20 billion-plus to support research in “high impact areas” such as health and biomedical sciences, climate change and artificial intelligence.

Heng also made it clear that Singapore must maintain its status as a trade hub to survive the crisis. “We are finished if we close up,” he said on Saturday. Heng wasn’t available for an interview before the election.

Heng speaks via video link at the Lujiazui Forum in Shanghai on June 18. Photo: Bloomberg

The long-term fallout of the pandemic on Singapore’s economy is hard to assess, but the next government will face other equally daunting challenges. Climate change, an aging population and growing competition from other nations in Southeast Asia will all require the attention of the next leader. Externally, the new prime minister will have to navigate Asia’s shifting geopolitics, testing the ability to remain a key partner of Washington, while extending its growing ties with Beijing.

‘I Listen To All Views’

Key will be his experience in finance, a sector that has grown rapidly and will be vital in the aftermath of the virus, which has battered other pillars of the economy including oil, manufacturing and services. With a masters in economics from the University of Cambridge and one in public administration from Harvard University’s Kennedy School of Government, he ran the Monetary Authority of Singapore from June 2005 to April 2011, steering the nation’s central bank through the global financial crisis.

Heng had warned as early as April 2007 about the underpricing of risks for securities including the collateralized debt obligations at the heart of the U.S. housing crisis. But he was unable to prevent the damage infecting Singapore once the crash came.

The MAS re-centered its exchange-rate trading band four times in seven policy reviews, and incurred its first loss on record as the value of its investments plunged. The government got permission to draw $4.9 billion from its reserves for the first time to protect jobs during the 2009 financial crisis, and paid back the $4 billion used in 2011 after the crisis passed.

“My own sense is I am very open, I listen to all views, and I decide what needs to be done,” Heng said at a press conference in November 2018 when asked about his leadership style. “When it is important enough, we will be fast and decisive about it, just like what I did during the global financial crisis, because every minute of delay means far greater risk.”

Richard Koh, founder of Singapore fintech start-up M-DAQ, said he was impressed while traveling with Heng and other government officials and business leaders to San Francisco last year to meet Silicon Valley companies and financiers.

“Heng is a listener, as evidenced from the way he obtains information by talking to a wide range of people, both onshore and offshore -- where he often follows up with clarification questions,” Koh said. “He clearly has Singapore’s future in his mind constantly and never fails to help champion local enterprises whenever the opportunity presents itself.”

‘Auto-Pilot Mode’

Still, others see Heng’s approach as too cautious. Former PAP lawmaker Inderjit Singh, who stepped down in 2015, said that Heng is a “person with a heart, willing to listen, a caring person,” but lacks stature and charisma. “I would like to see him able to decide faster than to spend more time in the consultative process because that would take very long, especially when there’s so many views,” he said.

The pandemic has shown the need for the ruling People’s Action Party to avoid groupthink and take a chance on innovative policies, according to PN Balji, the former top editor of Today newspaper who has worked as a journalist in Singapore for about four decades. Like many countries, Singapore’s initial strategy to contain the virus didn’t account for how contagious it is, forcing the country into a stringent lockdown that has only just been eased.

“I’m not blaming Heng Swee Keat but we need to get rid of the risk averse culture,” Balji said, describing the minister as “safe” and “on an auto-pilot mode.”

“If people are not allowed to fail and spring up again, then we will continue to be a safe society,” he added. “If this continues, in the new world, we won’t do well.”

Heng, top right, sits with G20 finance ministers and central bank governors for a group photo in 2019. Photo: Bloomberg

Heng’s track record has propelled him to the forefront of the party’s fourth-generation or “4G” leaders, which includes former army chief and current trade minister Chan Chun Sing and education minister Ong Ye Kung. Ensuring a smooth continuity has been a hallmark of the PAP’s rule, with each former prime minister typically remaining in a senior consultative role after transferring power.

Heng’s steady ascent suffered a shock in May 2016 when he had a stroke and collapsed during a cabinet meeting, in which fortunately were three ministers who were doctors, one of whom resuscitated him before the ambulance arrived. After awakening from a six-day coma, Heng reportedly scribbled: “Is there a Cabinet meeting today? Where are the papers?” He was back at work in three months.

In a social media post earlier this year, Heng paid tribute to his wife Chang Hwee Nee, chief executive of the National Heritage Board, for her support, saying, “she showered me with the best care after my stroke, helping to nurse me back to full recovery.” They have two children. Heng remarked in 2019 of his work-life habits: “It is a very difficult juggling act and I try my best to have some time to my family and myself, but at the same time I probably put in many, many hours a day.”

Those who have seen him in action describe him as personable. When Heng attended a high-intensity weekend-long hackathon in 2017, he didn’t seem like “a nerd coming to a party,” said Durwin Ho, the chief executive officer of StartupX. Heng stayed longer than expected and showed “genuineness.”

A year earlier, Joyce Tay, the company’s chief strategy officer, had reached out to Heng on Facebook to offer an invitation shortly after he was released from the hospital. She was surprised when he personally wrote back and explained that his doctor told him he should avoid large crowds.

“I don’t know if he remembered that interaction because it was so fleeting, but it was nice to have him the next year,” Tay said. “Personally, he strikes me as someone who cares a lot for things and for people and for how the society is growing. It will be exciting to see him continue to grow as a leader.”