Goh Keng Swee - Political Career

Political Career

Goh was a key member of the PAP's Central Executive Committee, and later became its vice-chairman. Goh successfully contested the Kreta Ayer seat in the 1959 general election, was elected to the Legislative Assembly on 30 May, and joined the first government of Prime Minister Lee Kuan Yew as Minister for Finance. In this role, he assumed stewardship of Singapore's economy. As a budget deficit of S$14 million was forecast that year, he introduced stringent fiscal discipline which including cutting civil service salaries. As a result of these measures, he was able to announce at the end of the year when delivering the budget that the Government had achieved a surplus of $1 million. He initiated the setting up of the Economic Development Board which was established in August 1961 to attract foreign multinational corporations to invest in Singapore. The next year, he started the development of the Jurong industrial estate on the western end of the island which was then a swamp, offering incentives to local and foreign business to locate there. According to former Permanent Secretary Sim Kee Boon, Goh admitted that the Jurong project was "an act of faith and he himself jokingly said that this could prove to be Goh's folly". Nonetheless, Goh also felt strongly that "the only way to avoid making mistakes is not to do anything. And that ... will be the ultimate mistake."

In the 1960s, there were great pressures from communist agitators working through Chinese-medium schools and trade unions. Divisions existed within the PAP as well, with a pro-Communist faction working to wrest control of the party from the moderate wing, of which Goh and Lee Kuan Yew were key members. A key source of division was the issue of merger with Malaya to form a new state of Malaysia. Goh and his fellow moderates believed this was a necessary condition for Singapore's economic development because Malaya was a key economic hinterland; merger would also provide an alternate vision against Communism for Singapore's Chinese majority. In July 1961, 16 members of the pro-Communist faction broke away from the PAP to form the Barisan Sosialis, and captured control of the main trade unions.

The Singaporean government won approval from Tunku Abdul Rahman for a merger in 1961, with the Tunku being motivated by a desire to stabilize the security situation in Singapore, and notably to neutralize the perceived communist threat. Singapore merged with Malaya and the British Borneo states in 1963 to form the Federation of Malaysia. Merger, however, proved to be problematic for the Singaporean leaders. There was a clash of fundamental principles, both political and economic, notably on the issue of Malay dominance. Communitarian violence in 1964 was inflamed in Singapore by Malay and Chinese activists. According to Lee Kuan Yew, Goh fought to protect Singapore's interests against the Federal Minister of Finance, his cousin Tan Siew Sin, "who was out to spite Singapore". Goh played a crucial role in orchestrating the subsequent secession of Singapore from the Federation on 9 August 1965. After two difficult years, Lee asked him to negotiate with the Malaysian Deputy Prime Minister Tun Abdul Razak and Minister for External Affairs Tun Dr. Ismail Abdul Rahman in July 1965 for Singapore to have a looser arrangement with Malaysia within the Federation. However, following the discussions, Goh decided on his own that it would be better for Malaysia and Singapore to have a clean break. He would later claim this was the "best thing that ever happened to Singapore".

Upon independence in 1965, Goh relinquished his finance portfolio and became Minister for the Interior and Defence until 16 August 1967, assuming responsibilities for strengthening Singapore's military and domestic security capabilities. A key policy was the creation of National Service, a mandatory conscription system for able-bodied young males. He was again Finance Minister between 17 August 1967 and 10 August 1970, during which time he declined to allow the central bank to issue currency, favouring instead a currency board system as this would signal to citizens, academics and the financial world that governments cannot "spend their way to prosperity". Subsequently, in 1981, he expressed the view that the central bank need not hold large amounts of cash in reserve to defend the currency, proposing that the Government of Singapore Investment Corporation (GIC) be established to invest excess reserves. At the time, it was unprecedented for a non-commodity-based economy to have such a sovereign wealth fund.

Goh encouraged the establishment of the Institute of Southeast Asian Studies in 1968, and on 11 August 1970 he was reappointed Minister for Defence. In 1971, he put together the Electronic Warfare Study Group, a team of newly graduated engineers who had excelled in their university studies which was headed by Dr. Tay Eng Soon, then a university lecturer. The group worked on Project Magpie, a secret project to develop Singapore's defence technology capabilities. In 1977, the group was renamed the Defence Science Organisation (DSO). Originally part of the Ministry of Defence, in 1997 the organization became a non-profit corporation called DSO National Laboratories.

Goh was also responsible for projects that sought to improve Singaporeans' cultural and leisure life, such as the Jurong Bird Park, the Singapore Zoo and the Singapore Symphony Orchestra. He backed the construction of the Kreta Ayer People's Theatre in his constituency as a venue for Chinese opera performances. He was also instrumental in introducing rugby in the Singapore Armed Forces and later in schools. In recognition of his role in promoting the sport, the Schools "C" Division Cup is named after him. Impressed by an oceanarium in the Bahamas, he contacted the Sentosa Development Corporation and convinced them to have one. Underwater World Singapore opened in 1991.

On 1 March 1973, Goh was appointed Deputy Prime Minister of Singapore concurrently with his other Cabinet portfolio. On 12 February 1979, Goh moved on from the Defence Ministry to the Ministry of Education, where his Goh Report greatly influenced the development of Singapore's education system. He himself was described as both a key political and strategic leader responsible for the transformation of the system over thirty years from "fair" to "great", according to a November 2010 McKinsey report. He set up the Curriculum Development Institute, and introduced key policies such as religious education (subsequently discontinued) and, in 1980, the channelling of students into different programmes of study according to their learning abilities, known as "streaming". Goh served two terms as Education Minister, his first ending on 31 May 1980, and his second following the 1980 general election from 1 June 1981 till his retirement. From 1 June 1980 he was redesignated First Deputy Prime Minister upon S. Rajaratnam being made Second Deputy Prime Minister, and served as Chairman of the Monetary Authority of Singapore (MAS) until he stepped down from Parliament on 3 December 1984 at the age of 66 years. In a tribute to mark the occasion, Prime Minister Lee Kuan Yew wrote: "A whole generation of Singaporeans take their present standard of living for granted because you had laid the foundations of the economy of modern Singapore."