Lee Kuan Yew - DECLINE OF EUROPE (Audiobook)

The fundamental problem with the euro is that you cannot have monetary integration without fiscal integration, especially in a region with spending and thrift habits as diverse as those of Germany and Greece. The incongruity would break the system down eventually. For this reason, the Euro was destined to flounder, with its demise written into its DNA. Its difficulties over the last few years should not be seen as stemming from either the failure of one or two governments to spend within their means or failure of others to warn them of the dangers of not doing so. That is to say, the euro's troubles are not the result of a historical accident that could have been prevented if a few actors involved had made different decisions— more responsible ones— in the course of its implementation. Instead, it was a historical inevitability that was waiting to happen. If things had not come to a head in 2010 or 2011, they would have come to a head in another year. with another set of circumstances. I am not convinced, therefore, that the euro can be saved, at least not in its present form with all 17 countries remaining in the fold. From the inception of the euro project, clear-eyed and well-respected economists, including the likes of Harvard professor Martin Feldstein, had been sounding alarm bells about its inherent paradoxes. The British did not join because they did not see it working. They were not convinced about the benefits and were fully cognisant of the dangers. However, the governments which joined the Eurozone in 1999, as well as the populations that elected them, while eager to move on the single currency, were not prepared to accept fiscal integration because of the loss of sovereignty that it obviously implied. In the end, their choice to go ahead with the euro anyway reflected a misplaced belief that Europe was somehow special enough to overcome the contradictions. It was a political decision. In the United States, one currency can work for 50 states because you have one Federal Reserve and one Treasurer. When one state runs into economic hardship, it receives generous transfers from the centre in the form of social spending on individuals living in that state. And government projects. The federal taxes raised in that state will not be sufficient to pay for the federal spending disbursed to that state. If one were to keep accounts, that state might be running deficits for years. But it is a sustainable situation precisely because nobody is keeping accounts. The people living in that state are considered fellow Americans, and the people living elsewhere do not actually expect the money to be repaid. It is effectively a gift. The other extreme works too, of course— that is, Europe under a pre-euro system, with each country having its own finance minister and managing its own currency. Under that system, when one country experiences a slowdown, it can roll out remedial monetary policies because it is free from the shackles of a common currency. These include expanding the supply of money, what the Americans call quantitative easing, and devaluing the currency to make the country's exports more attractive. But these were tools that the Eurozone countries gave up as a result of their entry into a common monetary community. They did so, furthermore, without ensuring that there would be budgetary transfers similar in type and magnitude to those that depressed states in the United States receive. What do you get then when a motley crowd tries to march to a single drummer? You get the Eurozone. Some countries surged ahead while others struggled to keep pace. In countries that fell behind economically, governments were under electoral pressure to maintain or even increase public spending, even though tax receipts decreased. Budget deficits had to be financed through loans from the money markets. That these loans could be obtained at relatively low rates, since they were made in euros, not, say, drachmas, did nothing to discourage the profligacy. The Greeks eventually became the most extreme example of this decline, going further and further into the red. To be fair, the community as a whole also has to bear some responsibility, since there were rules under the Stability and Growth Pact that allowed for sanctions on governments that ran repeated deficits, but those sanctions were never imposed on any country. For some time, experts with boundless optimism hoped that these governments could close the competitive gap with stronger nations like Germany by cutting welfare programmes, reforming tax collection, liberalising labour market rules, or making their people work longer. But it did not happen. The situation finally began to unravel with the global financial crisis of 2008. Easy credit dried up, and the market's falling confidence in the creditworthiness of governments like Greece's caused their borrowing rates to soar. Germany and the European Central Bank were forced to intervene with bailouts to stop the debt crisis from spreading throughout the already crestfallen eurozone. As at June 2013, the euro community has avoided catastrophe by throwing enough money at the problem. But the 17 governments need to face up to the more difficult question of what to do to address the fundamental contradiction in the euro project: monetary integration without fiscal integration. They might try to postpone this for some time, but they know they cannot do so indefinitely, or history will repeat itself and another crisis will come along requiring bigger bailouts, which, if push comes to shove, the Germans will probably have to underwrite. Prompt action is far better than procrastination, especially since further down the road, as memory of the pain and panic of the debt crisis fades in the minds of voters, the political will to act decisively is also likely to wilt. Unfortunately, none of the current options are easy ones. The obvious solution is for the Europeans to accept fiscal integration. The European Central Bank becomes the Federal Reserve, and instead of different finance ministers, you have one to supervise the budgets of all the Eurozone countries. This will be a move towards what European Union enthusiasts call an ever-closer union and will cause the Eurozone to look more and more like the United States. Will this happen? Will electorates willingly hand over a significant part of their nation's budgetary powers to a central authority and trust that authority make decisions on taxing and spending that are fair to each nation and at the same time beneficial to the eurozone as a whole? It is a remote possibility, and I frankly do not see it happening. But if it does happen, it would probably be the best outcome on balance for the rest of the world. The outcome that is more likely but less desirable is a breakup. A return to separate currencies. It will be painful and confusing for all involved. You are a Greek or a Portuguese or a Spaniard and you have borrowed money in euros. Now you have to pay back in euros, but at what exchange rate? The old rate before amalgamation, or some arbitrarily set new rate? Breaking up will be messy and costly. In the lead-up to such an event, There is great danger of bank runs occurring, as rumours prompt ordinary people to withdraw their savings in euros in the fear that overnight those savings might be forcibly converted into a new and probably much devalued currency. The uncertainty would also discourage private investments— another reason why procrastination is bad. For countries outside the Eurozone, especially those that export heavily to Europe, including China, it will also mean considerable economic dislocation. For a while, the global economy is likely to slow down as a result, although trade will eventually resume after a period of disruption and things will settle down. There is a third outcome that falls between a complete breakup and full integration. It is a partial breakup. Many scenarios are possible under this category, ranging from the euro surviving nearly intact, with just the dislodging of one or two currencies to most countries being affected in one way or another, perhaps with some going it alone and others having to choose between 2 or 3 new communities— what experts call a 2-tiered or 3-tiered Europe, with each tier going at a different speed. A key question here is whether there is a core Europe, relatively homogeneous when it comes to economic competitiveness, that can hold together despite great centrifugal forces? I believe there is one. Any such core would clearly be led by Germany, the most hardworking of the lot, and consist of Belgium, the Netherlands, and Luxembourg. I do not see the French becoming as disciplined as the Germans. They are more likely to form the core of the second tier. Some might argue that the euro, and the European Union by extension, should be seen as successful since peace has indeed prevailed and war in the community is now unfathomable. But one could just as easily argue that peace was a result of other factors. The consequences of the Soviet collapse mean that in the foreseeable future Russia is no longer concerned with confronting the West militarily since its energies have rightly been focused and will continue to be on economic development. The security guarantee by the Americans in the form of the North Atlantic Treaty Organization, furthermore, has rendered all but impracticable any possible military action emanating from other non-NATO powers. Within the community, the Germans, having been beaten twice in 2 world wars, were never going to start another one. They've had enough of it and just want to carry on with their quiet, comfortable lives. For this, they have been leaning over backwards to try and accommodate the others. In the end, the euro's record will be seen by posterity as a dismal one, and any attempt to salvage political credit for the single currency project will come up against cold, hard reality. Even as Europe attempts to sort out the problems associated with the single currency, The continent cannot afford to take its eyes off other underlying causes of its relative lack of dynamism: the welfare state and rigid labour market laws. What seemed like good ideas when conceived and gradually introduced throughout Europe in the aftermath of the Second World War have become in the last few decades increasingly unaffordable, especially with the emergence of developing economies in Asia. If Europe is to avoid sustained lethargy and regain the energy and industriousness it was once known for, it has to make bold and painful reforms to reduce its elaborate system of entitlements and to liberalize hiring and firing rules for companies. As a student in England after the war, I remember being enamored of the early efforts of the Clement Attlee government to fund generous cradle-to-grave benefits for one and all. I was pleasantly surprised, for example, to be told that I did not owe any payment after receiving a brand-new pair of glasses from the optician. They came with the compliments of the National Health Service. What a civilised society, I thought. What I did not understand at the time, but did later, was the potential of such blanket provisions to promote inefficiency and inaction. The intentions were entirely noble. Having gone through 2 world wars which destroyed almost everything, the governments and peoples of Europe wanted a quiet, peaceful life for everyone with the burden shared equally. The people who fought and paid the price in blood were not the elites as much as the proletariat. There was a strong feeling of indebtedness towards the lower classes. So when there was a move by politicians calling for fairness and for social welfare policies that looked after the unemployed, the sick, and the old, Widespread support was secured fairly effortlessly. For many years, Europe could afford these policies. The Marshall Plan helped most of Western Europe get back on its feet by fueling a relatively robust recovery from the desolation of war. Workers' salaries rose, and the taxes they paid could fund the welfare state. But nothing stays static. The game eventually changed for Europe. As the world became more globalized, the lower-skilled European workers found themselves competing not just among themselves but with workers from Japan and later from China and India as well. Exports were undercut and industries gradually moved their production centers to Asia. Naturally, the wages of European workers also declined. Without the entrance of China, India, and Japan, the welfare state would probably have remained viable for quite some time. But with their entrance, it did not take long for welfare to become unsustainable. The Europeans, of course, tried their best to evolve towards the production of higher-value goods and services, but there is a limit to how much a country can do on this front. You may want to move up the scale, but significant segments of the population may not be able to move because it would involve learning new skills, which takes time Energy, and above all, will. Moreover, the Japanese, the Chinese, and the Indians are not incapable of upgrading themselves. This is an unrelenting contest of constant self-improvement, and the gains you can make on your competitors in any given year are usually meager. It finally depends on the innate qualities of a people and the way they are organized and governed. If it were Europe versus Fiji or Tonga, Then it may be true that the latter have no hope of catching up. But we're talking here about Europe versus Japan, Europe versus China, and Europe versus possibly India. It is a completely different story. Laws and policies unfortunately do not change as easily as global circumstances do. Entitlements once given are notoriously difficult to take back. There is a tremendous penalty in votes for any government that has the guts to try. Margaret Thatcher of Britain used what political acumen and capital she had to try to reverse the policies. In the end, she succeeded only in half reversing them. The other European leaders must have watched and seen her partial success, but they faced electorates that were in no mood to give up what had already been taken for granted over the years. The problem had become entrenched for many of these European countries. If welfare spending had simply stagnated at a certain level, the situation might still be under control. Instead, such spending has a tendency of growing over time, not just in absolute terms but also in terms of its share of a nation's total income. This is partly because populist pressures prompt the expansion of existing schemes. But more important perhaps is the uncanny ability observed by veteran Swedish journalist Ulf Nilsson of the welfare system to generate its own demand. He wrote in 2007 insightfully, welfare produces clients. Assurance against injuries in the workplace produces injuries. The refugee policy Refugees. The ability to retire before retirement age. People who retire early. In other words, some rational citizens of these European countries invariably end up gaming the system, whether consciously or unconsciously. In some cases, people reportedly collect unemployment benefits which can go up to 3 quarters of their last drawn salaries while engaging in part-time work in the informal economy. This gave them 2 sets of income, to the loss of the taxpayer. According to OECD statistics, by 2007, the average European country in the OECD was devoting more than 23% of its GDP to government social spending. This figure was markedly higher in some countries. 25% in Italy, and 28% in France. The average non-European OECD country, by contrast, sets aside just 17% of its GDP for such spending. In the United States and Australia, the proportion is 16%. The most pernicious effect of the welfare state, however, lies not in its inflexibility or its unaffordable nature, but in the negative effect it has on the individual's motivation to strive. If the social security system is designed so you get the same benefits whether you work hard or lead a more laid-back lifestyle, why would you work hard? The spurs on your hinds are not there. The self-reliant attitude is more common in America because even as the unemployed are offered a helping hand, there are measures in place to make sure they are actively encouraged, even compelled, to find work. It is a different philosophy, one based on the principle that work makes the individual and society better off, and underpinned by the belief that overly generous benefits tend to become a debilitating constraint on drive and an inadvertent suppressor of incentives. The European model has created a class of people who have grown used to the subsidies and therefore lack a strong work ethic. On top of this, Europe is not budging on unnecessarily stringent labour market rules, regulating the right of companies to lay off workers and the minimum length of annual holidays, among other things. They are digging their heels in at a time when flexibility is becoming ever more important in the new economic landscape. Unions and socialist parties in France and its neighbouring countries have done their level best to perpetuate the myth that workers can hold on to their former benefits without the economy suffering too much. Students are demanding, as a right, the same job security that their parents enjoyed. In other words, they are demanding that the world stand still for them. What they do not realise is that these measures will eventually hurt the working class itself. Companies penalised for retrenching react rationally by moving much more cautiously on hiring even when the economy starts growing again. The jobs simply go elsewhere. The statistics bear this out. Among European OECD countries, 8 of the top 10 with the most liberal labour laws in 2008 were also among the top 10 in terms of low unemployment averaged over the previous decade. The opposite is also true. Seven of the top ten in strictness of labor laws were also in the top ten in terms of high unemployment. But how do you change these policies now? You have unions marching through the streets of Paris who will not buy the argument that global competitive forces have rendered the French workforce uneconomic, and that they have to give up their frills. They would say, no, we keep these frills and try and compete. From very early on, I made sure that Singapore would not go down the same path on welfare and labour laws. Having watched the British as they were implementing some of their policies in the 1950s, I decided that that was the way to ruin. We have not allowed unions to compromise our competitiveness and have instead engaged them in a tripartite relationship. with the government and businesses that is based on non-confrontational negotiation. We stopped all free prescriptions for medicines, making sure the charges came closer to reality over time. We have provided assets, not subsidies. The government helps you buy a home and makes top-ups to your Central Provident Fund account. If you want to spend the funds, you are free to do so, but you will have to face dire personal consequences when you retire penniless. If instead you keep the assets, allow them to appreciate in value and earn interest from them, you will reap the benefits in the long term. In other words, individuals take responsibility for their own lives with some government help. I believe that if we adopt the European system, we will have much less dynamism in our economy. We will pay dearly for it. Bitter years await Europe. The Europeans have chosen to go down the path of welfare and labor protection due to the unique historical circumstances they were in. Nobody can deny that their choices have resulted in kinder societies with less of an underclass and a smaller gap between winners and losers when compared to America, but it has come at a price. If they were to forego these policies, their GDPs would probably grow 1 to 3% faster each year. For some time, life will remain comfortable for many Europeans because they have reserves built up from the good years. But whether they like it or not, the comfortable and cosseted post-war world they have created for themselves will eventually be done in by external forces. A new social contract will have to be negotiated. A distinctive set of countries sitting in Northern Europe has not been hit as hard by some of the problems facing many of the countries in continental Europe. The Scandinavian countries, as I see it, deserve a wholly separate analysis because they are sui generis, or a unique case apart from the others. Those who argue that welfare systems can be made to work often point to Sweden, Norway, and Denmark as demonstrations that extensive social safety nets paid for by the government do not always have to be accompanied by the associated excesses. Therefore, to cite the failures of France, Italy, or Spain instead is to make a strawman case against the welfare state, they conclude. The first rebuttal to this line of argument is that the evidence shows that even the Scandinavian countries have not entirely escaped the costs of socialist policies. Unemployment in Sweden, for instance, stood at 7.5% in 2011, not that much lower than, say, Italy, 8.4%, and very much higher than advanced Asian economies such as Japan, , South Korea , and Singapore . That said, one could acknowledge that the Scandinavian countries have indeed performed significantly better than their European neighbours in terms of growth. While GDP per capita in US dollar terms grew between 2002 and 2011 by an average annual rate of 5.3% in Italy and 6.1% in France, it grew over the same period by 6.4% in Denmark, 7.3% in Sweden, and 8.9% in Norway. They have managed to do so furthermore while maintaining high levels of social spending, a phenomenon in need of further explanation. For starters, it is worth noting that Sweden, Norway, and Denmark are considerably smaller countries than France, Italy, and Spain. The combined population of the Scandinavian trio is barely one-tenth of the combined population of the latter trio. Norway, at 5 million, has fewer people than Singapore does. The scale of problems, the diversity of interests, and the complexity of governance are therefore vastly different in Scandinavia. More important than size, however, is composition. The key to understanding Scandinavian exceptionalism. Sweden, Norway, and Denmark have relatively homogeneous populations, giving these nations an internal cohesion not possible in other parts of Europe. Their people have a much stronger sense of oneness and togetherness. Each of the 3 countries thinks of itself as one tribe, with members of the tribe prepared to suffer for one another. You are willing to work hard not just for yourself but for your tribemate because you feel almost that you are helping a relative as opposed to, say, a group of layabouts from some strange region of the world. Faced with the punishing tax rates welfare states have to impose to balance budgets, well-heeled tycoons and other high-income individuals are less likely to flee a one-tribe society even though they lack neither the options nor These are furthermore the top talent in society, those most likely to generate wealth and opportunities for themselves and others. When you are one people and one family, you will be less skeptical about having to pay taxes to support the less well-off among you. But when you have large numbers of foreigners in your midst, and the law insists that there should be no discrimination in the disbursement of welfare benefits, The attitude changes. When I visited Norway in the 1970s, it was almost completely a white society. It is a beautiful country of breathtaking mountains and glaciers, very cold and placid. I could feel the solidarity of the country. In a country like that, it is not just that those who work are willing to pay more taxes. Those who are not working are also less likely to abuse the system. Again, because there is a sense of belonging to the community. In other words, even those who are on the dole are less laid back. All this has been changing slowly but surely in the last few years because the Scandinavian countries have adopted a liberal policy on taking in refugees and persecuted people. Each year, Sweden accepts as many as 2,000 refugees. Most of them from African nations, and there are now over 80,000 refugees living in the country. How this influx will alter the communitarian outlook of its people remains to be seen, but if the pattern observed in other countries is anything to go by, the consequence, sooner or later, will be a change in the people's own perception of this largesse that they are laying out for the lower-income groups. For now, Scandinavia is much less ethnically diverse than the rest of Europe. Across Europe, the look and feel of societies today is very different from the time I was living there as a student just after the Second World War. In London, I was in search of a vacant room and had to phone landlords to make appointments for viewings based on the advertisements they had put up. Over the phone, I told them My name is Lee, but I am Chinese. So if you don't want a Chinese tenant, tell me so and I don't have to make the journey to look at the flat. Lee is quite a common English surname, and I wanted to avoid from the outset any unnecessary misunderstanding. True enough, there were landlords who advised me politely not to make the trip. That was British society at the time, still predominantly white and in many ways discriminatory towards non-whites. Over the years, because of declining birth rates and the need for labor, European countries have taken in migrants from Asia, the Middle East, Africa, and Eastern Europe. Immigration has alleviated economic and demographic pressures, but has also given rise to a different set of problems. In Germany, there are at least 2.5 million people of Turkish descent. Discomfort among Germans at the size of this group has sparked a backlash, with occasional but worrying reports of racially motivated crimes committed by extremist locals. In France, the rise of minority-dominated banlieues around large cities, especially Paris, has become a major source of headaches for the government. Riots sometimes take place because the residents of these areas feel marginalized. Unrest in 2005 spun out of control, with nearly 9,000 cars set on fire across the country and a 2-month-long state of emergency declared. The sense of being marginalized and disadvantaged exists even among the ethnic minority university graduates. Official data shows that among French nationals, the unemployment rate of graduates of African origin is 3 times higher than that of graduates of French origin. Britain is also much more heterogeneous. Anyone walking through the city center of any major English city will be able to tell you that. However, the angst has gradually shifted away from the Chinese to the other ethnic groups because the Chinese are more self-effacing and are seen as giving the least trouble. Many among the first generation of Chinese migrants were restaurateurs, and their children became professionals. The attention these days is more focused on the Indians, Pakistanis, and Bangladeshis who tend to live together in certain neighborhoods in large numbers. There are schools that are completely dominated by ethnic minorities because the immigrants have not intermingled. The religious element adds to the complexity of the problem. Many migrants happen to be Muslims, and in recent years they have become more vocal about wanting to build mosques and minarets. The visual impact this has on the traditional European architectural landscape has done nothing to assuage the fear already building up among local populations that the culture and the communities they have grown up in are being changed by troublesome outsiders. If the migrants were Christian, it would probably change the complexion of the problem, but a divide remains because many of them are Muslims and the dominant religion in Europe is Christianity. Whether or not many Europeans go to church is a separate issue. The people of Europe are not as open to immigration as the people of America. They have not succeeded in integrating immigrants already residing permanently among them. America is much more receptive to newcomers because it is fundamentally an immigrant society, with the Pilgrim Fathers arriving just 400 years ago. Many immigrants have risen to the top of American society, including the likes of Jerry Yang, the Taiwanese-born entrepreneur who co-founded the internet firm Yahoo. Europe, on the other hand, consists of old, established nations that are very proud of their literature, culture, and long history. In the last 2 to 3 years, European leaders including David Cameron, Nicolas Sarkozy, and Angela Merkel have separately declared that multiculturalism has failed in their countries. In other words, the Turks who have settled in Germany have not become Germans, nor have the Algerians and Tunisians in France become French. Increasingly, Europe sees these people as indigestible. Race is at the root of this inability to assimilate, although religion, culture, and language are also factors. But it is also not possible for Europe to stop the inflow because these immigrants meet a pressing domestic need. So we may well see European governments letting in immigrants when they can, only to hit the brakes when electoral cycles come around and far-right parties outflank their moderate opponents with angry rhetoric. However you look at it, they face a catch-22. When Europe emerged from the devastation of 2 world wars, the idea of European integration seemed most natural. Here was a continent of countries that held many things in common. They had all lived through the Renaissance and the Enlightenment and had come away with one European culture, a similar way of thinking about themselves and the world. Christianity was the dominant religion. Going further back in history, these countries shared a heritage from the days of the Roman Empire, which gave them a certain uniformity in the way they organized society. Yet, for all their commonalities, what came to the fore dramatically in the 20th century were their disagreements and their separateness, as they were led by their worst angels to engage in brutal, internecine, and protracted wars resulting in the death of millions. Integration, then, became a central mission for European leaders. It represented their best hope for enduring peace. It was the clearest way for the countries to build on their similarities, set aside their differences, and bind the fates of their nations closer to each other so that they would never again have to suffer such horrible consequences that were arguably of their own making. Having decided that this was an important project, they went about building the necessary institutions. They signed the Treaty of Paris in 1951, establishing the European Coal and Steel Community, the pioneer of the EU. In 1957, the Treaty of Rome, which proposed the creation of a common market and common agricultural and transport policies, was agreed on. The Community later evolved into the European Union and was expanded to include 27 states after the end of the Cold War. Of those states, 17 adopted a single currency, the euro. Integration holds great promise apart from just peace. A Europe that achieves singularity in purpose would have much greater economic clout and, more significantly, a much bigger voice in international affairs. Put simply, it would be a more powerful Europe. If the Europeans were to deepen its integration efforts and go on to have one finance minister and perhaps even to have one foreign minister and one defense minister, their augmentation in hard power terms would be enormous. Consider the people of the United States of America. They are basically Europeans who have been transferred to another continent and have dropped their tribal loyalties and their different languages. If Europe integrates to the same extent and becomes the United States of Europe, there is nothing the Americans can do which they cannot do. Europe as one entity is more populous than America— 500 million versus 310 million— and has an economy one-sixth larger than America's. Such a Europe would certainly be in the running for the world's leading superpower. Alas, all the signs point to the impossibility of integration. They have so far failed to make a single currency work and are not likely to progress to a single foreign policy or a single military. They have individual histories, each going back many centuries. Each nation is proud of its own traditions. Above all, they want to keep their languages alive. There is glory and literature behind it. America decided to start afresh and create a new literature, but Europe will not be able to do so. Even though English is already the second language in all the other countries, those on continental Europe will never accept it as the single working language. What then will be Europe's place in the world? They will be smaller players on the international stage. In the face of dominance by the major powers such as the US and China, and maybe later on India, Europe will be reduced to the role of supporting actor. Most of the European countries will be treated, quite rightly, as ordinary small states. Germany might be able to carry its weight alone thanks to its population and its economic success, although it will not want to raise its head above the parapet because it's still filled with guilt for having killed 6 million Jews during the Holocaust. The British will retain some influence because of their special transatlantic relationship with America, but otherwise Europe cannot hope to count for much at a table where the US, China, and India are defeated, even if some of the European leaders may still be reluctant to admit it because of their historical sense of self-importance and their long experience in playing the game of international affairs. In the end, you are comparing nations of 40, 50, or 80 million against 1.3 billion Chinese and 1.2 billion Indians. The Chinese especially will find that a fragmented Europe makes life easier for them. They can deal with each country individually rather than in a group. Each European country will be more dependent on the Chinese than the Chinese are on them. This will be even more so as China's economy moves towards being driven by domestic consumption. Europe's declining international voice, however, will not result in its living standards falling by the same magnitude. If it can survive the breakup of the euro, it goes back to what it was. Europe loses its voice in the world, but the countries in it have a high standard of education and skills and can make a good living. There will be some decline, but each country will reach a steady state at its own level of competitiveness. The Europeans will lead lives that are happy enough. I write more in sorrow than in derision about Europe's inevitable decline. I do not want to run Europe down. The Europeans are a very civilized people. Yes, they were colonialists—the French, the Belgians, the British, and the Spaniards—but the French had their mission civilisatrice, to transfer their civilization to the Africans. And on the whole, the British left institutions behind them. Including in Singapore. We had the rule of law, we had statues, we had the English language, and we were wise enough not to change any of that. They have helped us to grow. The institutions were already working. What I did was to make sure that we did not subvert the institutions but reinforced them. The Belgians, in stark contrast, left Congo in a mess. They extracted the raw materials, and when the time came to leave, the place just broke up into tribal warfare. Congo is still in trouble today. In Guinea, Charles de Gaulle was so angry with Ahmed Sékou Touré, who was a forceful freedom fighter, that they ripped off all the electric and telephone wires before they left. Guinea has still not recovered from that. They did not do that to all French colonies, but they did that to Guinea because Sékou Touré baited the French government. Thus, Sekeltore inherited a non-working system, which he never got back into working condition. These things make a difference. If the British had left me with the French or Belgian situation, I am not sure I would have been able to build it up to today's Singapore. The British left in good grace. The main building of the Istana was occupied by the last governor, Bill Goode, who handed it over intact, everything in order. He took me around and introduced me to the butlers and so on before leaving. From here he went to North Borneo for a while and then retired. We should be thankful for their system and their graceful exit.