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Singapore
How did a geographically and economically isolated island become one of the world’s richest countries?
Singapore is a tiny island nation that has raised its quality of life more dramatically over the past 50 years than any other nation. How did this happen?
Quick History
During the colonial period, the United Kingdom controlled the region through multiple colonial systems. Singapore was part of the Malaysian colony and prospered relative to most of the Southeastern Asian colonies. Singapore was the main port in Malaysia. Malaysia’s exports of tin and rubber built the colony into a remote outpost of the England, where many of the plantation owners and bureaucrats lived.
The reputation of Britain as a benign power cratered when the Japanese overran the city in WWII without any help coming from the British forces – granted they were saving themselves from Germany.
In 1963 Singapore gained independence within the federation of Malaysia. Two years later, in 1965, Malaysia voted to expel Singapore due to local violent uprisings for independence. Since 1965 Singapore has been an independent nation.
This history has forced a culture of self reliance onto the small island state.
Geography
Singapore benefits from geographic location that has only increased in importance over time. Singapore is a small island that sits at the conflux of Indian Ocean and the South China Sea / Pacific Ocean, called the Singapore Strait. Nearly 70% of the worlds maritime trade passes through this Strait every year. It is critical to Chinese Goods going to Africa and Europe, Arabian oil coming from the Mideast to Japan, South Korea, and South America, and almost all goods shipped between India and the United States.
Singapore has taken advantage of its prime position to create a shipping infrastructure used by all nations. Singapore also has used its experience in the shipping trade to take a strategic position in air travel. Singapore’s Changi Airport is the world’s 9th busiest in passenger traffic and 12th busiest in cargo traffic.
Ethno-geography
As noted, Singapore was a bureaucrat capital and sits at the cross roads between many shipping and air routes. This crossroads has brought many different nationalities, culture, and economic workers to the island. Singapore’s largest ethnic group is Chinese, followed by Malaysians and Indians. The religions in the nation follow a similar mix. In order, the population is made up of Buddhist, “none”, Islamic and Hindu followers.
Given this hodgepodge of people, culture, and religion, Singapore’s Prime Ministers have tried to develop a unique Singaporean culture. In many ways this is successful, even if this culture is a bit fluid. The two main groups of Singaporeans look at either “The West” or China for cultural touchstones. Singapore strives to find an equally respectful and peacefully path between these two powers.
Singapore was at the forefront of international cooperation in Southeast Asia focussed on the region itself. In 1967 Singapore was a founder of ASEAN – Association of South East Asian Nations. ASEAN is a group of nations in the Southeast Asian region that resolve common problems of economic integration, military threats and issues as the arise. ASEAN does an excellent job of presenting a united face to the world powers. Their meetings often include non-members; China, USA, Australia and Japan. It has been an effective forum to talk over and cool down issues. ASEAN is often seen as a fair broker because it is an important but not powerful group of nations that make decision by consensus after consideration.
Economic Miracle
Singapore’s economy is rightly claimed as a miracle. Here are the economic Gross Domestic Product per capita numbers from independence through today. GDP/PC per capita is a rough indicator of relative wealth of the population of a country.
1965 $517 (wealth per person per year)
1975 $2,490
1985 $7,002
1995 $24,914
2005 $29,961
2015 $55,674
2021 $72,794
For comparison in 2021, other nations GDP/PC numbers are presented below and Singapore looks extremely successful.
US $70,259
UK $46,510
Japan $39,313
Switz $91,992
Lee Kuan Yew
Lee Kwon Yew was the Prime Minister of Singapore from Independence in 1965 until 1990. From the GDP data, you can see this is the period when Singapore began exponential growth of the economy. Lee’s government vacillated between authoritarian and a tentative democracy, swinging as appropriate with the twin goals or economic wealth and an engaged populace. Regardless of how “free” Lee’s government was at the time, Prime Minister Lee always focussed on Singapore’s growth. To support growth, the government directed state funding towards shipbuilding, electronics, and banking.
Lee was Prime Minster from 1965 – 1990. He was “Senior Minister” from 1990 until 2004 and “Minister Mentor” from 2004 – 2011. He died in 2015.
Today Lee’s son is the Prime Minister and is in his 5th term, starting in 1990 when his father retired from the position.
In the past few decades, the Singapore government has added tourism to the list of sponsored industries. Singapore has constructed more and more architectural gems and tourists’ facilities. The country has made excellent use of selling itself via its position in transportation and entertainment. Singapore’s current economy is dependent on tourism, financial services and government functions. This has made Singapore a haven for expats and has the highest percentage of millionaires in the world. Per wikipedia: one out of every six households having at least one million US dollars in disposable wealth. This excludes property, businesses, and luxury goods, which if included would increase the number of millionaires, especially as property in Singapore is among the world's most expensive.
The population of Singapore has its own unique features that contributed to this growth.
First, the large expat Chinese population has relations with other Chinese expat communities throughout Asia. The trade between a common culture helped establish the first local international trade bonds.
Second, Singapore’s main and official language is English. The government also uses a very traditional form of British laws. This makes business deals easy to discuss in a common language and subject to a rules based system modeled on the British and American legal systems. The long history of a steady legal system and uniform application of laws makes the nation unique in the SE Asian region.
Third, Singapore is also a hub of international talent and supports both residency for workers and low taxes. Singapore makes it very easy to open a corporation and to immigrate to. It is normally listed as one of the best and easiest places to start and maintain a corporation. Approximately 40% of Singapore’s population are made of up expats. Great jobs, international businesses and very low taxes make it an attractive place to do business.
Finally, Singapore has attracted a lot of business since Hong Kong was returned to China. A slow brain drain of companies and jobs from Hong Kong to Singapore turned into a financial flood when China changed Hong Kong’s legal systems.
Today
Singapore is a rich nation and a model to politicians around the world. However the Singapore model is often touted only in the ways it benefits the politician extolling it.
In the parts of the United States, Singapore is seen as a beacon of capitalism with its ease of business creation, low taxes, and low tariffs. Conservatives rarely mention how Singapore became rich.
China has heralded the idea of targeted growth by investment in industries of the government’s choosing. This was called “the Chinese Way” and was a strong development ideal championed by Deng Xiaoping and his immediate successors. Singapore is considered the prime positive example of a directed economy. With more recent Chinese actions in the private sector, this idea of a “Chinese Way” has fallen out of favor.
The leaders of the BREXIT movement in Great Britain heralded Singapore as a model for post EU growth. They promises a Singapore on the Thames. So far, that does not appear to be correct.
Singapore has a unique history that accelerated economic growth while leaving a (mainly) free and democratic system. It may be impossible to fully implement their policies in other jurisdictions, but Singapore does provide an excellent roadmap to prosperity and democracy.
Very interesting account! Curious how Singapore is preparing for climate change...
Hi,
So I checked as much as I could for an answer to your question about how Singapore is preparing for climate change. Here is what I found:
They have done the "normal" things, albeit at higher levels than most, for recycling and reuse. Additionally they have being working a lot on waste management - I suppose critical for a small island - and have created and use the largest integrated waste management and water treatment in the world, now in use. They reduce recyclable waste to 10% of original volume by using most waste to create energy and capturing the carbon from burning - the plant produces about 3% of he country's energy.
They have also switched about 90% of their energy generation from oil to lower polluting natural gas.
Finally Singapore operates a development training program locally with support from the UN and Japan. This is designed to help other countries economic growth, but they have added classes and training in water management and energy breakthroughs around climate change to the curriculum.
Now how much of this is green-washing I do not know, but they are much more proactive than most other countries. I found this paper to be great about it.
https://scholar.google.com/scholar_url?url=https://www.mdpi.com/2071-1050/13/17/9720/pdf&hl=en&sa=X&ei=aqeAZPGTD8WsmgHHtLzoDQ&scisig=AGlGAw982ZDKdEHQdst9FI3JRrK6&oi=scholarr