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The Economist explainsWhy Singapore became an economic successMar 26th 2015, 23:41 BY
ECONOMIST.COM

WHEN it started life as an independent, separate country in 1965, Singapore’s prospects did not look
good. Tiny and underdeveloped, it had no natural resources and a population of relatively recent
immigrants with little shared history. The country’s first prime minister, the late Lee Kuan Yew is credited
with transforming it. He called one volume of his memoirs, “From Third World to First”.

Why did Singapore become an economic success?

First, its strategic location and natural harbour helped. It is at the mouth of the Malacca Strait, through
which perhaps 40% of world maritime trade passes. It was an important trading post in the 14th century,
and again from the 19th, when British diplomat Sir Stamford Raffles founded the modern city.

Now it is at the heart of one of the world’s most dynamic regions. Under Mr Lee, Singapore made the
most of these advantages.

The astonishing record of Lee Kuan Yew's Singapore

Second, under Mr Lee, Singapore welcomed foreign trade and investment. Multinationals found
Singapore a natural hub and were encouraged to expand and prosper.

Third, the government was kept small, efficient and honest—qualities absent in most of Singapore’s
neighbours. It regularly tops surveys for the ease of doing business.

But the island city is not ideal. Although clean and orderly, it has harsh judicial punishments, a tame
press and illiberal social policies. Homosexual acts, for example, remain illegal. Protest demonstrations
are rarely permitted.

Mr Lee saw his authoritarian style of government as an essential ingredient in Singapore’s success,
emphasising the island’s vulnerability in a potentially hostile neighbourhood.

But younger people now question whether Singapore really is that fragile, and resent the restrictions on
their freedom.

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sharkroroApr 7th, 14:21

The rich poetic imagery in Singapore impresses all the world results from the multi-ethnic eccentric and
colourful civil society. Like in pop culture, JJ Lin’s shining magnetism who just appeals for J-pop Empress
Ayumi Hamasaki to collaborate makes remember a decade ago’s gold hit “Green Light” by Stefanie Sun
Yan-tz who sang birthday song at Lee Kuan Yew’s 80, that shows tropical Asia’s vitality. Behind the varied
abundance of wealth is a hard-working success story.

When its sovereignty was founded, many Asia’s nation began to seek self-rule development. The
majority of them were where strongman ruled for decades. It faced economic embarrassments for lack
of natural resource while the neighboring Malaysia and Indonesia broke up military conflict. Thus, he
promulgated the compulsory military service and helped secure the nearby location by founding the
ASEAN with 4 nations in 1967. Lee made his first official visit to Indonesia on 25 May 1973, just a few
years after the Indonesia–Malaysia confrontation under Sukarno's regime. Relations substantially
improved as subsequent visits were made nearby.

He, in person at that October during his first visit to US, visited a large amount of Chicago’s industrial
entrepreneurship he briefed on how it developed into a 2m-resident city from 1120 small fishing village.
Like this kind of introduction, Lee’s strive for the excitement of capital inflow got some grade about 1970.
Unlike the rest of Asia’s leaders distant from Japan’s economic expansion in the shadow of WWII, he
actively welcomed Japan’s emerging conglomerate’s investment which indeed later encouraged its
people to establish big business decades later successfully. Meanwhile, its administration aimed for
Asia’s No.1 diversified R&D model, entailing practicing a suite of business-oriented bill, promoting
bilingual education and setting up DBS and institution involving public housing (HDB) and economic
planning on oceanic transportation and finance. Before then, people there earned livings only by rubber
and canned food industry. In 1966-1973, its double-digit percentage of economic growth proves his
governing capability. In 1979, a series of upgrading industrial policy went workable, making it enter into
the growth second stage in a switch to capital-intensive industry and service.
“Asians are in little doubt that a society with communitarian values where the interests of society take
precedence over that of the individual, suits them better than the individualism of Americans. Asians see
Japanese achievement standards as higher.” said he.

In association to the adaptive modernization, it under Lee’s rule practiced the authoritarian popular in
many Asia nations ever, a rather moderate one. He makes democratic ideas “penetrate into” people’s
daily life while demanding “disciplined” politics inclined to right-winged orientation and limitation of
individual liberty and opposition party’s participation in election.

His ideology proves fitness to its society in line to political stability under one-dominant party system. He
and his son carry out the primary election where “Apple” is picked up and then coherently makes PAP
join election by national voters. The governing PAP yet dismantled the socially strict law, even limiting
the wine by part-time control just before.

For instance, its central provident fund scheme, comprised of compulsory savings and investment,
connects to a well-designed inheritance tax’s system in a mirror of Chinese cultural heritage’s spirits.
Influenced by British Labour Party he had joined as a pupil, he put emphasis on the confrontation
between workers and capitalists. In 1968, he persuaded Trade union organizations to cooperate in the
wages and self-restraint rule in respect of corporatism, after 153-time worker striking during 1961-1962.

By principle of check and balance, PAP is easy to lead to absolute putridity. Since recruiting foreigner
prestige of all walk is given patronage by PAP’s policy decade long, its wealth gap severely broadens by
hundred-time distance. The ideas make it get the wealthiest per capita of GDP but the tumultuous and
declining situation is in the foreseeable future.

Its president Dr. Tony Tan Keng Yam called him “The Last Post Singapore National Pledge” in funeral. His
pragmatism is a fashion among Asia and Africa’s developing economy. Also, he updated its
acknowledgement as soon as possible all life. Lat June, he talked to Nikkei’s CEO Kita Tsuneo in an
interview about “the non-stoppable trend of media digitalization”. His speaking influences many nations’
developing approach much globally, but this isn’t the only factor that determines its future. The time still
passes by and its reference to politics is indeed a good lesson to developing nation. Praising this style of
authoritarian sounds like a good injection, whereas it may become the cause for alarm in tomorrow’s
order, although these rulers keep people’s affordable living standards for a while.
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guest-oelenjeApr 7th, 00:39

I some how don't see illeberal social policies a disadvantage. Call me old school but some form of
parenting in government is not a bad thing.

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Mooches Foreside JrMar 28th, 07:44

When is The Economist publishing the last two thirds of this article?

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Kurt LessingMar 28th, 06:23

One important factor of Singapore's success the Economist constantly overlooks because it clashes with
its neoliberal mantras is, that Singapore never privatized infrastructure.

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Joel Salazarin reply to Kurt LessingMar 28th, 07:32

Another important factor is that you don't seem to know that correlation doesn't imply causation.

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hedgieMar 28th, 05:31

An accident of History that a place of desperate immigrants left behind by the British and the aggression
of its neighbors to marginalize it, flocked around a a committed team of Men led by LKY to do their best
out of the place with limited resources.
Their success astound even themselves. This freak accident is not a Norm. LKY has not been fully in
charge for the last 20 years and already the green shoots of croynism are sprouting.

After this well deserved respect to LKY, the daily realities will set in with an economy with artificial
beauties but no underlying strength to take advantage of today's global economy faltering.

His legacy of an amazing nexus between the People and Him will be lost with the excessive new
immigrants and the present sub par quality of leaders. External Powers not likely to stand idle in not
feasting on the Reserves.

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guest-oilwoemMar 28th, 02:48

"the government was kept small, efficient and honest"

It sounds just like Brazil...

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kommonsensesin reply to guest-oilwoemMar 28th, 03:25

take it easy, brazil is really not that bad as government goes. every government has its armpit spots,
that's no cause to be pessimistic about it. go visit brazil often, it may well worth your while.

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guest-oisonswMar 27th, 21:24

Given enough tries and time, even a monkey will type up a Shakespeare - very small chance that will
come true given enough trials. What you have in China is a demonstration of that principle.

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kommonsensesin reply to guest-oisonswMar 28th, 03:10

Silly, why start them only at the entry level stuff Shakespeare, try the sophisticated lao-tze something. in
that case, even you could be a demonstration of that principle.
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guest-oisonswMar 27th, 21:21

China is still a second rate power which can literally be wiped off the face of the earth by at least two
countries. You dimwits are thumping your chests based on the last thirty years of success (out of a very
long history plumbing the depths of despair, most recently illustrated by the reign of Mao). Give it
another 30-40 years when half of China will be grandparents. India will wipe the smirks off your faces
and give you the thumping you deserve.

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neroburningromin reply to guest-oisonswMar 28th, 03:11

problem is one of those countries is more likely to be at war with the other of those two countries. i'll let
you figure out which ones they are. and as for india, they can barely control their own country, let alone
industrialise it and take china on. as general patton said warfare is about 'who can get there the fastest
with the mostest', and given india's ramshackle to non-existent infrastructure, I wonder what their
master plan is, to march up the Himalayan mountain range to get annihilated by the Chinese? that was
their grand strategy 50 years ago and if they are going to use the same tactic twice, it will be the Indians
who will get the harsh slap of reality to the face.

oh and before you counter that india has numbers, look to what happened when tsarist Russia in WWI
based their strategy upon against the industrialised Germany.

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tk1286in reply to guest-oisonswMar 28th, 13:14

Lol. This is what I call the Indian syndrome. Forget the fact India's GDP is a fifth of China's, so long as its
growth rate inches a few decimal places above China's, people start losing their heads.....

Better grandparents than starving children. Emancipated and sickly.

Well, how did the last war turn out for you? Fight those you have a chance of beating, like the
Bangladeshis or the Pakistanis, a welterweight shouldn't pick a fight with a heavyweight now. As for
'despair', I'd think the Indians have suffered far more and far worse throughout their history than any
other people in existence.

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Expand 1 more reply

farsightedMar 27th, 17:47

The key element is they are 90% Chinese. If they had been 90% Indian you might have gotten something
like the Maldives or Mauritius--90% African Haiti or Detroit--90% White New Zealand. Also not
mentioned is the Chinese could attract investment and money from Hong Kong and Taiwan.

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Connect The Dotsin reply to farsightedMar 27th, 18:28

I would compare the development of Singapore in the last 50 years to the development of Israel in the
last 50 years.

===

The Chinese are the Jews of Asia.

Or the Jews are the Chinese of Europe.

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guest-oisonswin reply to farsightedMar 27th, 20:57

was Mao Indian?

Singapore got lucky that Lee Kwan was a less virulent variant of Mao. Or you would not be here to be
claiming your non-sense.

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Expand 3 more replies

David HeitelMar 27th, 11:57

All of these comments are more informative than the article. I expect more depth from The Economist.

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kommonsensesMar 27th, 09:24

Not to take away anything from singapore’s great success under late KY Lee which is unprecedented,
admirable and exemplary, caveat exists also for the success.

1. The Singaporean success was made easier because there was no strong nation nearby in its
neighborhood. None of Malaysia, Indonesia or other ASEAN nations was economically strong or militarily
powerful then at the time of Singaporean rising. Not even india and china for that matter. and western
power were busy building themselves or fighting cold war with ussr block and not into the 'pivot asia'
thing yet. Such ambiance made it easier for Singapore to stand out.

2. the size mattered. With population of less than 5.5 million, Singapore is on the par of Denmark,
finland, UA Emirates, Slovakia, El Salvador, and Libya in population department to name a few. It did not
even rated a big city for nations with mega cities. With everything else being equal and assuming the
difficulty index of governance is linear with population size, then the usa (population 313 million say) is
57 times harder to govern and china (population 1,360 million say) is 247 times harder to govern than
governing singapore.

Now assuming the difficulty index of governance is proportional to the square of population size, a
rather reasonable assumption, then the us is 3,249 times more difficult and china is 61,009 times more
difficult to govern than to govern Singapore. Now one can appreciate the kind of tough jobs mr. Obama
and mr Xi are having while admiring Singaporean success story.

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kommonsensesin reply to kommonsensesMar 27th, 09:46

and thirdly, the simplicity of ethnic components make up in Singapore may also helped Singapore's
success. Singapore has mainly Chinese, malays and Indians, whereas china has 56 ethnic groups (Han
being 92%), india has well over a hundred ethnic groups, and the usa, well, they don't call usa the
melting pot for nothing.

the point being, for india or china to be as successful going from poor and developing to rich and
developed economy, the cost (social, political, fiscal, etc, etc.) of governance would be tens of thousands
higher than what's being paid by Singaporeans.

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Niels Kristian Schmidt2in reply to kommonsensesMar 27th, 10:01

so big countries should split into 100 smaller units, the conclusion seems

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Expand 5 more replies

guest-oislsoaMar 27th, 07:00

Ha-Joon Chang says that there is no single economic theory that can explain Singapore's economy

"This is what I call the 'Singapore problem'. If you read the standard account of Singapore's economic
success in places like the Economist or the Wall Street Journal, you will only hear about Singapore's free
trade and welcoming attitude towards foreign investment. You will never hear about how almost all the
land in Singapore is owned by the government, while 85% of housing is supplied by the government's
housing corporation. 22% of GDP is produced by state-owned enterprises (including Singapore Airlines),
when the world average in that respect is only about 9%.

To put it bluntly, there isn't one economic theory that can single-handedly explain Singapore's success;
its economy combines extreme features of capitalism and socialism. All theories are partial; reality is
complex."

http://www.huffingtonpost.co.uk/hajoon-chang/economics-facts_b_5511565.html

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sikko6in reply to guest-oislsoaMar 27th, 07:20

Singapore is a capitalist version of North Korea. If you add capitalist elements into North Korea, that's
Singapore. Singapore's press freedom index is ranked 153 in the world. That's hardly a free country!
Singapore's economic success is a hype. Singapore Per capita GDP is $55,000 which is similar to that of
America which is $53,000. Singapore is a city state. If you compare Singapore against New York or
London, Singapore's economic success is a dwarf! It's just a hype.

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bennfujiin reply to guest-oislsoaMar 28th, 07:02

Reminds me of my favourite book (title) about Japan's post-war economic achievements: 'Where
Communism Works: The Success of Competitive Communism in Japan' by D.M. Kenrick

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sikko6Mar 27th, 06:32

Singapore's public debt is 100% GDP. You can assume Singapore government pays 3% to 5% GDP for
interest payments only. This will translate 10% government budget. The debt will only grow and
someday it will explode.

This is a great achievement! Singapore girls. Great way to fly!

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Clay Douglassin reply to sikko6Mar 27th, 07:54

Well, it is a great airline.

Clay Douglass

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MinorityReportin reply to sikko6Jun 24th, 17:00

singapore only borrows 100% of gdp because its cost of borrowing is so low. it borrows to invest outside
of singapore and makes a huge spread b/w its low cost of borrowing, and the high rate it lends out to

why is borrowing so low for singapore?

because of its huge stash of cash. SWfs and reserves totaling between 500 billion - 1 trillion USD
depending to who you listen to. An net investment position that is in the top 4 per capita, along with
other ultra-haves like Luxembourg, UAE, Qatar

that wealth cannot be kept secret for long. if not redistributed to the very significant underclass that is
present in singapore, it is a matter of time before it attracts and nurtures a kleptocracy

the grapevine amongst the highest placed singapore business and political establishment is that the Lee-
Kwa clan is worth US$40 billion. Outrageous you say? Well, when the counter argument is that Singapore
is probably valued at $4 trillion, the Lee-Kwas are only charging a 1% fee for the work they put in.

The regime should be more transparent and show their numbers. Opacity in the long ruin only invites
corruption and malfeasance

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cZQezs2p4hMar 27th, 04:23

That Singapore has "no natural resources" is not true. Singapore has an enviable geographical position,
which made it a natural trading point. For that, Singapore was fought over by powers such as UK and
Japan. This is also the reason that Singapore was richer than its neighbors long before Lee appeared.

The relative scarcity of natural resources made Lee's job easier, not more difficult. Economists know that
natural resources can hamper development. The world's richest nations, such as Japan and Switzerland,
are largely deprived of natural resources. Those with them, such as Nigeria and Saudi Arabia, tend to
remain underdeveloped.
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guest-oissenlin reply to cZQezs2p4hMar 27th, 11:39

Singapore is an oil-rich country.

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Michael Dunnein reply to guest-oissenlMar 27th, 22:06

But for refining, trading and as a base of operations for upstream activity in nearby countries (say field
services?), no?

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guest-snwlwjsMar 27th, 02:05

Citing Piketty, cautious estimates indicate that globally some 10 percent of GDP is held as undeclared in
tax havens. One point worth considering is the contribution that such unreported financial assets have
made to Singapore's economic development. Extraction of Indonesia and also Malaysia's natural
resources since the 1970s has reportedly resulted in the transfer of significant financial assets to
Singapore, although the magnitude of this remains obviously unknown. Walking the streets of Singapore
it is obvious how many of its residents are of Indonesian descent. With financial transfers becoming
increasingly transparent and controlled these investment sources may eventually dry up. It may not
make much of a difference to Singapore now that it is a well-established and functioning economy, but
the island state probably owns some gratitude to its two large neighbors for fueling its early
development.

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Connect The DotsMar 26th, 23:31

In 1960 Singapore was a pirates refuge, a whore-house for sailors, a gambling casino, a drug den, and an
economic backwater port city that was under attack by Malaysian Terrorists.
Singapore was a perfect storm combining the Terror of Afghanistan, the poverty of Subsaharan Africa,
the racial turmoil of the American South, and the political instability of Palestine into an area smaller
than Israel, with fierce malignant neighbors and starved of any water, energy, or agricultural resources.

It was far bellow Africa in every social parameter.

Ignorance and poor education that exceeded Africa.

And it had no water, no resources, crappy education and no future.

In the 60’s Subsaharan Africa was the promised land of the future compared to the Singapore Cesspool.

And the British Empire abandoned it to allow it national independence at bleakest time in century.

‘Goodluck and thanks for the fish’.

===

PM Kew gained absolute powers at time of Terror Attacks and Emergency, similar to bombing and civil
strife in Syria today.

And he set about reforming Singapore from top to bottom.

Students had absolute high standards: learn three languages fluently, calculus, and science.

Absolute zero tolerance for illegal drugs.

Zero tolerance for terror.

Redesigning the city with modern planning, industrial zoning, critical infrastructure and the latest in
conservation and desalination..

High density living centered on efficient mass transit.

Family centered policies.

Severely limiting maladaptive behaviors and access to addictive drugs.

Regulating hygiene practice like spitting, gum chewing, and hand washing.

===
Today Singapore has a higher per capita wealth than Switzerland.

In education they exceed all European nations in maths, science and even English proficiency.

And Singapore does more banking business than Switzerland.

And more international container trade than The Nederlands.

And more software programming than all the Scandinavian nations combined.

Singapore is perhaps the first Third World Nation to completely transition to a First World Nation in the
Post War Era.

And not only qualifies, but now in the world leads or is in the top three of all critical national metrics.

It is as if Somalia became Switzerland in one generation.

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MinorityReportin reply to Connect The DotsJun 24th, 17:13

exceed all European nations in English proficiency?

Put down that bong, grandpa

Forget Ireland or the UK, I'd say the average Swede or Dane or Icelandic has a far superior command of
the English language than the average Singaporean

As for 'far below Africa in every social parameter'....you need to be on meth to think that. Singapore was
the 3rd wealthiest country in Asia at the time that the British left.

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guest-onlwoolin reply to MinorityReportJul 31st, 15:17

3rd Wealthiest country only because of the cash the British pumps into their military bases at that time.

That money went when they left and Singapore had to pay for our own defence not to mention the 2.5
yrs of conscription for each male Singaporean at age.

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