56_G15_InFocus_Singapore

Global Issue 15

In Focus Singapore Trading up: South-East Asia’s economic miracle When impoverished, disease-ridden Singapore became independent in 1965, the nation’s leader – Lee Kuan Yew – had to build up an economy almost from scratch. Now it is considered the best place in the world to do business Anver Versi Singapore continues to sit on top of the global economic pile. This tiny state, with a population of just over fi ve million, has once again been acknowledged by the World Bank as the best place in the world in which to do business. This is the seventh consecutive year that Singapore has won this highly coveted accolade. With a per capita income of around US$61,000, it is also the world’s richest non-resource based country. It is also among the world’s top three oil export refi ning centres, the world’s busiest trans-shipment port, the world’s biggest manufacturer of jack-up rigs, the only Asian country to have AAA credit ratings from all three major credit rating agencies – Standard & Poor’s, Moody’s and Fitch – and among the world’s handful of highly sophisticated fi nancial centres. According to the Index of Economic Freedom, it is also the second freest economy in the world and considered the world’s most effi cient and least corrupt nation. Beyond economics, Singapore has the least rush-hour traffi c density of any capital city. It is reputed to have the best designed and integrated public housing on earth and the swathes of trees, fl owers, shrubs and parks that cover the urban infrastructure have given it the well deserved reputation of a ‘garden city’. Michelin-starred restaurants are cheek by jowl with cheaper, but excellent, local eateries offering an astonishing array of global cuisine to a cosmopolitan clientele and world class theatres, casinos and sporting events – including a Formula 1 Grand Prix – provide well-rounded entertainment. All these factors taken together have made Singapore one of the world’s most desirable places in which to invest and live. This is of crucial importance, as foreign investment is the bedrock on which Singapore has built its extraordinary success. More than 80 per cent of net investment commitments in manufacturing come from foreign investors and around 8,000 multinational corporations are headquartered in Singapore. The island’s success is even more remarkable when you consider the dire circumstances the newly independent state found itself in in 1965 – when it was expelled from a short-lived merger with Malaysia – what it has achieved borders on the miraculous. It is unprecedented and is unlikely to be repeated anywhere else, despite the large body of academic work devoted to trying to decipher the ‘Singapore model’. Singaporeans will remind you, and it seems themselves, that in 1959 when it attained self rule under Lee Kuan Yew, it was a poverty-stricken, disease-riddled little entrepôt with a polyglot population of around a million Chinese, Malays and Indians sharing atrocious living conditions and constantly bickering with each other. Singapore earned its living by processing rubber, copra and other produce from the surrounding hinterland. But its main source of income was as a British naval base and trans-shipment port. After independence in 1963, and with fraught relations with its neighbours, the fate of its independent economic existence seemed sealed, especially as Britain stuck to its determination to withdraw from all its possessions east of Suez. How could Singapore survive when it was no longer the centre of the wider area that the British once governed? pondered Lee Kuan Yew. “We had to create a new kind of economy, try new methods and schemes never tried before anywhere else in the world, because there was no other country like Singapore,” he writes in From Third World to First. The best of all the bad options available was to industrialise. But the question remained as to how to entice investors and industrialists to set up shop in Singapore when there were so many other more attractive options around. “We cast around for solutions and were willing to try any practical idea that could create jobs and enable us to pay our way,” Lee Kuan Yew recalls. Analyst Tilak Abeysinghe says that what happened next was “a wonder created out of a tear drop”. The tears that the nation saw in the eyes of the then young leader Lee Kuan Yew solidifi ed the determination of the nation to rise against all odds. The rest is history – Singapore turned its vulnerability to strength. Lee Kuan Yew’s highly dedicated team, led by Goh Keng Swee, considered the architect of the country’s economy, hit on what turned out to be twin strokes of genius. The fi rst was to leapfrog the region and link up di- 56 l www.global -br ief ing.org thi rd quar ter 2013 global


Global Issue 15
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