East Asian Success Models: Asian Tiger Singapore

Singapore had human settlements from the second century though not many details about it are known for that period. It was identified as an important trading port by Greek cartographer Claudius Ptolemaeus in the second century and the Chinese make a mention of the main island in the third century.

The Mongol empire in 1320 had sent emissaries to ‘Long Ya Men’ or ‘Dragon’s Tooth Strait’ which was one of the islands of Singapore.

According to the Malay Annals, Sang Nila Utama, a fleeing prince of Srivijaya – a Buddhist-Hindu empire based in Sumatra, modern-day Indonesia – is said to have renamed the island Singapura (Sanskrit for ‘Lion City’) and founded the Kingdom of Singapura in 1299 which lasted till 1398. From the 14th to 16th centuries, Singapore faced attacks and passed hands between the Java-based Hindu Majapahit empire and the Ayuttha kingdom of Siam (Thailand). It became an important trading port of the Sultanate of Johor in the 16th century. In 1613, Portuguese pirates burnt it down and in the next two centuries it ‘vanished from international notice.’

In 1819, the British founded it as the trading post of Southeast Asia and it was claimed as the official Crown Colony of Britain in 1867. Britain retained control of it until 1942 when Japan’s Imperial Army invaded it for its south expansion drive in WWII. Japan occupied it until 1945. For Britain, its former Crown Colony was too tiny to be made an independent state, but increasing measures of autonomy were still conceded between 1945 and 1962.

Singapore joined the Malaysian Federation via a public referendum in 1962 but riots between the ethnic Chinese and Malay citizens caused it to break away from the federation in 1965. Modern day Singapore was thus created in 1965. Its first Prime Minister (PM) was Lee Kuan Yew, who stepped down from the post in 1990 but remained in the cabinet of his successors till 2011. Its PM since 2004 is Lee Hsien Loong, the eldest son of Lee Kuan Yew.

Demography, Ethnicity, Religion, and Language

Singapore has a very high proportion of non-citizen residents at 37% who are categorized as guest workers or permanent residents. The remaining 63% are citizens.

It has an ethnic mix with 74% Chinese, 13.4% Malay, and 9.2% Bharatiya residents. With a population of around 5.7 million residents in an area of 704 square kilometres, Singapore has a high population density of over 7000 people per square kilometre.

The largest religion is Buddhism at 43% of the population. Most are Mahayana Buddhists originally from China. There are also Theravada and Vajrayana Buddhists in the country. Other faiths include 15% Muslims, 8.5% Taoists, 5% Catholics, 10% other Christian denominations, and 4% Hindus. The rest have no religious preference.

English is the most commonly used language but the country has four official languages: Chinese, Malay, English, and Tamil. Chinese is the mother tongue of 50% of the population. Around 32% consider English as their first language, 12% Malay, and 3% Tamil.

The Journey to Progress

Singapore’s status as a port city along with a favourable location is one major factor that propelled its rapid growth after its independence in 1965. It also has a relatively mild climate with temperatures ranging from 23°C to 32°C.

A conglomerate of 63 islands, it has a favourable location at the southern tip of the Malaysian peninsula and north of Indonesia. It is connected to the mainland by the Johor-Singapore Causeway and the Tuas second link. Its largest island is the Singapore Island.

Known for its dynamic economy, ease of doing business, foolproof law and order and discipline along with providing an excellent quality of life, Singapore is one of the busiest ports. For a country with such a small size, managing to become one of the wealthiest nations of the world is no small feat.

One factor perhaps is its no-nonsense governance structure. Singapore is a democratic republic with a unicameral Parliament whose members are elected by popular vote. The PM heads the majority party in the Parliament as well as the executive branch of the government and is vested with absolute power. The President plays a ceremonial role. Judges are appointed by the President on the advice of the PM. This grants the country a simplified judicial system that has a High Court, a court of appeals and different types of commercial courts.

Although it has a multi-party system, only one party has dominated since Independence, the People’s Action Party (PAP) which has been re-elected continuously. Singapore’s legendary leader Lee Kuan Yew is credited with creating a system of meritocratic, highly effective and anti-corrupt government and civil service. He eschewed populist policies in favour of long-term social and economic planning.

After it gained independence, the country was riddled with poverty, lack of infrastructure, poor sanitation, slums, and unemployment. It also had no natural resources. There appeared to be no way out of the situation other than industrialization which would require funds which the country lacked. Lee Kuan Yew sought aid but even this was not forthcoming.

Sandwiched between hostile neighbours Malaysia and Indonesia, trade with neighbours was not an option. Following the globalization path taken by Israel which had to bypass its Arab neighbours and directly deal with the developed nations, Lee set out to convince multinationals from the developed world to manufacture in Singapore.

For doing this, Singapore would have to create a unique selling proposition (USP) that would entice foreign companies to locate in Singapore. Lee accomplished this through creation of a business friendly environment—one which was safe, free of corruption, and had low taxes.

The corrupt and drug peddlers were unflinchingly given the death penalty. Recalcitrant labour unions were repressed by the PAP and those remaining were consolidated as the National Trade Union Congress (NTUC) which PAP controlled. Those threatening national, political, and corporate unity were swiftly punished without convoluted due process and often by overruling civil liberties partisans. For such tough, uncompromising actions in pursuit of national goals, Lee Kuan Yew is referred to as a ‘benevolent dictator’ by some in the West.

Discipline and rule of law made Singapore a stable location vis-a-vis its neighbours that were politically unpredictable. Its location and established port system were additional factors making it a preferred choice.

This effort yielded fruits with the US and Japan investing in manufacturing firms in Singapore and by 1972, about 25% of the country’s manufacturing firms were either foreign owned or joint-venture. Between 1965 and 1972, Singapore saw rapid and close to double digit growth in its GDP. GDP growth in the city-state has been amongst the world’s highest, at an average of 7.7% since its independence and topping 9.2% in the first 25 years.

The government’s next focus was human resources development. Technical schools were set up along with roping in international corporations to train the country’s unskilled workers in IT, electronics and petrochemicals. Full employment was the goal. Citizens without industrial jobs were recruited in tourism and transportation. Investment in human resources helped the country ‘graduate’ from textiles and garments which it exported  in the 1970s to pharmaceuticals, integrated circuits, aerospace engineering, biotech research, oil refining, and other advanced industries, in the 1990s.

Singapore has currently about 3000 MNCs that contribute to over 65% of its manufacturing output and export sales. With its entrepot trade, Singapore has become the world’s busiest trans-shipment port surpassing Rotterdam and Hong Kong. The total cargo tonnage handled is only second to that of the Port of Shanghai.

With excellent infrastructure in the form of roads, power supply, transport, and sanitation, the country also developed tourist attractions like a zoo, a natural reserve, casinos, and a night safari. Its tourism industry thrives along with medical and culinary tourism.

It has lately focused on growing its service and tertiary sector. Banking and Insurance are being developed in a big way.  It launched Asia’s Infrastructure Exchange in 2017, ‘a place where infrastructure demand and supply can connect’ and one that would integrate the value chain for infrastructure including financiers, banks, lawyers, engineers, and other professional services.

It has accomplished the feat of becoming the 15th largest trading partner of the US which is remarkable given its small size. It also trades with many countries of Europe, Asia, and South America.

From a per capita GDP of just $320 when it started out in the 1960s, to a per capita GDP of over $ 60,000, Singapore has had one of the fastest growth trajectories seen in modern times. ‘

Quality of Life

As Ping Zhou has stated in his paper, ‘Singapore’s model of sacrificing freedom for business is highly controversial and heavily debated. Regardless of philosophy, though, its effectiveness is undeniable.’ This model has enabled it to produce a GDP that exceeds $300 billion annually.

The model has also enabled a life expectancy of 83.75 years, the third highest in the world!  ‘Singapore is considered to be one of the best places to live on Earth if you don’t mind the strict rules.’

One study reports:

In the most recent World Bank Human Capital Index, Singapore ranks the best country in the world in human capital development. This means that a child born today in Singapore will be 88% as productive when she grows up, as if she enjoyed complete education and full health. Together with strong financial support from the government, the country continues to strengthen the nimbleness and flexibility of its workforce by providing continuing education such as the Skillsfuture initiative. Government spending on continuing education will nearly double, to more than S$1 billion yearly.’

This makes the Singapore model a thought-provoking one. If strict laws and curtailing of certain much-touted freedoms endow citizens with exceptional quality of life, isn’t that a a better deal than most? Not many stories of human-rights abuses in Singapore have been spoken of either which goes in the favour of such an arrangement.

References

Szczepanski, Kallie. “Singapore Facts and History.” ThoughtCo, Aug. 27, 2020: [Available at: https://www.thoughtco.com/singapore-facts-and-history-195083].

Zhou, Ping. “The History of Singapore’s Economic Development.” ThoughtCo, Feb. 12, 2021: [Available at: https://www.thoughtco.com/singapores-economic-development-1434565].

https://www.researchgate.net/publication/343254328_The_Economic_Development_of_Singapore_A_Historical_Perspective

Featured Image Source: Bloomberg.com


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Anuradha
Writer, Editor, Researcher