This tiny island nation is smaller than New York City, but it’s the wealthiest country in Asia and one of the richest in the world.
Its GDP per capita itself has surpassed the likes of the UK, the US, France and other developed countries.
Over six decades, Singapore has transformed itself from a colonial trading port to a buzzing financial center that’s envied the world over. And it’s held up as an example for any country seeking to grow a robust, high-tech economy.
Its wealth is the product of decades of planning by a party that’s been in power since independence. So, what’s Singapore’s formula for success? And as its leadership changes for the first time in 20 years, can it continue to prosper?
Lee Kuan Yew’s strategy
When Singapore became independent in 1965, the first prime minister, Lee Kuan Yew, and other founding leaders recognized it had an economic problem: It had no natural resources.
So, if they wanted to develop an export-led economy and attract foreign capital, they would need to build up the country’s manufacturing industry.
Its location gave it an edge. It has access to the Strait of Malacca, to the Indian Ocean, to the South China Sea, which makes it a pivotal shipping hub. So, it did this initially by transforming Singapore into a manufacturing base with a focus on labor-intensive industry at first to wipe out the high unemployment.
But Lee only ever intended manufacturing as a stepping stone to a more developed economy. He laid the fundamentals, which is a solid financial and legal system, stable and largely clean government, making sure that the public transport system is efficient, has world-class health care infrastructure.
Finance transformation
In the 1980s, Lee started laying the groundwork for what is now Singapore’s biggest source of wealth, finance.
Following the lead of places like the US and UK, he liberalized the financial services industry with lighter touch regulation.
The legacy of that approach is evident today. 4200 multinational companies have regional headquarters here.
Low taxes are a big reason for that. Singapore’s corporate tax rate is just 17% and can hit 13.5% or lower for some activities.
That’s also because Lee’s successor, Goh Chok Tong, continued to lean into attracting big business.
Singapore shifted emphasis to a knowledge-based economy that relies more on creativity and growing Singapore’s entrepreneurs.
In 2004, Lee Hsien Loong, Lee Kuan Yew’s eldest son, took over the premiership. And he realized to retain the flow of businesses and wealth, it needed to be an even more attractive place to live in.
Leisure and Entertainment
With its prime location, Singapore had to become a destination in itself. That’s been key to Singapore success.
It had embarked on an ambitious land reclamation project in the 1970s. Over the years, that space was filled with not just offices and apartment buildings, but entertainment hubs, changing the city skyline in the process.
One example was bringing in the F1 night race.
The government also welcomed casinos or integrated resorts, as they’re called in Singapore.
And the timing was impeccable because the Chinese and Indian economies were booming. Singapore was ideally situated to attract the region’s ultra-wealthy, who could then enjoy the casinos and nightlife, but also park their money.
The results – the total value of assets under management in Singapore jumped from $420 billion at the start of Lee Hsien Loong’s tenure to $3.6 trillion in 2022.
While Singapore has been an economic success, Singapore’s challenges its leadership is criticized by some for the restrictions on civil liberties and the media.
Lee Kwuan Yew: “Freedom of the press, freedom of the news media must be subordinated to the overriding needs of the integrity of Singapore.”
Under Lee Kuan Yew’s governance, one of the chief criticisms is that there was this climate of fear in Singapore. People were afraid to criticize the government.
Subsequent governments also faced criticism for maintaining a tight grip. Protests are still largely illegal.
The government is definitely cognizant that its population is changing. It is much more diverse. It is much more vocal.
At the same time, Singapore needs to stay competitive as other countries learn from its model of growth. And climate change is becoming a threat to national security. This is the Singapore that Lawrence Wong Leadership transition is inheriting as the country’s new prime minister.
Wong, who grew up in public housing, earned praise for his leadership in the country’s COVID-19 response. He is seen as having more of a common man’s touch.
Lawrence Wrong: “We should build on what we have today. We should affirm and reinforce what works well for Singapore.
While the People’s Action Party still forms the ruling government, its popularity is declining.
There will be that politicking that will happen much more intensely in the years to come than there was ever before.
The build-up of wealth has brought problems of its own. Housing prices have increased. The cost of living has gone up.
Part of Singapore’s growth model has been to attract foreign labor. But too much foreign worker inflow raises concerns by the citizens that the foreigners are taking too many of the good jobs.
If you just look at the numbers, inequality has been reduced, but that’s not how some residents feel.
The country’s rapidly aging population is also going to add pressure to workforce growth and government spending.
So, whether it’s managing discontent or guiding Singapore’s continued evolution into a tech hub, Wong’s job is to sustain the city-state’s hard-earned success.
Source: Bloomberg Originals
WORD BANK:
GDP per capita /dʒiː.diːˌpiː pɝː ˈkæp.ɪ.t̬ə/ (n): GDP bình quân đầu người
surpass /sɚˈpæs/ [C2] (v): vượt qua
colonial /kəˈloʊ.ni.əl/ (adj): thuộc địa
buzzing /bʌ.zɪŋ/ / (adj): sôi động
envy /ˈen.vi/ (v): khiến ai đó phải ghen tị
robust /roʊˈbʌst/ (adj): mạnh mẽ
formula /ˈfɔːr.mjə.lə/ (n): công thức
prosper /ˈprɑː.spɚ/ (v): thịnh vượng
export-led economy (n): nền kinh tế dựa vào xuất khẩu
edge /edʒ/ [C2] (n): lợi thế
pivotal /ˈpɪv.ə.t̬əl/ (adj): quan trọng
hub /hʌb/ (n): trung tâm
initially /ɪˈnɪʃ.əl.i/ [B2] (adv): ban đầu
labor-intensive /ˌleɪ.bɚ.ɪnˈten.sɪv/ (adj): sử dụng nhiều lao động
wipe out sth /waɪp/ [C2] (v): xóa bỏ cái gì
a stepping stone /ˈstep.ɪŋ ˌstoʊn/ (n): bước đệm
fundamental /ˌfʌn.dəˈmen.t̬əl/ (n): nguyên tắc cơ bản
world-class /ˌwɝːldˈklæs/ (adj): đẳng cấp thế giới
liberalize /ˈlɪb.ər.əl.aɪz/ (v): tự do hóa
legacy /ˈleɡ.ə.si/ [C2] (n): di sản
evident /ˈev.ə.dənt/ [B2] (adj): rõ ràng
headquarter /ˈhedˌkwɔːr.t̬ɚ/ (n): trụ sở
corporate /ˈkɔːr.pɚ.ət/ [C1] (adj): thuộc về doanh nghiệp
successor /səkˈses.ɚ/ [C1] (n): người kế nhiệm
shift emphasis to sth (v): chuyển trọng tâm sang cái gì
take over [B2] (v): tiếp quản
premiership /prɪˈmɪr.ʃɪp/ (n): quyền thủ tướng
prime /praɪm/ [C2] (adj): đắc địa
embark on sth /ɪmˈbɑːrk/ (v – formal): bắt tay vào làm cái gì quan trọng
land reclamation /lænd ˌrek.ləˈmeɪ.ʃən/ (n): lấn biển
integrate /ˈɪn.t̬ə.ɡreɪt/ (v): tích hợp
timing /ˈtaɪ.mɪŋ/ (v): tính toán thời điểm
impeccable /ɪmˈpek.ə.bəl/ (adj): hoàn hảo
ultra-wealthy /ˈʌl.trə.ˈwel.θi/ (adj): siêu giàu
criticize /ˈkrɪt̬.ɪ.saɪz/ [B2] (v): chỉ trích
restriction /rɪˈstrɪk.ʃən/ [C2] (n): hạn chế
civil /ˈsɪv.əl/ (adj): thuộc về dân sự
liberty /ˈlɪb.ɚ.t̬i/ [B2] (n): tự do
press /pres/ [B2] (n): báo chí
subordinate sth to sth /səˈbɔːr.dən.eɪt/ (v): đặt cái gì dưới cái gì (coi cái gì ít quan trọng hơn cái gì)
overriding /ˌoʊ.vɚˈraɪ.dɪŋ/ / (adj): quan trọng nhất
integrity /ɪnˈteɡ.rə.t̬i/ (n): sự toàn vẹn
grip /ɡrɪp/ (n): sự kiểm soát
protest /ˈproʊ.test/ (n): biểu tình
cognizant /ˈkɑːɡ.nɪ.zənt/ (adj): nhận thức
vocal /ˈvoʊ.kəl/ (adj): sẵn sàng lên tiếng
transition /trænˈzɪʃ.ən/ [C2] (n): chuyển đổi
inherit /ɪnˈher.ɪt/ [C2] (v): kế thừa
earn praise (v): nhận được lời khen ngợi
ruling /ˈruː.lɪŋ/ (adj): cầm quyền
inflow /ˈɪn.floʊ/ (n): dòng chảy đổ vào đâu đó
discontent /ˌdɪs.kənˈtent/ [C1] (n): sự bất mãn
sustain sth /səˈsteɪn/ [C2] (v): duy trì cái gì
hard-earned /ˌhɑːrdˈɝːnd/ (adj): khó khăn mới có được
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