How Singapore Got So Crazy Rich

Summary

Singapore, a small island nation, has emerged as one of the wealthiest countries in the world, surpassing GDP per capita of developed nations like the UK and the US. Its success is attributed to strategic planning and policies implemented over six decades, starting with the first Prime Minister Lee Kuan Yew. Recognizing the lack of natural resources, Singapore focused on developing a manufacturing industry and leveraging its strategic location as a shipping hub. The country then transitioned to a knowledge-based economy and financial sector, attracting multinational companies with low corporate taxes and a stable government. Despite criticism over restrictions on civil liberties, Singapore continues to evolve, with new Prime Minister Lawrence Wong facing challenges such as an aging population, housing prices, and maintaining competitiveness in a changing global landscape.

Takeaways

• 🌟 Singapore is one of the wealthiest countries in the world, with a GDP per capita surpassing many developed nations like the UK and the US.
• 🏙️ The country transformed itself from a colonial trading port to a financial center over six decades, serving as a model for high-tech economic growth.
• 💼 Decades of strategic planning by the ruling party since independence have been crucial to Singapore's economic success.
• 🔄 Singapore's first Prime Minister, Lee Kuan Yew, focused on building a manufacturing industry due to the lack of natural resources.
• 🌐 Singapore's strategic location near the Strait of Malacca and access to major oceans made it a pivotal shipping hub, aiding its economic development.
• 📈 The groundwork for Singapore's financial sector was laid in the 1980s, with lighter touch regulation attracting multinational companies.
• 💼 Low corporate taxes (17%, with some activities as low as 13.5%) have been a significant factor in attracting businesses to Singapore.
• 🚀 Singapore shifted towards a knowledge-based economy under Goh Chok Tong, focusing on creativity and entrepreneurship.
• 🏙️ Under Lee Hsien Loong, efforts were made to make Singapore an attractive place to live, with ambitious land reclamation and the addition of entertainment hubs.
• 💰 The total value of assets under management in Singapore increased dramatically from $420 billion to 3.6 trillion by 2022.
• ⚖️ While economically successful, Singapore's leadership has faced criticism for restrictions on civil liberties and media freedom.
• 🌱 New Prime Minister Lawrence Wong inherits a diverse and vocal population, with challenges such as housing prices, cost of living, and an aging population to address.

Q & A

What is the significance of Singapore's size in comparison to New York City?

Despite being smaller than New York City, Singapore has become the wealthiest country in Asia and one of the richest in the world, demonstrating that economic prosperity is not necessarily tied to geographic size.

How has Singapore's GDP per capita compared to developed countries?

Singapore's GDP per capita has surpassed that of developed countries such as the UK, the US, and France, indicating its high economic performance and standard of living.

What was the economic challenge that Singapore faced at independence?

At independence in 1965, Singapore faced the challenge of having no natural resources, which meant that it had to focus on building up its manufacturing industry to develop an export-led economy and attract foreign capital.

What geographical advantage has contributed to Singapore's economic success?

Singapore's strategic location with access to the Strait of Malacca, the Indian Ocean, and the South China Sea has made it a pivotal shipping hub, contributing significantly to its economic success.

How did Lee Kuan Yew lay the groundwork for Singapore's economic development?

Lee Kuan Yew focused on establishing a solid financial and legal system, a stable and clean government, an efficient public transport system, and world-class health care infrastructure as the foundation for Singapore's economic development.

What was the role of the financial services industry in Singapore's wealth?

The financial services industry became Singapore's biggest source of wealth after Lee Kuan Yew liberalized it with lighter touch regulation, following the examples of the US and UK.

Why are low taxes a significant factor in attracting multinational companies to Singapore?

Singapore's corporate tax rate is low, at just 17%, and can be even lower for certain activities, making it an attractive destination for multinational companies to establish their regional headquarters.

How did Singapore shift its economic emphasis under Goh Chok Tong?

Under Goh Chok Tong, Singapore shifted its emphasis to a knowledge-based economy that relies more on creativity and the growth of local entrepreneurs, continuing to attract big businesses.

What steps did Lee Hsien Loong take to make Singapore an attractive place to live and do business?

Lee Hsien Loong focused on making Singapore a destination in itself by its prime location, undertaking ambitious land reclamation projects, and developing entertainment hubs that changed the city skyline.

How has Singapore's approach to civil liberties and the media been criticized?

Singapore's leadership has been criticized for restrictions on civil liberties and the media, with freedom of the press and news media being subordinated to the perceived needs of the country's integrity.

What are some of the challenges that the new prime minister, Lawrence Wong, is facing?

Lawrence Wong is facing challenges such as managing discontent among citizens due to rising housing prices and cost of living, addressing concerns about foreign workers taking jobs, and dealing with an aging population that puts pressure on workforce growth and government spending.

How has the People's Action Party's popularity been affected in recent years?

While the People's Action Party still forms the ruling government, its popularity has been declining, indicating that there will be more intense politicking in the coming years.