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How Singapore impresses

Jun 13,2023 - Last updated at Jun 13,2023

SINGAPORE — For economists, anthropologists, sociologists and political scientists, Singapore represents a veritable laboratory of conundrums waiting to be analysed.

In the pre-colonial era, this island of marsh and swamps served as a trading settlement, thanks to its relative proximity to the Malacca Strait. Traders from India and China passed through, with some deciding to stay and put down roots. Later, traders from the Netherlands and Portugal arrived. And then, the British came and brought labourers from India, Sri Lanka, and East Asia.

The mystique of Singapore extends even to its name. When the Buddhist prince Sang Nila Utama arrived in the late thirteenth century and founded a kingdom, he claimed to have seen a lion, he also claimed to be a descendant of Alexander the Great, and he named his domain Singapura, which in Sanskrit means “lion city”. Given that lions are not native to the region, the origin of the lion that Utama claimed to have seen remained a mystery until scholars realised that what he had seen was probably a civet, also known as musang, a distant cousin of the fox.

Singapore as we know it today was born on August 9, 1965, when the Malaysian parliament voted to expel the troublesome island, and an independent city-state was established. With a per capita income of barely $500, it was abysmally poor, similar to other newly independent, underdeveloped countries across Asia and Africa. Twenty years later, however, this tiny island with no natural resources was already one of the richest countries in Asia. Today, its GDP per capita, at just under $85,000, is higher than that of the United States.

What drove Singapore’s economic miracle? Some right-wing groups claim its success proves that authoritarianism works. But correlation, as we know, does not imply causation. The British econometrician David Hendry once observed that, according to this logic, one could argue that inflation in the United Kingdom was “caused” by an outbreak of E. coli in Scotland.

In reality, Singapore’s rapid growth has more to do with its high savings and investment rates, first-rate education system, and intelligent policymaking. The intelligent policymaking can come from an authoritarian leader, but there is no causal link there. In fact, more often than not, authoritarianism is a step toward cronyism and a banana republic.

What economists do not always recognise is that economic performance depends on many factors beyond economics, such as cultural norms, social cohesion, and the level of public trust. Unlike other countries that experienced authoritarianism, Singapore’s society has high trust and is not divided or polarised. In a speech in 2017, then-Deputy Prime Minister (and current Senior Minister) Tharman Shanmugaratnam argued that Singapore’s “identity is our brand of multiculturalism. It has made us a nation-state where citizens of all faiths and cultures accept each other as equals.”

On a recent short visit to the island, I managed, between talks and meetings with students and professors, to roam different parts of the city and witness its salad-bowl multiculturalism for myself. Walking down Haji Lane or Arab Street, with the beautiful Sultan Mosque glowing in the background, one could easily imagine being in Istanbul or Saudi Arabia. And Chinatown, with its constant hum of conversation, calls to mind the alleyways of Shanghai or Beijing.

Little India was particularly fascinating. I heard Tamil all around, but the prevailing accent was a little different from what one would hear in Tamil Nadu, India. There were women in sarees, with bindis marking their foreheads in a slightly different way from how it is done in India. But when talking to people on the street, shopkeepers, and taxi drivers, it became clear that even though each group has retained its cultural roots, they all consider themselves Singaporeans first and foremost.

Singapore’s authoritarian system of government may not be the reason for its success, but it is an essential part of the city-state’s character. A law-abiding society is one where pedestrians wait for the signal before crossing the street, even when there is no car in sight. While this is better than a society in which it is customary to disregard the law, a system in which people obey the spirit of the law rather than the fine print is more efficient. In New York or London, for example, people often cross the street without waiting for the signal to turn green, using their judgment to avoid obstructing traffic.

Singapore, on the other hand, is a fine-print-abiding society. I spent much of my time there at crosswalks, needlessly waiting to be given the right signal.


Kaushik Basu, a former chief economist of the World Bank and chief economic adviser to the Government of India, is professor of Economics at Cornell University and a non-resident senior fellow at the Brookings Institution. Copyright: Project Syndicate, 2023.

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