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Sana Ijaz

Ma’am Rubina Shaheen

Composition and Grammar

June 17, 2023

How did Singapore become an economic success?

You would have definitely heard about the political stability, development and

educational excellence of Singapore. However, have you ever wondered what the keys to its

success are? We are aware that Singapore was ruled by the Japanese and then the British

before gaining its independence. After wards, it was merged with Malaya to form Malaysia

but some internal disputes resulted in its separation (Why Singapore became an Economic

Success). Who would have thought that a country which started her independent journey

with a series of major problems, such as over-population, unemployment, housing shortage

and racial tension, would be rocketing towards success within a couple of years and travel

through poverty to riches in such a short time after its independence. Its GDP grew 125 times

to make it a high income country.

According to the World Bank, Singapore has an annual GDP of $423.632 billion; in

comparison, Pakistan has a GDP of $348.26 billion. The noticeable thing is that Singapore

covers only 728.6 km2, whereas Pakistan covers an area of 796,096 km2 (World Bank).

A country’s economy plays an integral role in determining the success and prosperity

of its people. Singapore’s economic success is driven by its highly developed and diversified

economy. In today’s competitive world, it has become extremely difficult for a country to

keep up with the international standards. Singapore has become an economic success due to

a combination of factors which include its strategic location, strong education system and

foreign trade but it was because of the leadership of Lee Kuna Yew that Singapore

transformed from “gloomy third world port” (Mishra) to an economic success. He understood
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the fundamental importance of “law, stability and keeping friendly relations with large

international corporations” (Mishra).

Singapore’s success in the initial years was determined by its effective government

policies. Firstly, along with keeping a business friendly environment, they focused on the

housing. In its early stages, housing was a major problem. To overcome it, the government

passed the land acquisition act which enabled the government to acquire the private land but

that was particularly used to move people in better housing and today 80% of the people live

in publically built housing. Public housing there has racial quotas to cater the needs of the

multicultural nation. Secondly, for the financial stability of the people they made a Central

Provident Fund, which acts as a pillar of social security. It is a savings fund that all working

nationals have to pay and the contribution starts at 20% of their monthly income. It is later

used for matters like pension, housing, medical facilities and education of its citizens. This is

the reason why the country has highest saving rates which has a major contribution to its

strong economy.

Good Governance has a huge impact on a country’s economic success but for

Singapore, it matters more than usual as the country does not have any major natural

resources. So to cope up with this problem, the country has to adapt various ways to attract

vital foreign direct investment which is achieved by making the country corruption free and

making it relatively easy to do business with the country. Singapore upgraded its low skilled

manufacturing companies to high skilled companies such as semiconductor devices and

aerospace base by attracting some major multinational countries to invest in them and made

manufacturing the largest sector of the economy, contributing 20% to the economy (Low).
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Singapore’s location has a huge impact on its economic success. As it serves as the

gateway for international corporations who want to operate in the region. It lies on the Strait

of Malacca, one of the busiest shipping lanes in the world. To strengthen its economy, the

country has invested heavily in its port infrastructure, container terminals and other facilities

and made its port the second largest port by volume and stands first in the world for

transshipment. Along with being the transportation hub, Singapore also has well-develop

aviation industry which also serves as a connecting hub for flights.

As Singapore does not have any meaningful natural resources, its people are its main

asset. The foreign investments are utilized to set up technical schools and to enhance its

workforce in its areas of specialization such as electronics and petrochemicals. Education

plays a key role in Singapore’s success as the country frequently ranks top for international

standardized testing and has highest Human Capital Index in the world. (CB Goh)

Overall, Singapore faced its own set of difficulties, just like any other nation, but the

difference was in how those difficulties were approached strategically. With its core pillar

being effective governance through business and housing policies, anti-corruption laws, and

investments in a nation's most valuable resource—its people—Singapore has achieved

undeniable success in all fields. By implementing various policies that benefited the

government while keeping in mind the security and convenience of the populace, Singapore

has become an economic success and set an example for the rest of the world, despite its

small size, sparse population, and dearth of natural resources.

Works Cited

1. CB Goh, S Gopinathan. "Education in Singapore: development since 1965." 2008.

2. Low, Linda. "Singapore Inc: A success story." South African Journal of International Affairs

2013.

3. Mishra, Dr. Rahul. "Lee Kuan Yew: Asia's Singaputra." 27 March 2015.

4. "Why Singapore became an Economic Success." (2015). Web.

5. World Bank. "Singapore, GDP. Pakistan GDP." 2021. Web.