How Did Singapore Become So Rich? Singapore’s Economic Secrets

Singapore: GDP Per Capita
Singapore: GDP Per Capita

How Did Singapore Become So Rich?: This is the chart of Singapore’s GDP Per Capita since independence growing over 125 times to become a high-income nation rarely in the history of humanity has a nation traveled a path from poverty to riches so quickly or completely but How did Singapore do it? What are the secrets to Singapore’s success

To understand the economy of Singapore we must briefly look at its history. Singapore got its start in life as a venture of the British east India company in the early 18th century due to its strategic location between India, china, and southeast Asia. By the late 1800s, it had been fully incorporated as a crown colony of the British empire becoming an important naval base in the far east. The stability and infrastructure provided made the island an attractive option for migrants with the island population growing rapidly however fast forwarding to 1965 and Singapore’s position wasn’t great worst it was considered more wealthy than other parts of the Region this was relative.

Poverty was a huge problem high unemployment and political economic and racial tensions were such an issue that Malaysia decided to part ways with Singapore leaving the newly independent nation in well a bit of trouble luckily for Singapore it had just the man for the job Li Kun yu he was a lawyer by trade and he understood the fundamental importance of the law stability and keeping friendly relations with large international corporations which leads us nicely onto the next section what helped Singapore become a success in the early year without a doubt a lot of Singapore’s early success was due to effective government policy and what’s a business-friendly environment was the important one of Singapore’s most crucial early strategies focused on housing.

Also read: How to Get A Good Divorce Lawyer in Singapore

History of Public housing in Singapore

Public housing in Singapore
Public housing in Singapore

You see independent housing on the island wasn’t great. The city was surrounded by slums lacking even the most basic sanitation and services, so with that in mind one of the first thing, the government did pass the Land Acquisition Act. This controversial law enable the government to buy up cheaply but importantly this was largely used to move people into better housing make no mistake this was big deal with around 80% of the population living in publicly build housing today.

How Did Singapore Become So Rich?

Singaporeans are lucky enough to be able to buy these homes at a discount giving them a vital stake in the nation’s prosperity, personal wealth, and Stability. Interestingly, public housing in Singapore also has racial quotes. As social stability is a huge concern for the government especially given its multi-cultural nature but even with support Singapore’s housing is extremely expensive to help citizens overcome this the government allows them to use money from the central provident fund a saving fund that all working nationals have to pay into being fundamental to the wealth of its citizens with each citizen having their own personal savings account.

How Did Singapore Become So Rich?

The fund is also mandatory meaning citizens have to save whether they like it or not and the contributions are,t small either. saving rates start at 20% of your monthly wage. being topped up by employers these savings can then be used for things like your Pension, Housing, medical expenses, and even university education for yourself or a family the return on these savings is very attractive too achieving about 5% an incredible rate for a government saving account. especially when you consider that its official central bank rate is a fraction of that going a long way to explaining why the nation has one of the highest saving rates in the world that over 53%. now as just highlighted a common theme for Singapore is that a lot of its success is dependent on effective government policy.

Why is Good Governance Espically Important to Singapore?

Good Governance
Good Governance

How Did Singapore Become So Rich?

What’s good governance is Important to any economy it matters just that little bit more to Singapore especially drawing its rise to fame unlike so many of its labor Singapore lakes any meaning full natural resources and if you were to compare it to any of the other four first Asian tiger economies the nation has the smallest population by far to attract vital foreign direct investment Singapore made a huge effort to fight corruption and make it easy as possible to do business factors which are just relevant today as a nation ranks second for the ease of doing business.

you see Singapore’s development was built on the back of attracting multi-national corporations to invest in its manufacturing base initially low-skilled manufacturing but quickly transitioning to higher skilled sectors like semi-conductor or aerospace and contrary to popular belief Singapore isn’t just some huge private bank today manufacturing is still the largest sector of the economy at over 20% with semi-conductors it’s largest exports this reliance on manufacturing may seem strange for a highly advanced economy well known for its finance through a fundamental reason for this again lies with good governance this time through Singapore’s national wage council.

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