How Singapore became Asia’s No.1 Country? | Case Study | Dhruv Rathee
Hello, friends! Imagine a country with widespread poverty and unemployment. High crime rates. Drug-related problems, frequent riots, overpopulation and illiteracy as well. Can you imagine the dire condition of such a country? But you do not need to imagine for too long, because this was the reality of Singapore in 1965.
But a stark turnaround was seen over the next 25 years it left the world shell-shocked. Singapore became a highly developed, high-income country, and is considered to be among the Top 5 Richest Countries in the World today. One of the Cleanest countries in the world. With next to no corruption or other crimes. Perhaps the No. 1 Asian country in the truest sense.
But how was this possible? Who is the hero of our story? In this video, let's dive deep into the magical story of Singapore. "The hostility between Singapore's ethnic Chinese and Malays, finally erupted into violent clashes." "And as long as I'm in charge, nobody's going to knock it down." "From the lack of land in high density, but with some hefty government purchasing power, they did the impossible."
"The Republic of Singapore was born!" Singapore is a tiny country, friends. So small, that it gets difficult to spot it on a map, look at the map of Southeast Asia, you can clearly see Indonesia, the Philippines is easy to spot, even Malaysia can be easily identified, but when you travel south, you will see the small island of Singapore. The waterbody Strait of Johor separates Singapore and Malaysia. Singapore is half the size of Delhi, area-wise.
But on this small island, approximately 5.7 million people reside. The total area is 710 km². So the population density of Singapore is 8028 people per square kilometre. We consider India to be an overpopulated country, But for comparison, India's population density is 446 people per square kilometre. Singapore is 18 times more densely populated than India. Overall, it is the 3rd most densely populated country.
Lagging behind Monaco and Macao. Interestingly, the origin of the name Singapore, is from the Sanskrit word Singh Pura. Singh means lion, and Pur is city. So Singapore means "The Lion City". Oh, it reminds me, Singapore is one of the four Asian tigers.
The four highly developed countries in Asia. South Korea, Hong Kong, Taiwan, and Singapore. Interestingly, the population density of these four countries is higher than India's. This might seem like a shocking fact to some, because many people blame India's population for the lack of development.
But the GDP Per Capita and population density of the 2 tigers, is much higher than India's. Talking about the people living here, Singapore is a diverse country. People belonging to various religions live harmoniously.
There are people from the 5 major religions here. And there's a small population of people from Jewish, Zorastrian, Jain, and Sikh communities. The second largest group is the people who do not believe in religion, the Atheists.
But apart from religion, Singapore is very diverse in terms of ethnicity too. The largest majority is of Chinese ethnic people at 74.5%. Followed by Malays at 13.5%. And Indians at 9%. Among the Indians, the largest populations are Tamils, Bengalis, and Punjabis. And the remaining 3% are made up of Eurasians and Arabs.
While talking about the people, we should not forget about Orang Laut. They are the original inhabitants living in Singapore for a very long time. The tribals. Overall, 'Unity in Diversity' is Singapore's present-day reality. But it wasn't the case always.
Going back into history, in early history, for a long time, the island of Singapore was used as a trading island, by the Malay, Thai, Indian, Arab, Japanese and Chinese traders. Throughout the history, it was occupied by an Indonesian ruler, the Portuguese, the Dutch through their Dutch East India Company, and in 1819, an ambitious officer of the British East India Company, Thomas Raffles bought Singapore, from the Sultan of Johor. The British entered this island having bought it. Thomas Raffles turned Singapore into a Free Port. Any ship passing through would not have to pay any fees.
This gave rise to free trading in Singapore. In 1869, the Suez Canal became operational so that the ships did not need to go around Africa, this led to even more ships coming to Singapore. Most ships used Singapore as a refuelling station. In the nearby country, Malaysia, two industries were very popular. Tin production and Rubber production.
Since Singapore was close by, Singapore became a rubber-processing hub as well. This might sound like signs of development in Singapore. But there was a dark side to it as well. In reality, the Britishers were growing opium in Bengal. And they processed the opium in Singapore.
The Britishers had employed Chinese porters for this job, where they could find one of the lowest-grade opium. The Chinese people working in these factories, were far from their homes, with no source of entertainment, so they turned into opium addicts. Thousands of opium addicts were living in Singapore.
Crimes increased due to drug addiction. People turned to theft. In 1941 it was estimated that there were about 16,500 opium addicts in Singapore. And the 1940s was the period of World War II.
"German bombers attack British cities like Coventry, And London." 15th February 1942, the Japanese invaded into Singapore and Malaysia. Singapore surrenders to the Japanese. Over the next 350 years, the Japanese ruled over Singapore. And the Japanese Rule completely destroyed Singapore. chilling murders took place.
Not only on the field but in hospitals also. Several soldiers were tortured as Prisoners of War. Thousands of people were used as forced labour. Women were being used as a commodity. Thousands of women were brought in from Korea, China, Indonesia, Malaysia, to the 'Comfort Stations' in Singapore, where they were available to the Japanese soldiers.
By the time the Japanese lost the War in 1945, and withdrew from Singapore, there were more than 30,000 opium addicts widespread gambling and prostitution in the country, buildings were heavily destroyed. There was large-scale poverty, high unemployment, and the place was crawling with diseases. There were food shortages, and people were starving to death.
There was no end to crime and violence, And Singapore had turned into a slum colony. After the end of World War II, The British reclaim Singapore's control, and a British Military Administration, tried to get things under some control. The basic services of gas, water, and electricity, were restored. Canteens started to deal with the food crisis. The opinions of the Singaporeans about the British, was quite favourable and positive as compared to countries like India.
One of the biggest reasons for this was the British defeated the Japanese, and the Japanese were more atrocious towards Singaporeans. The second biggest reason was that the government changed in the UK in July 1945. Conservative Party was no longer in power. And the Labour Party came into power. They were against imperialism to some extent. So the British Rule over Singapore slowly receded.
And turned into Self Governance. I won't go into what happened in much detail, because this would make this video even longer. But in 1948, the first elections were held. The elections were held for only some seats.
Singapore's Constitution was framed, it was revised twice in 1955 and 1958, And you can say that in 1959, the proper full-scale elections were conducted. These elections were won by the young leader Lee Kuan Yew. The Secretary General of People's Action Party. PAP Remember this, you will hear more about this in this video. He became the First Prime Minister of Singapore.
Initially Lee Kuan Yew believed that Singapore will not be able to survive as an independent country. And that they should become a part of Malaysia. He did this in 1963.
He merged Singapore with Malaysia. But now comes a shocking twist in your story. The Malaysian government was not thrilled to have Singapore be a part of their country. The biggest reason for this was the 1964 Malaysian elections PAP decided to contest that election. The Malaysian politicians did not like this, that a political party from Singapore was contesting in the National Elections in Malaysia.
On the other hand, the people living in Singapore were not happy with this merger. Because of the agreement that 40% of Singapore's revenue was to be paid to Malaysia's Central Government, even though Singapore's population was 17% of the combined population. Singaporeans felt that it was unfair. Additionally, as per Article 153 of the Malaysian Constitution, Malays were given special rights and privileges, The Chinese and other non-Malay ethnicities in Singapore did not like this discrimination. They saw how Malaysia was turning into Malay Malaysia.
That it belonged to only the Malay people. While minorities weren't given the same rights and equality. "They want a Malay Malaysia. Where the Malays are on top, In charge of everything.
We wanted, gradually, not immediately, a Malaysian Malaysia, where as citizens, we share the burdens and the rewards." Due to these differences, in 1964, communal tensions increased, and racial riots were also seen. "...things at each other. So I wedged my soldiers in between them, and we fired a few tear gases."
Due to these riots, in 1965 it was decided that Singapore will once again be separated from Malaysia. And be an independent country The Republic of Singapore. By this point in time, there was some remnant of British control over Singapore. In 1967 the British announced that they would withdraw their troops from Singapore, and would leave the country altogether.
This might sound like good news to you. But for Singapore's government and Singaporeans, this was problematic. The British contribution was significant in running Singapore as an independent nation. British forces provided a large number of jobs to the Singaporeans. On top of it, Singapore did not even have its own army.
No defence forces. If the British left, they would have been defenceless. This is why Lee Kuan Yew requested the British to postpone their departure.
To give them proper time to transition. And the British agreed. The deadline for the British to leave the country was set in 1971. Prime Minister Lee Kuan Yew had 4 years to get a hold of his country. A country struggling with poverty, unemployment and drug addiction. In addition to the riots and the separation of Malaysia and Singapore.
They did not have any natural resources. How could this country be taken to the path of development? Friends, this is the beginning of our miraculous story. A story with Prime Minister Lee Kuan Yew as the hero.
He got to work at once. First, to make peace with the neighbouring countries, and to solve geopolitical problems. In 1967, he founded the ASEAN group. In which foreign ministers from 5 countries, came together.
With the purpose of collaborating with other countries, to cooperate across multiple fields, and to create peace and stability in the region. But this didn't mean that the country did not need an Army. Second, for the defence of the nation, Lee Kuan Yew, introduced National Service in the same year. When the boys in the country attained 16.5 years of age, the needed to register for National Service.
And after attaining the age of 18, he may need to enlist at notice. Basically, it was made compulsory for every boy of 18 years of age, to join the Army, Defence Forces, or National Service. For a few years. If a country wants to be truly developed, education is among the very first things that needs to be focused on. Singapore did this. The country has compulsory Primary Education, high-quality public education, the government runs excellent schools and colleges.
the infrastructure of the schools is impressive. And public education is available at nominal fees. It is almost free. Friends, education is actually quite basic but the main difference between developing and developed countries. Practical skills are essential to become a developed nation. Singapore focused on vocational training as well.
But unfortunately, in our country, most people do not even have basic practical skills. We need to try our best, to learn these skills, to be constantly learning and being lifelong learners. Here, for lifelong learning and upskilling, I'd recommend Udemy. Udemy is a global destination to learn many skills, that are taught through online courses by experts. Here, I'd like to recommend a course on Udemy, An Entire MBA in 1 Course by Chris Haroun.
This course focuses on real-world business concepts. Such as financial analysis, managing cash flow, and such aspects. Apart from this, you can join courses on digital marketing by Rob Percival, or the Business Analysis Fundamentals by the BA Guide. There's a New Year Sale on Udemy, so when you purchase a course, in addition to a discount, you will also get a learning guide and many special offers. You can go try it out. The link to it is in the description below.
And start learning on Udemy today. Now let's get back to the topic. He promised the Singaporeans that Singapore will be a multi-racial nation.
That they would be an example for the world. They are not a Malay State, They are not a Chinese State. They are not an Indian State. Their country is not built on religion. Their country is not built on a language.
Neither is it built on culture. They are a secular nation where every citizen is equal. "Malay population is at 43%. Chinese 41%. Indians 10%.
The others: Eurasians, Sinhalese, and so. And I say we gotta work with each other. No group can oppress the other. We work together. And you want Singapore to remain as the sane stable place."
But it isn't enough to add the word 'secular' to the Constitution. This doesn't ensure equality in the country. People are sceptical. When people from different religions and ethnicity live in a country, with high communal tensions, people doubt each other.
They do not want to socialise with others. To solve this problem, Lee Kuan Yew took a proactive approach to assimilation. He introduced an Ethnic Integration Policy. According to this policy, the government housing would have a fixed ratio for the people living there, based on ethnicity. For example, in a building, there have to be 22% Malays, 84% Chinese, 10% Indians, and the other minority groups. The percentage of ethnicity seen in the country should be reflected in each building.
So that Chinese, Malay, and Indians, can live together in a building. Friends, this was an outstanding move. Because in reality, if people are left to their will, the communally brainwashed people will not want to live together. They create their own ghettos. The self segregate into "Hindu areas" or "Muslim areas."
There's demarcation within the city. To stop this self-segregation he ensured that different ethnicities lived in all buildings, so that they could interact with each other and be neighbours. And live together harmoniously. In 1990, the Maintenance of Religious Harmony Act was passed, under this Act, Singapore created a Presidential Council for Religious Harmony. 2/3rds of its members were representatives of the major religions.
These representatives were tasked with ensuring that the people from various religions were interacting with each other. Additionally, Singapore introduced a Racial Harmony Day as well. Every year, on the 21st of July, school kids in Singapore dress up in the traditional costumes of other religions.
That, a Hindu may dress up in a Muslim traditional costume, and a Muslim may dress up in a Hindu traditional costume. And together they read the Declaration of Religious Harmony. Right from the school level, children are taught that the principles of secularism, diversity and unity, need to be upheld in the country, and the way to do so. These small steps are very effective, ones that our country can learn a lot from. The next point that Lee Kuan Yew put across to ensure that the country is developed is cleanliness. In his opinion, cleanliness is the hallmark of civilisation.
So he launched a campaign to keep Singapore clean. "On the 1st October 1968, a nationwide Keep Singapore Clean Campaign was launched by the Prime Minister." "We have wealth, we have progressed. but there is no hallmark of success, more distinctive and more meaningful, than achieving our position as the cleanest and the greenest city, in South Asia." And this campaign was in effect in every 2-3 years between 1958 to 1988. This wasn't a superficial event, where politicians stood in front of cameras and moved a few leaves, and printed ads promoting clean Singapore.
Nope. This was a concrete campaign with multiple steps. Public waste collectors were licensed by the National Environment Agency. Each public housing estate had blue recycling bins.
A large number of public toilets were created. And special programs such as the Happy Toilet Program were run, so that the toilets could be kept clean and well-maintained. In 1992, chewing gum was banned in Singapore. No compromise in cleanliness. Apart from this, major laws were enacted, to levy heavy fines.
For spitting, littering, smoking, the first offence would be fined S$1,000 (Singaporean Dollar). Second offence S$2,000. And the third offence would attract a fine of S$5,000.
The next problem was slums. Singapore had slums all over the place. What could they do about it? More than 26,000 families were relocated from slums, and high-rise buildings and public housing were developed. Meanwhile, water supply, electricity, and gas supply, were provided in the free public housing. And things began to improve.
As of 2021, about 80% of people in Singapore, live in public housing. Homes provided by the government. This is why there is next to no homelessness in the country.
Last year, only 616 people were sleeping on the streets. After this, they focused on urban planning. The people working at stalls on the side of the road, are an important part of the informal economy. But in addition to it, in terms of cleanliness and beautification, they detract from the beauty of the city. It was important to organise them. More than 4,900 hawkers were relocated to food centres.
New wholesale markets were developed for vegetable sellers. For beautification, the pig farms and duck farms, were phased out from the catchment area. Rivers were cleaned. More than 2,800 industries were relocated.
Now, it is very important to focus on healthcare as well. In Singapore, public as well as private health care is quite inexpensive. Under the Ministry of Health, government hospitals have been equipped with thousands of beds. And they have the innovative Medi Safe, Medi Shield, and Medi Fund systems in the healthcare sector. In a country as small as Singapore with such a high density of people with so little place for people to live, building wide roads for vehicles wastes a lot of precious land. If every citizen owned a vehicle, it wouldn't leave space for residential areas.
And the country would be covered in roads. So it was necessary to discourage people from buying cars. And to promote public transport. This is why, even today, Singapore is the most expensive city if you want to buy a car.
There's a heavy tax on buying a car. In the country, on a limited number of cars can be on the road. If anyone wants to add a new car, they can do so only by replacing an existing car.
On the other hand, public transportation like the buses and the metro, Singapore has one of the least expensive public transport in the world. It is affordable for people, in addition to being one of the cleanest and safest. The things that I have talked about till now, you might think that the government is offering cheap things. Education, healthcare, public transportation, and housing. People are given these at a low cost to make these affordable. But where does the government get the money to do so? Does the government charge a high tax rate from the government? The way it is in several European countries where the tax rate crosses 50% even.
Countries like Sweden, Finland, Denmark, and Austria. But no, the income tax rates in Singapore are quite low. Between 2% to 24%. So how can the government manage to bring in the funds? Friends, here we need to discuss the primary principles of Singapore's government. They focus a lot on sustainability and fiscal deficit. Let me explain with an example.
Look at this company's website. Temasek Holdings. This looks like a large MNC.
With more than 900 employees. 33 nationalities. Its Net Portfolio as of March 2022 was $403 billion. But who owns this company? The Singaporean government.
This is a government company. Singapore's government owns many such companies working in the transport, power, or media sectors. Many such companies are Temasek subsidiaries. Temasek invests in other national and international companies to derive profits. When we think about Indian government companies, they are so mismanaged that the government has to privatise them. "Government has no business to be in business."
But by privatising, the profits of the company goes to private owners. To billionaires. But if a government company is run well, if it's managed properly, the profits will go to the government.
And eventually, the citizens will benefit from it. Apart from this, do you know which are the areas with high taxes? The tax on motor vehicles is very high. That's another source of revenue for the government. There's a wealth tax as well. There's even property tax and GST. But overall, Singapore's government is in a fiscal surplus for most years.
It earns more than it spends. The rules of fiscal discipline are written down in their constitution as well. But if you look at this from the individual level, there are some people who are not very careful with their money. They engage in unnecessary spending, and do not save properly.
This is why the government has instituted a Central Provident Fund. People deposit a part of their salary into this fund. This exists in India as well. In total, there are more than 4.2 million members of the Central Provident Fund as of September 2022.
This is why Singapore has one of the highest savings rate in the world. In 2021, the Gross Domestic Savings was 57.5% of the GDP. This puts Singapore among the Top 3 countries in the world. Not only is the government managing their funds efficiently, but also the citizens. But going back in time, as I told you, Singapore doesn't have natural resources.
That can be exploited or sold to earn money. So this begs the question, how are people earning in a country like Singapore? At the time of independence, they had barren lands. Friends, in such cases, the economy needs to be kick-started. It can be done in 2 ways. 1st: by large-scale government spending.
Creating large infrastructure projects, PSUs, 2nd: by opening up the economy, so that foreign companies could invest in the country. Lee Kuan Yew did both. He invested government money in big infrastructure projects.
Such as building world-class port. If you visit their airport today, you will be mesmerised. Singapore has one of the best airports in the world. They have built a mini city inside the airport itself.
Building homes for the workers. He created the Housing Development Board, Economic Development Board, These projects provided a large number of employment to the people, that became the backbone of the economy. Since the country did not have any natural resources, it meant that the location of the country was its only advantage. A small island can never be self-reliant.
It meant that they needed to open up the economy, And the rest of the world will need to be given the opportunity to benefit from Singapore. As I've already told you, Singapore was a port for ships for a long time. For international trading. The Singaporean government continued with this. By building a robust airport, to be a hub for connecting flights, and to facilitate international trading. To attract foreign investment, Singapore had to be a stable country where it's easy to carry on a business.
So they reduced tax rates, ended red-tapism, and useless paperwork, developed a single trade window, fired the lazy and corrupt workers from government agencies, invited international businesses, and eased up the processes. As a result, today, in terms of ease of doing business, Singapore is ranked No. 2 in the world, following New Zealand. To do this, a major precondition was to eliminate corruption in the country. Corruption would only hinder businesses.
Today, out of 180 countries, Singapore is the 4th least corrupt country in the world. It is the only Asian country to rank in the Top 10 in the last 10 years. What was Lee Kuan Yew's trick to end corruption? First, he raised the salaries of government employees. As well as the salaries of politicians and ministers. They are paid such high salaries that you won't believe it.
The current Prime Minister of Singapore, is the son of Lee Kuan Yew. He is the highest-paid Prime Minister in the world. He is paid a salary of $1.61 million.
Much more than US President Joe Biden, or the Russian dictator Vladimir Putin. it is the same for government employees. They are paid good salaries. The logic for this is if you pay good salaries to government employees and ministers, they cannot be encouraged to engage in corruption. Since they already receive a good income.
On top of it, the salaries have a performance-related component as well. For the ministers and government employees. Their good performance is rewarded by this. Third, if a minister is so greedy as to engage in corruption despite the high salary, they will be given heavy punishment. Fine up to $100,000 and imprisonment up to 5 years. In 1960, PAP introduced the Prevention of Corruption Act.
"The Prevention of Corruption Act was passed today." "While directed mainly at corruption in the public services." Their Corrupt Practices Investigation Bureau, was given more powers.
It was made independent. Basically, it is an agency that investigates corruption. It is given Operational Autonomy. Even though it works under the Prime Minister's office, the Prime Minister cannot interfere in its work. No political leader can interfere in it, this allows this agency to remain independent.
This autonomy is very important since if any politician engages in corruption, this agency can take action against it as well. In terms of the environment, in 1972, the Singaporean government launched an initiative of Tree Planting Day. A specific day on which all residents come together to plant trees.
This initiative was so successful that within 10 years, the number of trees planted was the same as the number of people living in Singapore. Within 10 years, they had cleaned their river. And today, the best indoor gardens are found in Singapore.
Look at the beautiful greenery all around the city. Singapore's greenery has become a tourist attraction now. Talking about specific sectors, Singapore started with textile and petrochemical refineries. But Lee Kuan Yew did not want his country to become a low-cost factory for the rest of the world. He ensured that the Singaporeans learned skills in technical schools and internships. Law mandated that the employers in the country had to pay a monthly Skill Development Levy for the employees working for them.
This is sent to the Skills Development Fund. To support the workforce upgrading programs. With the help of Skill Development, by the 1990s, Singapore had become a part of the global supply chains for sophisticated technologies. Such as biotech engineering, aerospace, integrated circuits, pharmaceuticals, petroleum chemicals, and semiconductors.
They provided good quality education to their citizens, and taught them useful skills, to enable them to work in industries that did not require natural resources. Friends, after doing so much, do you know what's amazing? Lee Kuan Yew knew that under all circumstances he couldn't allow a personality cult to develop around him. He was focused on his work to develop the country. Rather than developing his image. Today, if you visit Singapore, you will not find busts or statues of Lee Kuan Yew. No monuments to honour him.
No temples to worship him. He took a country from rags to riches. Even so, no monuments were built for him. Why? Singapore's current Prime Minister gave a statement regarding this in April 2015, About a month after Lee Kuan Yew's death. He developed Singapore so miraculously, that he could have depicted himself as a superhero.
He could have turned people into his followers, going as far as saying that he was an avatar of God, for taking the country from rags to riches, but he did none of these. Lee Kuan Yew was an educated person, he was pragmatic, didn't feel very strongly about any ideology. It's said that his ears were always listening. He paid attention to all suggestions.
These qualities are rarely found in politicians. "To govern Singapore, one must have that iron in him. I have spent a whole lifetime building this. As long as I'm in charge, nobody's going to knock it down." Today, many people categorise Lee Kuan Yew as a benevolent dictator, because to some extent, he was against free speech.
Singapore improved in many factors. but in terms of the Press Freedom Index, it doesn't rank as well. Things have been improving over the last few years. But during Lee Kuan Yew's governance, press freedom was nearly non-existent.
Many people learn the wrong lesson from this story. Since he was a benevolent dictator, people imagine that they too need a dictator for their country one that could put a stop to freedom and enforce their will. But in most cases, free media is very important, to hold the people in power accountable. To keep them in check. Singapore is an exceptional case because Lee Kuan Yew knew how to hold himself accountable. He listened to others.
The lesson that we need to learn from this story are the exact policies implemented by him. To take the country to the level of development it has reached. What do you think? Comment below. If you liked this video, you can watch more such case studies by clicking on this playlist here. Thank you very much!
2023-01-02 05:04
