The Singapore Model of Economic Growth and Urban Development Case Study

A Case study of Singapore Model Development

Today Rahul Chakrapani is talking about one of the greatest leaders in world history and the biggest ecnomic and urban develepment model of Singapore that is the singapore model development. This is the story of a man who turned the small island of Singapore from a slum colony to one of the richest nations in the world. In 1965, Singapore was already facing an economic crisis  apart from that, they had  nothing no natural resources, no population advantage,   no industries very few factories, and their the biggest employer is the British Army. British Army was planning to leave which was about to wipe out 20% of their GDP. Every possible obstacle that you can think about to pull the country down to extreme poverty was being faced by Singapore.

How did they come out of that?

So, the question is Who is this leader?  What was his strategy?

What can a country like India learn from the incredible case study of Singapore?

So, the question is Who is this leader?  What was his strategy?

 What can a country like India learn from the incredible case study of Singapore?

This incredible person that I’m talking about that  is Lee Kuan Yew This strategy for his countrey  can be summarized in 3 important pillars that laid down the foundations for Singapore’s progress.

Pillers of Singapore Model

The first thing he did was to identify the risk points and design a strategic solution for each one of these high-risk elements.  And before getting into the act, in 1965 Lee Kuan Yew spoke to the British authorities and convinced them to stay till 1975 because had the Britishers left immediately the island would have been left in ruins. Thankfully, the Britishers agreed. That is how the countdown started for the people of Singapore and Lee Kuan Yew had just 10 years in hand to turn the situation around for Singapore. Now, in 1965, there were 3 areas wherein Singapore possessed extremely high risk that are as follows:

1.Not havng An Army of Singapore

the British army was planning to withdraw so they had to build an army from scratch because during the same time Indonesia was facing a military coup because of which the government in Indonesia had fallen.  if Singapore didn’t have an army of their own either a country like Indonesia could have invaded them or there could have been an insider threat.

2. Not enoughJobs in  Singapore 

jobs are a very big issue back then in singapore the Britishers also employed a lot of people they will be leaving the country soon so that  which is why at least 30,000 jobs had to be at least created before the Britishers left.

3.lack of Industries and Business

last and most importantly, because there were no industries or a lot of factories they had to build the infrastructure just so that they could either build businesses of their own or invite investment into the island.

Now, How to fix this issue, the soultions 

An Army  From Scratch for Singapore  

This where the first pillar came in and that is building an army from scratch. Lee Kuan Yew got in touch with multiple countries like India and Egypt but nobody came to help. That is when like a guardian angel Israel came to their support And just like Israel, national service was made mandatory for all men above the age of 18 by something called the National Service Act in 1967. Now, this gave the island 2 major benefits.  The first was an army of their own but secondly, each one of these cadets was taught in school that the greatest threat to their country is not an invasion from an outsider but the conflict between the insiders.  the military practices started to lay the foundations both, for the army and the unity of the country. And even today, the value of unity is engrained in the lessons taught in the schools and colleges of Singapore.

Not Creating Enough Jobs in Singapore

Then we move on to the second high-risk element and that is creating enough jobs.

This is where Lee Kuan Yew’s perspective of learning from other countries came in very very handy. To tell you about it, People, just like today, we’ve got software companies that are creating jobs all across the world, the era of the 1940s and 50s was all about the textile industry. this is where countries like Hong Kong and South Korea were also undergoing a similar situation to that of Singapore in the 1960s   wherein they had a poor economy and did not have enough jobs.

So, you know what they did?

Singapore Opened up the Economy 

They opened up their country and invited textile industries from all across the world to create jobs because they could provide them with the cheapest labour rates in the world. And Lee Kuan Yew understood the potential of this movie way back in the 1960s itself. During this time, just like the textile industry was prospering in the 1940s-50s the electronics industry was prospering in the 1960s.  So, way back in the 1960s itself just like Hong Kong, the government of Singapore enacted new laws which would lower the labour cost and gave out amazing incentives to companies by lowering the taxes on imports and exports duties.

For example,

if a company wants to move from one country to the other for manufacturing the only reason for their hesitance is the heavy investment that they have to make for land and infrastructure. So, to make it easy  the government would give them land at a very heavy discount and the import taxes on machines and equipment would be lowered to a rock bottom level. Wherein the land and import duties are given away at a dirt-cheap cost just so that the government can create a recurring income out of the taxes on the profits of the company and the salaries of the employees. Now, just to tell you how incredible and futuristic this vision was

Here’s a fun fact:

while Singapore opened up to the world way early in the 1960s itself China opened up to the world 10 years later, post-1978. India opened up to the world two decades later in 1991,  when we were at the brink of an economic crisis. Then guess what?

The British  Exit from Singapore

In the case of Singapore, this futuristic move created thousands of jobs for the people of the island. And immediately just when things were going very well, shocking news came in Wherein the Britishers announced that they were about to leave the country four years early in 1971 itself. this meant that30,000 people will be left jobless within that year itself. But guess what? By 1971 itself, Singapore had created so many jobs that not a single one of those people were left jobless. Not a single piece of land was left unoccupied.  Not a single building was left unutilized. And every single resource was turned into an economic asset. This is how Singapore evaded the second risk that is the loss of jobs due to the early departure of the Britishers.  And when this happened  the world knew that Singapore is not just an ordinary Island but an extraordinary nation in the making.

Infrastructural investment  of Singapore

this is what brings me to the third pillar and that is a strategic infrastructural investment from 1963 to 1975, the government of Singapore took 14 loans from the World Bank and 10 of these loans were exclusively invested in infrastructural projects. two of the most mind-blowing projects are the Jurong Port and the Jurong Town Corporation (JTC). Both these projects were implemented such that  Singapore could leverage the only valuable asset they had and that is the strategic location for trade. the reason why I say they are mind-blowing is because  Singapore invested $14 million to build the Jurong port today the Jurong Port generates revenue of more than 150 million dollars every single year.

JTC for Infrastructure 

Meanwhile, the JTC was responsible for the major infrastructure projects like the cleanup of the Singapore River which was once a dumping ground by the way, full of filth but today it has turned into one of the most beautiful tourist spots on the island. JTC was also responsible for the reclamation of land and many major construction projects on the island. And guess what? The same Jurong Town Corporation that was initiated during the old days of Singapore today has become a major contributor to the economy and in 2020 alone it has generated a revenue of $2.43 billion.  This is what happens when the government knows how to do business.

Singapore history of slums

Now, we move on to the most incredible infrastructural project of Singapore that is the fixing ISSE of the housing crisis.  If you remember, Singapore was once one of the largest slum colonies in the world. And these slum colonies again brought 3 potential threats to the country.

Number one,

the slum colonies occupied a large area that could have been used for more productive ventures like industries and hotels.

Number two

these slum colonies were in a very unhygienic condition and could have resulted in a disease outbreak in no time. And most importantly, these colonies were formed in clusters and led to communal segregation.

For example,

there was a cluster wherein only Tamilians lived or the other cluster wherein only the Chinese lived. Now, on the outside, this might not look like a big deal, but you know what guys? Communal segregation is one of the biggest threats to society  because communal segregation is what leads to communal violence. You don’t believe me? Look at any horrific riot that has happened in India or the rest of the world and you’ll see that they are directly or indirectly associated with communal segregation. In the case of India, you know very well what type of segregation I’m talking about.

Housing Development Board

This is the reason why Lee Kuan Yew made it a priority to not just build houses but to also make sure that people of every community lived together without being segregated. And this is where the role of HDB, that is, Housing Development Board came in and they executed this using 3 wonderful strategies.

Number one,

to make houses affordable, they made it mandatory for the people of Singapore below the age  of 55 to save 20% of their income into a social savings fund and this is what was called the Central Provident Fund.  And the employers were also asked to contribute 17% to this fund. This money could be spent only on specific essentials or on housing. And for those who couldn’t afford it, apartments were given at subsidized rates on rent so that when these people had enough money in their savings accounts  they could take a low-interest loan, eventually, buy the house itself.

Number two,

to prevent these societies from deteriorating into a modern slum the HDP ensured high-quality maintenance and made hygiene a priority because of which the public housing of Singapore looks like an elite township.

Number3 

the beauty of their town planning is that they introduced something called the Ethnic Integration Policy in 1989 in which every building has a specific quota for every ethnic group depending on their population ratio.

For example,

the Malays can occupy 25% and the Chinese can occupy 87% of the block. And because of this wonderful move the Chinese, the Malays, the Tamilians, and all other minorities lived in the same neighbourhood. And most importantly, they had equal access to both the housing facilities like parks and government facilities like metro and railways.   And this avoided clusters to a large extent and minimized one of the biggest threats that haunted Singapore for decades and that is communal violence. And there are very very less clusters because of which all the communities on the island live peacefully together. As a result of which, the best part is politicians have not been able to use communal disputes to create a vote bank.

The New Singapore 

Singapore is such an amazing place to do business that people brag about how you can open up a company in Singapore in less than 3 hours.   And the medical facilities are so good that the leaders of other nations take a special trip to Singapore just so that they can get admitted into a hospital and get themselves treated. These are the high standards that Lee Kuan Yew set for the people of Singapore and in 35 years of his governance,  The per capita GDP of the country grew by an astonishing 2800%.  And went from just $400 to $14,500. Singapore went from being a slum colony to becoming a land full of high rises and skyscrapers. the same Singapore which was once sinking in poverty has now become a super prosperous financial and manufacturing hub of the world. most importantly, Singapore went from being a vulnerable piece of the island to becoming one of the richest and one of the most powerful nations in the world.

Now, we come to the lessons from this miraculous case study.

Nationalism

just like Singapore has mandatory military service we need a system in India not because we want to expand the military but because today in India, in the name of nationalism  we’ve got pseudo-liberals and radicals popping up and in Twitter, you’ll see more often than not, both of these groups engaging in texting wars which results in nothing but futile debates. But the underlying problem over here is These cyber riots won’t take long before they turn into physical riots. So, our generation needs to be taught the value of unity and the factthat there is a thin line between pseudo-liberalism, nationalism and radicalism.

Mindless Socialism, Conscious Capitalism,

& Evil Capitalism.

Every politician, every leader, and every citizen in this country needs to understand the difference between mindless socialism, conscious capitalism, and evil capitalism. Mindless socialism is when the government gives out unnecessary subsidies, not for the progress of the people but to create a vote bank. The other extreme of the same is evil capitalism Wherein the government and the companies will try to make money even if that means charging for cancer medicines and making money out of the disease caused to the citizens. far far away from both these concepts are where we have conscious capitalism  wherein the government puts restrictions on the citizens and spends every penny of the public fund to generate a return on investment and runs a country like an organisation that needs to channelize its profits towards the welfare of its citizens.  just like world-class companies teach us business lessons and marketing strategies, world-class countries can teach us invaluable growth lessons on how to develop a country. just like Lee Kuan Yew learned from Hong Kong and South Korea   the citizens and politicians must learn from the success and failures of countries just so that we can become constructive critics of these policies and politicians can frame policies based on the learnings from these countries.