“There was no secret, we had no choice but to take chance and sail into rough waters”- Lee Kuan Yew
Singapore is an inspiration to Sri Lanka and other developing countries in terms of economic development, political stability, and good governance. Since 1967, it has increased its per-capita purchasing power (PPP) 10-fold to $44,600 in 2007, surpassing countries such as Switzerland’s PPP ($37,300) in 2007. Singapore also has high demographic development compared to Sri Lanka even though both countries were about even in 1960s. The President, Lee Kuan Yew, navigated the Singaporean economy after gaining independence in 1965. With a population of over 5 million, Singapore maintains a market driven guided economy with diversity in cabinet and government.
What was their secret to success?
At independence in 1965, the economy was met with unemployment problems, an unskilled workforce, few entrepreneurs, no domestic savings, wretched housing conditions, militant labour unions and racial riots. They devised a strategic economic plan; developing entrepot (commercial) trading, export driven manufacturing, and then creating a service based knowledge economy.
They targeted education in three phases; the early industrialization phase, the post-1979 industrial restructuring phase and the post 1997 Asian financial crisis era. They were also strategic in developing their infrastructure, creating efficient and innovative structures that were continually upgraded. In essence, they had a planned structural transformation from entrepot trading to manufacturing and then finally to service. As a result Singapore is now ranked as the 3rd in terms of overall competitiveness among 125 counties.
In terms of fiscal and monetary policy, government expenditure to GDP ratio is about 10% with a budget surplus. The Central Bank of Sri Lanka’s equivalent is the ‘Monetary Authority of Singapore’ which is considered among the 10 most sophisticated financial markets. The money supply is endogenous (from within) and exchange rate policy curtails imported inflation.
Singapore also has political stability and quality of governance is needed for the economy to grow. Singapore is managing a plural society, rule of law to maintain good governance. As a country with new born peace, Sri Lanka has key lessons to learn from Singapore.
One country cannot be a model of another country. But any country can be inspired by another. Singapore is a good example for Sri Lanka to open doors toward the success to overcome economic war since every problem provides an opportunity for the growth. I am truly inspired by Dr. Abesinge of National University of Singapore’s lecture at our University and Singapore’s journey towards development. The time and opportunity has come for Sri Lankans to emerge among developing economies and learn from the experiences of others.
Join the Conversation
As Chathurika said, one country cannot be a model of another country but there are a few characteristics that I think are unique to Singapore in the region that has propelled it to where it is today. -Relatively low incidences of corruption with pragmatic rather than ideological governance with social and political stability -High Investment in human capital and infrastructure -Progressive taxation... laws... See more -Low barriers of entry to starting businesses and encouragement of foreign and domestic investment in industries -Marketing of Singapore as a trading, logistics, and foreign investment hub -Tolerance for different ethnic groups, religions, tradition, etc.
Read more Read lessWith all due respect for strategies and work plans, as citizens of this country, they should be more pro-active. In one term - Entrepreneurial. This is taught in Schools and universities, yet where is the application? . It can be applied at any given moment in any citizen's life. Entrepreneur is a person who search for solutions, not just money. When one performs well, it infects others. I am not the... best at this moment to talk on macro economic indicators, to assess whether Sri Lanka is feasible for economic growth. I mean...everybody knows there won't be any better time than this. It's time to perform - all citizens in their areas: at workplace, at home, at community.
Read more Read lessGreat blog posting. The only additional point that I would make is in the early sixties, Lee Kuan Yew is reported to have stated that Singapore was looking up to Sri Lanka as an aspirational model! And, now it is the other way around!
"One country cannot be a model of another country. But any country can be inspired by another" These words are very crucial for the policy maker and researcher. Most of the emperical studies are replicated to other countries or they are conducted on the panel of countries. On the basis of these results policies are laid down. But as each and every country differ in various asepect so it is very imporatnt... that country specific studies may be conducted. Instead of replecating the emperical models to other countries, new model may be developed by considering the country specific socio-economic environment.
Read more Read lessSri Lanka can hope to emulate Singapore only if it were to meet two preconditions Singapore instituted. One was a transparent, clean, accountable and predictable business environment, one that was tied in to a robust civil service and good administration even if it did not meet the Westminster credentials of competitive party politics. The other was a level playing field for different ethnic and... religious groups where the politics of ethnicity, religion and history were not incentivized unlike Sri Lanka. The ethnic Chinese were 74% of Singapore, much as the Sinhalese were 74% of Sri Lanka. But Singaporean identity was defined in a manner that was not determined by the legacy and history of one ethnic group alone. All ethnic groups helped define the inclusive national identity. That is a crucial difference that Sri Lankans, including the author, need to appreciate.
Read more Read lessFirstly, 'High Investment in human capital and infrastructure' is the principal reason for progress which every nation must learn, particularly India and Sri Lanka having pluralistic societies and where economic and social disparities are impediments to progress. Secondly, Singapore is a city state and its model can not be copied by other types of countries. For Sri Lanka, the best course would be... to develop its villages by creating employment potential at local levels through making 'High Investment in human capital and infrastructure'.
Read more Read lessInteresting post. But the initial conditions in Singapore were far different from what is described here. = Let's not forget the work ethic of the majority of the Singapore population - which is probably the single most important determinant of success. Emulating Singapore without such work ethic will be impossible. = Let's not forget that independnece for Singapore was simply the split from Malaysia.... The will to succeed as a result of thsi dissolution was tremendous. = Let's not forget how open markets and openness to foreign direct investment contributed to prospority. Acheiving such level of openness is never easy. = And let us not forget the determined ambitious government. Thus, while looking at Singapore as an example, we need not forget the unique features that made it a success. And Sri Lanka has plenty of examples to look at. Today, there is no lack of lessons how to grow fast. The trick is to muster the political courage to do it.
Read more Read lessAs Ms. Chathurika says Singaporean economy provides a sort of inspiration to a country like Sri Lanka that is craving for the economic development. Sri Lanka leaders inspired from the success of NICs a few decades ago. But we have so far miserably failed. Why? Is it because that we had a civil war? Partly true, but that is not the whole truth. Development literature has shown that economic growth is... determined by several arrays of factors ranging from physical capital to institution and cultural factors. Sri Lankan society lacks most growth friendly institutional and cultural factors. Hence, the need of the hour is to, in addition to addressing the bottlenecks emanating from physical and human capital sides, launch a determined effort to make attitudinal change that is pro-growth. Singapore and most NICs had it or their leaders were able to inject it to the society.
Read more Read lessThank you Chathurika for posting this interesting piece of writing. Actually I was once doing a mini case study on Singapore in order to see as to how Singapore became one of the most successful knowledge driven economies. I found out that one reason behind their rapid growth was the investments on research and development. Innovations and putting those into practice is a major initiative undertaken... not only in Singapore but also Taiwan, Malaysia, Japan etc... Human capital development also acquires a pivotal role backed by the Government's clear vision and policy measurements which doesn't change due to change of power. The problem we see in Sri Lanka is that macro level policies affecting education, health and economic development tend to fluctuate at the event of a change of power or Government. In countries like India whoever comes into power abide by these national policies as it affects the whole nation. So we need to adopt consistent national policies and not be driven by political motives. It's not that Sri Lanka cannot change but the correct initiatives and commitment is lacking. Actions are limited to words and policy documents/commission reports and marching ahead with the head held up is vital.
Read more Read lessI n summary what I asked was whether the good governanance meaning tollerance dissent, treatment of all ethnic or religious groups equally freedom of expression are necessary conditions for achieving economic development and poverty allevation? Do the experieces of Korea in 60s and 70s, that of Malaysia or currently China or even now Singapore are evidence for good governance and democracy as preconditions... for development?
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