4 Years of economics education in SMU have not made me a master in Economics, but it does make me aware of what makes a country tick (economically) and what causes it to fall. I am constantly amazed at how my country, Singapore, got it right most of the time.
Starting out as a 3rd-world country with only an active port and no resources, this country has become the 19th richest country in the world, measured in terms of GDP per capita. And thats just 43 years ago. I think what propelled us to success was the precision economic engineering done by the government and any experts that had been consulted over the years.
We began with industrialization and the development of our position as a maritime hub. We understand that we need to survive on foreign dollars and hence we build our world class airport.That was in the 70s and early 80s.
Towards the end of the early 80s, we start to feel the threat of other industrializing nations and hence we began to bang on financial services and thus seek to establish ourselves as a financial hub. Though we are still not on par with Hong Kong, we have made our mark by becoming one of the top forex and futures markets in the world.
Furthermore, we began to see the economy taking off as surpluses were gradually accumulating and the people are getting more educated and getting better jobs. We did not stop there, we began to improve the productivity of our people. We built the MRT, enhance the expressways, connect the nation with a nation-wide broadband network, better educate our children.
We soared in the 90s. With a 6/6 vision, our government once again did not rest on their laurels. They see the rest of the world catching up, they analyse what is the competitive advantages of the nation and they drafted a plan. They decided to go into bio-medical sciences, aviation engineering, further develop our position as a shipping hub, develop the private-banking industry. Understanding that economic growth relies on population and productivity growth, they tried to introduce both by attracting foreign talents that are well educated. So both numbers went up.
We are now in the 21st century. In recent memory, we just survived the Asian Financial Crisis, Sep 11, SARS and 2002-3 economic recession. So many negative shocks within a short span of half a decade. Swift and sure, the government send Singaporeans for skills-upgrading, develop local consumption by giving more attention to the retail industry, gave cash handouts to Singaporeans. Recognising that more trade must be done, the government establish FTAs with as many partners as possible, engineered a pretty successful pharmaceutical and stem-cell industry to support the faltering manufacturing industry. End result? Higher Productivity and lower rents for trade.
Towards the end of the current decade, we unleash yet another series of economic masterplan. We began a crazy building frenzy to improve connectivity, both internal and external. We try to bring in more dollars through the integrated resorts and the Marina Bay Financial District. We make ourselves financially more stable by setting up 2 of the most successful SWFs in the world
In short, we are always pushing ourselves towards a higher limit. We conducted a few experiments, we failed but it is ok. We have the cash to fail. That is the wisdom of our leaders. We build on our advantages to build greater advantages. If we fail, its ok, at least we tried. This will and drive left us with 6 - 8% of annual economic growth for the past 5 years. Something probably unheard of in any other developed economies.
And by the way, our neighbours have not taken off. Imagine how much more mutual benefits we and our neighbours can gain when they become economically better off. I am excited.
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