Singapore is a clear example of the close link between economic growth and political stability.

In fact,
after the independence of Singapore in 1965, the first Prime Minister Lee Kuan Yew was able to give to
the new born Republic of Singapore the stability needed in 1969. In the 25 years that Lee Kwan Yew led
Singapore, the city state was transformed from a tiny colonial outpost into a thriving, global economic
center. Per capita GNP has risen from US$920 in 1965 to US$23,300 in 2000. Singapore Gross Domestic
Product (GDP) per Capita reached 59,819.000 USD in Dec 2020. There are many factors that justify the
sky rocketing development of Singapore. The Economist identifies three main factors: (1). The strategic
location of the island, just suspended in the Malacca Strait that guarantees the control on 40% of trading
passes. (2). The friendly policies adopted by the government towards foreign investments. (3). An
efficient and “honest” government is the true key of Singapore’s success. Singapore's government and
public sector are regarded as one of the most efficient and cleanest in the world. Its infrastructure
facilities are world-class. All these factors combined contribute to Singapore being ranked amongst the
top in terms of global competitiveness and development. Singaporean public sector is considered clean,
meritocratic, efficient, and well-structured. Today, the Singapore economy is one of the most stable in
the world, with no foreign debt, high government revenue and a consistently positive surplus. The
Singapore economy is mainly driven by exports in electronics manufacturing and machinery, financial
services, tourism, and the world’s busiest cargo seaport.

the true key of Singapore’s success lies in its efficient and honest government.

In 2017, Singapore was ranked as the world’s second most open economy by the Heritage Foundation’s
Index of Economic Freedom, as well as the world’s second most pro-business regime by the World
Bank’s Doing Business report. Despite its small domestic market and a lack of natural resources,
Singapore successfully weathered through the financial crises of 1997 and 2008. Today, the Singapore
economy is one of the most stable in the world, with no foreign debt, high government revenue and a
consistently positive surplus. The Singapore economy is mainly driven by exports in electronics
manufacturing and machinery, financial services, tourism, and the world’s busiest cargo seaport.

The Singapore economy is on a healthy growth path – it was ranked the third wealthiest nation in the
world by Fortune, and has enjoyed high rates of foreign direct investments (S$62 billion in 2017).

Singapore is a high-income economy with a gross national income of US$54,530 per capita, as of 2017.
The country provides one of the world’s most business-friendly regulatory environment for local
entrepreneurs and is ranked among the world’s most competitive economies.

In the decades after independence, Singapore rapidly developed from a low-income country to a high-
income country. GDP growth in the city-state has been amongst the world’s highest, at an average of
7.7% since independence and topping 9.2% in the first 25 years.

The country became one of the most prosperous nations in the world by the 1990s, thanks to its free
market economy and their international economic ties.

Singapore has a highly-developed and successful free-market economy and has made the most of its
limited natural and human resources. It has enjoyed a remarkably open and corruption-free
environment, stable prices, and a per capita GDP higher than that of most developed countries. Its
economy depends heavily on exports, particularly in consumer electronics, information technology
products, pharmaceuticals, and on a growing financial services sector.
The transformation of the Singapore economy over the past five decades has been impressive,
producing rapid economic growth and delivering extraordinary improvements.

Singapore is a key hub in Southeast Asia and in some cases globally for finance, transhipment activities,
business services, transportation, and logistics.

During that period, Singapore has evolved into a developed economy with multiple engines of growth
including globally competitive manufacturing clusters, one of the world’s pre-eminent financial and
transportation centres, and the location for regional or global headquarters of major corporations.

Singapore is known internationally for its successful economic development. Key to its economic
successes is a variety of policies put into place over the past 50 years since its independence. 

Since achieving Independence from Britain in 1957, the Malaysian economy has been structurally
reformed through the move from a heavy reliance on raw materials such as rubber and tin to an
industrial based situation. Most of these changes and especially the development of heavy industries
have been aided by government funded agencies such as the Heavy Industries Corporation of Malaysia
Berhad (HICOM). This placed a heavy economic burden on the State and in 1983, in line with the global
spread of neo-liberal policies, major privatisation reduced government involvement in the economy.

Fifty years ago, Singapore was an undeveloped country with a GDP per capita of less than $320. Today, it
is one of the world's fastest growing economies. Its GDP per capita has risen to $60,000, making it the
sixth highest in the world. For a country that lacks territory and natural resources, Singapore's economic
ascension is nothing short of remarkable.

The literacy rate has risen from 72% in 1970 to over 92%. The number of people living in owner-
occupied housing rose from 9% of the population in 1970 to 90% by 1990.

II. Background

Founded as a British trading colony in 1819, Singapore remained a British colony until 1963 (aside from a
period of Japanese occupation during WWII). In keeping with its historical roots as a merchant
crossroads, Singapore has an ethnically diverse population made up of Chinese, Malays, Indians,
Caucasians and Eurasians (as well as other mixed groups) and Asians of different origins. In 1959, on
winning the election the socialist People's Action Party (PAP) instigated self-government within the
British Empire. In 1963, PAP called a referendum in which the country voted to leave British control and
join the new Malaysian Federation. Unification was a lifelong dream of PAP leader Lee Kuan Yew. This
dream would however be short lived; independence was imposed (a unique case for the modern world)
when in 1965 Singapore was expelled from the Federation following the violence of the 1964 race riots.