Few would have predicted that 60 years ago, Singapore would become one of the richest sovereign nations in the world. Today, its story should reframe our thinking on how to create prosperity.
Of course, there are as many answers to the question of how to eradicate national poverty as there are people trying to eradicate it. These answers range from fixing dismal infrastructure, to improving institutions, to increasing foreign aid, to boosting foreign trade. The “Singapore miracle” shows the impact foreign investors can have, especially when compared with foreign donations.
In 1965, Singapore was expelled from the new Federation of Malaysia and the country was very poor (with only $400 GDP per capita). The population was largely uneducated, the government was spectacularly corrupt, and the country was beset by frequent riots. The new nation found itself in desperate economic straits. Unlike some other developing countries, Singapore had no natural resources to trade with the world and a small population. Numerous reports at the time suggested it was too small to be economically viable.
[To view the full article, click here.]