Why Singapore is One of the World's Richest Countries

foreign 1965 the newly created nation of Malaysia did something that Nations almost never do it voluntarily ejected a strategic and important part of its own land the 360 square mile island known as Singapore while Independence is usually a cause for celebration the new leader of Singapore Lee Kuan Yew foresaw the coming economic calamity [Music] you see the whole of my adult life I had believed in Malaysia and major Singapore was already in a terrible position prior to Independence two-thirds of its million population lived in slums with many addicted to Opium its highly mixed population was

increasingly breaking out into violence it had no significant industry and unemployment was already high its Newfound Independence now meant it was without access to Natural Resources as the island has none it's larger and more powerful neighbors were not only going to cut it off from trade but were actively hostile to Singapore's existence to make matters even worse British military forces were withdrawing from the island taking with them 20 percent of the remaining economy Singapore appeared to be destined for underdevelopment violence and poverty yet today Singapore is the fourth richest nation on Earth its citizens are

among the most educated healthy and productive of any country it has the best infrastructure in the world it is a leader in high-tech manufacturing and is the financial and logistical Hub of all of Southeast Asia but how did this unlikely poor and tiny Asian island nation go on to become one of the best places to live in the world how did Singapore become so incredibly rich this video is brought to you by Star Trek Fleet command a free to play mobile game available for IOS and Android interact with the various iconic characters from Star Trek

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own military and a fifth of the entire world's population lived on its private lands that Corporation was the British East India Company it derived its profits from shipping and trading resources from all over the world and its most lucrative cargo was Chinese tea to purchase the tea it would sell massive quantities of opium that it grew in Northern India all of this shipping happened to pass through one narrow Corridor known as the Malacca Strait quickly this became the company's most profitable trade route constituting 50 percent of its Revenue but in order to protect this route

and make the voyage more feasible the company desperately wanted their own port in the region however a naval superpower already had an iron grip in the region for the two centuries prior the Dutch had a monopoly on these lands and outpowered anyone who attempted to compete as such it was official company policy to not take any actions that might anger the Dutch out of fear of disrupting the incredibly lucrative existing trade routes but one tenacious company official named Sir Thomas Raffles took it upon himself to create such a port on the sparsely populated island that

would go on to become Singapore situated at the tip of the Malayan Peninsula it was the ultimate location to set up shop after some back and forth in Europe the Dutch eventually did nothing to stop the British from having the territory foot Singapore was not to become an ordinary port in order to attract Traders away from the existing ports in the region Singapore was to become a Freeport meaning there were zero taxes on businesses or port-related activities this was a massive advantage over the other heavily tax ports in the region and word quickly spread in

just four years Singapore had attracted tens of thousands of Traders from China Malaya and India soon The Horizon became full of ships as ever everyone clamored to seek their tax-free riches but because of its lack of significant administrative oversight Singapore became a hub for Less desirable Ventures slave trading gambling opium dens violence and prostitution became commonplace a booming International Trade continued to propel Singapore's importance and popularity this was supercharged by the opening of the Suez Canal in Egypt trading from England to China was now 5 000 less miles which in turn cut costs and dramatically

increased shipping demands the Nuru also now favored the Strait of Malacca instead of the tsunder strait meaning more traffic was passing by in utilizing the poor Singapore was Now by far the most important port in the region and as such in 1967 it became an official Crown Colony of the British Empire but yet another development would Propel its importance further the introduction of rubber trees of Malaya and booming Global demand for tin which was a bunch in the region meant Singapore was no longer just a stop on the way to China but the hub for

the riches of Southeast Asia resources would be extracted from the peninsula and then transported to Singapore where it would be processed and shipped globally as Singapore has no natural resources this fostered a symbiotic economic relationship with Malaya with its growing importance came greater British military presence creating industry surrounding its dockyards and providing services to military personnel by the year 1900 tiny Singapore would be home to more than 200 000 people who were much better off than those in other nations in the region but Singapore's centuries of unhindered growth would come to a screeching halt as

the 20th century progressed Singapore even being 6 000 miles away from Europe was not safe from the ensuing Global conflicts during the second world war the Japanese empire was engulfing all lands that came into contact with in December 1941 the Japanese invasion of Malaya had commenced and within two months it was at Singapore's doorstep despite orders from London Singapore was officially surrendered on February 15 1942 and for three years Singapore would undergo unbelievable suffering and destruction even as the tides of War changed and Liberation came in 1945 the retaking of the island leveled much of

the remaining structures Singapore was no longer a jewel of Southeast Asia but a smoldering pile of rubble devastated for war and neglected from a crippled British Empire the rebuilding of Singapore was uncoordinated and unregulated haphazard slums started to dominate The Island emphasis structure was not fully restored and violence and opium continued direct the population as one Travel magazine put it Singapore was filled with utter filth and poverty one must seal with his own eyes to believe it over the centuries the British did little to promote or integrate the diverse and densely packed population there was

no Singaporean identity as each group lived amongst themselves fought for their own resources stayed isolated to their own customs and oftentimes had conflicting interests with the other groups now with terrible living conditions and growing unemployment these groups started to engage in violence further worsening Singapore's situation for most of Singapore's existence its desire to split from the British Empire was low as its lack of resources meant it did not experience the exploitation that other colonies faced when the British Empire was not able or willing to defend it during the war with its now crippled economy Rising

social violence and with the decolonization of much of the rest of the world the idea of Independence started to propagate among the population singaporeans would go on to put their trust in one man to do just that Lee Kuan Yew a lawyer who spent his years studying in Britain formed the People's action party or Pap and was able to successfully gain a few seats in local elections in 1955. Lee spearheaded the independence movement prompting London to initially clamp down on the pap but with changing British public opinion in favor of decolonization the process of Independence

had begun in 1959 Lee was elected as prime minister on the promise of merging with Malaya as in his mind it was the only way for Singapore to survive its economy was symbiotically linked with Malaya it had no capacity to defend itself and it needed help in controlling the violence in writing its economy therefore merging with Malaya made sense on September 16 1963 this became a reality when the former colonies of Malaya North Borneo Sarawak and Singapore merged to become the Federation of Malaysia but there is a problem the Malaysian elections resulted in a party

coming to power that ruled on the promise of putting ethnic malaise first this was a problem for Singapore which at the time was 60 Chinese in deeply mixed ethnically massive violence broke out in the streets and the pap against their promise ran in the federal elections on the promise of a fair and multi-ethnic state the ruling party saw Singapore as a threat to political social and economic stability as such unanimous Anonymous vote ejected Singapore from the nation just two years after the merger against its wishes Singapore was independent and a loan defend for itself Lee

Kuan Yew found himself in an impossible situation how do you build a nation out of a population that has no national identity let alone make it a prosperous State how do you create jobs when you have no natural resources how do you pull 70 of your population out of abject poverty house and educate them and set them on a course for a greater life Independence also brought the departure of the British military further damaging the economy and taking away even more jobs the cards were stacked against Singapore which now found itself south of a Malaysia

that planned to starve it economically by stealing trade and north of an expansionist Indonesia who possibly had aspirations of invading Lee Kuan Yew knew the fate of his fragile nation was up to him and he decided he was going to drag Singapore into modernity even if that meant with an iron fist the first thing to overcome was the social unrest while at the same time working to cement the Pap's political power individual freedoms were curtailed Free Speech was banned political opponents were jailed without trial and Draconian punishments were carried out for rioting violence and drug

use this hard-line authoritarian approach even included public keynings for chewing gum graffiti and public drunkenness anyone that spoke out against the government was sued into bankruptcy religious extremists communist Chinese malays who wanted to reunite with Malaysia were all silenced or Worse Lee Kuan yew's solution to the potentially explosive underlying ethnic and social tensions was authoritarian rule however as horrible as this was it worked in curtailing violence in stabilizing the nation in his mind the population would not care about the diminishment of their freedoms if it meant he could provide them with economic prosperity and social

peace free elections would continue in theory however they would be tampered with so much that the nation would become a one-party State under the pap whose Rule still stands to this day with the social and political situation stabilized Lee would carry out a dramatic economic overhaul that would go on to enable a miracle the most pressing economic problem to address was housing representing one of the largest slum populations on Earth seventy percent of all singaporeans lived in rough temporary structures with no Plumbing Lee instituted a controversial law allowing the government to buy land cheaply to

which row after row of affordable housing would be constructed while initially inspired by the British welfare state Lee did not want his people dependent on the state forever as a way to give citizens a stake in the nation's prosperity to increase upkeep of structures and to build wealth residents were heavily encouraged to buy their apartments at low rates the way in which they could afford this was through another policy that forced a percentage of one's income to be saved called the central Providence fund originally the savings fund was for pensions however Lee modified it allowing

citizens to spend it on housing slowly over time the amount forced to be saved was increased to 25 percent of every paycheck with with another 25 percent being deposited by employers this eventually made Singapore the nation with the highest ratio of savings to income earned this savings policy coupled with cheap rates for state-owned housing proved to be a massive success all citizens living in slums were housed and most started to be able to own their own property today eighty percent of all singaporeans live in houses they own that were originally built by the state this

has allowed singaporeans to largely avoid the extreme housing prices in other similar Nations like Hong Kong but building houses for the population would not nearly be enough if the economy did not have jobs for them to work at with no resources no real existing manufacturing and neighbors reluctant to trade Lee knew the only way to grow was by doing everything possible to attract foreign investment keeping in line with Singapore's historical Roots taxes and regulations were kept low companies were even given massive incentives like being completely exempt from taxes for 10 years to keep wages competitive

Lee ban unions and actively encourage businesses to fire all workers when faced with the strike the government also started dumping money into infrastructure projects and creating sprawling modern industrial zones seeing as Singapore's domestic Market was small numerous policies were implemented to gear the economy toward exports mixed with Singapore's existing Port incredible geography and business friendly policies simple labor-intensive foreign businesses started pouring in this was helped further by Mao zedong's cultural revolution in China that scared investors away from Hong Kong and Taiwan within just 10 years Singapore had practically zero unemployment and the economy was growing

at a monstrous 13 every year Singapore would continue to implement hyper-capitalistic policies to increase investment by Foreign companies so much so that it is the second can easiest Nation to do business in with an economy starting to become ever more reliant on government intervention Lee also took drastic measures to cut out corruption this included sentencing those suspected to death as well as offering some of the highest wages in the world for government officials helping to reduce the desire to engage in corruption in the first place this worked and today Singapore is one of the least

corrupt Nations on Earth this substantially increased the effectiveness of policy implementation as well as increasing investor confidence further boosting growth and cutting down on wasteful spending but Lee did not want Singapore to always be focused on simple cheap manufacturing he knew the most valuable resource the nation had was its human capital as such he started creating technical schools paid foreign companies to train workers and created modern hospitals to keep the population healthy this in turn brought in more specialized industry and thus higher wages higher savings and more budget for the government to reinvest in education

this created a positive feedback loop of productivity gains by the 1980s Singapore was now in the business of petrochemicals Pharmaceuticals Advanced computer components shipbuilding chemical manufacturing and More in fact despite Singapore's lack of resources it had become the world's third largest producer of refined petroleum this is because it had once again become the regional Hub of Southeast Asia importing raw materials from its neighbors processing and Manufacturing them and then shipping them across the planet this status of regional Hub was further facilitated by Singapore's rapidly growing financial sector which strategically bridged the gap between American markets

closing and European markets opening this rise was also perfectly timed as many Asian nations were undergoing tremendous growth allowing Singapore to act as a logistical and financial Hub through which foreign investment was distributed this mixed with pro-financial policies allowed Singapore to become the fourth largest financial center in the world but Singapore coming from such humble beginnings meant it did not have its own class of entrepreneurs the lack of capital and Technical know-how meant it was impossible for singaporeans to build substantial companies of their own to compete on the world stage not wanting to be left

out and to further facilitate growth Lee organized a group of gifted civil servants in international businessmen to make efficient state-owned Enterprises this included Singapore Airlines steel iron and chemical manufacturing and many other Capital intensive Enterprises while state-owned companies are usually synonymous with inefficiency in Singapore their primary objective from the very beginning was to make a profit low corruption in government Lee's willingness to shut down loss making Ventures and the lack of unions which kept costs low meant these companies were wildly Successful by the 90s the government began limited privatization of the most profitable giving singaporeans

preferential rates for buying share players these companies help to diversify the economy as well as filling gaps in the market the revenue generated was also placed in a sovereign wealth fund which was then used to further funding for Health Care infrastructure and education today Singapore is one of the richest most advanced and competitive economies in the world it operates the second largest port is the second easiest Nation to do business in and still attracts the third highest foreign direct investment its people have affordable housing they have access to world-class health care and their students test

the highest in the world its government under Lee Kuan Yew was able to efficiently Implement policies that relied not on ideology but on their utility to Singapore's long-term prosperity but this has of course come at the cost of political and certain individual freedoms while it's hard to agree with its authoritarian governance it's hard to argue with its success the Consolidated power allowed Singapore to maximize its advantages while limiting its shortcomings Singapore has always been lucky with its location on one of if not the most important global Shipping Lane it got lucky with writing the growth

of globalization in the second half of the 20th century but most importantly it got lucky that its dictator Lee Kuan Yew was smart and more or less benevolent in his actions while it might be easy for those of us that live in Western countries to criticize some of Singapore's actions our ideals and institutions have had hundreds of years to form while developing nations are expected to do the same in less than a generation the path Singapore took should not be and likely can't be replicated by other nations Singapore's economy is not perfect for the world

it's perfect for Singapore foreign