How Lee Kuan Yew transformed Singapore from small town into global financial hub

Bowing out: former prime minister of Singapore, Lee Kuan Yew, has died at the age of 91. Image: Getty.

This week, we're looking at different perspectives on Lee Kuan Yew's governance of Singapore. This piece examines the positives. 

Lee Kuan Yew, the founding father of one of Asia’s smallest but most developed economies, has died. Lee led Singapore after its separation from Malaysia to emerge as one of the world’s most powerful financial centres.

The tiny nation, whose main industry was manufacturing when it became an independent republic in 1965, saw its GDP per capita skyrocket under Lee to one of the highest in the world in 2013. Its population has doubled to more than 5m.

Singapore flourished thanks to Lee's foresight and skill to join the ranks of New York, London and Switzerland as a global financial hub. Singapore has no natural resources of its own to exploit, so Lee used its port to increase trading activity. 

Even though Lee was criticised by many for leading the country in an authoritarian style that stifled political dissent and press freedoms, his firm grip on power and maintenance of stability gave little scope for corrupt financial practices. The orderliness that Singapore became known for was attractive to foreign investment – billions of dollars poured in, ensuring the country’s economic success.

Lee maintained a tight grip on domestic finance by preventing the internationalisation of the Singapore dollar and limiting the operations of foreign banks. This meant international firms saw an opportunity to establish themselves in the tiny island nation. Sound financial and economic policy coupled with a corruption-free environment and technological advancement meant many multinational firms chose Singapore as a regional hub. Lee championed free trade, which helped Singapore attract a free flow of foreign investment and multinational giants such as General Electric.

Singapore’s central business district, a hub for international business. Image: Limtohhan at Wikimedia Commons.

One clear factor in Singapore’s rise was Lee’s ability to take consistent advantage of global financial upheavals. This began in 1971 when America de-linked the dollar from gold. Lee was quick to grasp this opportunity and established Singapore as a regional centre for foreign exchange.

Indeed, since 1968, the Singapore government has provided incentives and preferential tax treatments to cultivate an Asian Dollar Market. This initiative proved instrumental in helping Singapore to develop as a financial centre and maintain a lead over its nearest rival, Hong Kong.

Keeping locals happy

Lee knew that for Singapore to compete with global giants, he needed to provide Singaporeans with housing and employment opportunities that would bring the nation economic stability. To this end, he established the Housing Development Board and Economic Development Board. The housing board transformed this space-constrained island into a world class metropolis that helped its citizens to move out of small ghettos into carefully planned mixed townships and provided superior living conditions for its citizens.

Source: World Bank.

Meanwhile, the development board slowly built up Singaporean industries and businesses to provide job opportunities for both locals and expats. These efforts of the premier saw Singapore’s per capita GDP jump from around US$500 in 1965 by a staggering 2800% to US$14,500 by 1991. Building on Lee’s economic model, it has since continued to grow to US$55,000.

Singapore under Lee also adopted a two-pronged strategy with regards to its financial sector. As well as making Singapore an international financial hub, it wanted the financial sector to play a key supporting role to the growing industries located in Singapore such as manufacturing and shipping.

Lee’s style of running Singapore earned him many accolades. He was once described by Richard Nixon as “A big man on a small stage who in other times and other places, might have attained the world stature of a Churchill, Disraeli or a Gladstone”.

He was a man with a mission to transform a small seaside town into a financial giant. The size of the country’s GDP per capita compared to its tiny size and lack of resources is testament to his success at doing so.

Nafis Alam is an Associate Professor of Finance and Director of the Centre for Islamic Business and Finance Research at the University of Nottingham

This article was originally published on The Conversation. Read the original article.

 
 
 
 

This fun map allows you to see what a nuclear detonation would do to any city on Earth

A 1971 nuclear test at Mururoa atoll. Image: Getty.

In 1984, the BBC broadcast Threads, a documentary-style drama in which a young Sheffield couple rush to get married because of an unplanned pregnancy, but never quite get round to it because half way through the film the Soviets drop a nuclear bomb on Sheffield. Jimmy, we assume, is killed in the blast (he just disappears, never to be seen again); Ruth survives, but dies of old age 10 years later, while still in her early 30s, leaving her daughter to find for herself in a post-apocalyptic wasteland.

It’s horrifying. It’s so horrifying I’ve never seen the whole thing, even though it’s an incredibly good film which is freely available online, because I once watched the 10 minutes from the middle of the film which show the bomb actually going off and it genuinely gave me nightmares for a month.

In my mind, I suppose, I’d always imagined that being nuked would be a reasonably clean way to go – a bright light, a rushing noise and then whatever happened next wasn’t your problem. Threads taught me that maybe I had a rose-tinted view of nuclear holocaust.

Anyway. In the event you’d like to check what a nuke would do to the real Sheffield, the helpful NukeMap website has the answer.

It shows that dropping a bomb of the same size as the one the US used on Hiroshima in 1945 – a relatively diddly 15kt – would probably kill around 76,500 people:

Those within the central yellow and red circles would be likely to die instantly, due to fireball or air pressure. In the green circle, the radiation would kill at least half the population over a period of hours, days or weeks. In the grey, the thing most likely to kill you would be the collapse of your house, thanks to the air blast, while those in the outer, orange circle would most likely to get away with third degree burns.

Other than that, it’d be quite a nice day.

“Little boy”, the bomb dropped on Hiroshima, was tiny, by the standards of the bombs out there in the world today, of course – but don’t worry, because NukeMap lets you try bigger bombs on for size, too.

The largest bomb in the US arsenal at present is the B-83 which, weighing in at 1.2Mt, is about 80 times the size of Little Boy. Detonate that, and the map has to zoom out, quite a lot.

That’s an estimated 303,000 dead, around a quarter of the population of South Yorkshire. Another 400,000 are injured.

The biggest bomb of all in this fictional arsenal is the USSRS’s 100Mt Tsar Bomba, which was designed but never tested. (The smaller 50MT variety was tested in 1951.) Here’s what that would do:

Around 1.5m dead; 4.7m injured. Bloody hell.

We don’t have to stick to Sheffield, of course. Here’s what the same bomb would do to London:

(Near universal fatalities in zones 1 & 2. Widespread death as far as St Albans and Sevenoaks. Third degree burns in Brighton and Milton Keynes. Over 5.9m dead; another 6m injured.)

Everyone in this orange circle is definitely dead.

Or New York:

(More than 8m dead; another 6.7m injured. Fatalities effectively universal in Lower Manhattan, Downtown Brooklyn, Williamsburg, and Hoboken.)

Or, since it’s the biggest city in the world, Tokyo:

(Nearly 14m dead. Another 14.5m injured. By way of comparison, the estimated death toll of the Hiroshima bombing was somewhere between 90,000 and 146,000.)

I’m going to stop there. But if you’re feeling morbid, you can drop a bomb of any size on any area of earth, just to see what happens.


And whatever you do though: do not watch Threads. Just trust me on this.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and also has a Facebook page now for some reason. 

Want more of this stuff? Follow CityMetric on Twitter or Facebook.