The city feels almost impossible to keep in order on humid evenings by the Singapore River. Ships carrying cargo move silently and efficiently toward the port. Late into the night, office towers are illuminated. The sidewalks are sufficiently clean that the lack of trash is apparent on its own. It’s difficult to ignore the feeling that something out of the ordinary occurred here, something much more intentional than the term “miracle” implies.
When Singapore broke away from Malaysia in 1965, things appeared dire. The island’s natural resources were nearly nonexistent, the unemployment rate was in the double digits, and a sizable portion of the city was made up of cramped slums. Economic stagnation or even collapse was predicted by many foreign observers. Rather, Singapore’s economy became one of the richest in the world in a matter of decades.
However, the explanation that is frequently offered in Western business schools—about entrepreneurial dynamism and open markets—only partially explains the situation.
A small group of leaders, led by Lee Kuan Yew, was responsible for a large portion of Singapore’s rise. Economic policy was rarely viewed as an ideological experiment by his administration. It resembled survival planning more. Particularly in the beginning, there was a belief that failure was not really an option.
What had once been mangrove swamps started to give way to factories. Once written off by critics as “Goh’s folly,” Jurong gradually grew in number of manufacturing facilities. By providing tax breaks and ready-built industrial zones, the government actively courted foreign corporations such as Texas Instruments, Shell, and Hewlett-Packard through organizations like the Economic Development Board. Something out of the ordinary caught the attention of investors. Calls were promptly answered by bureaucrats. The rules were unambiguous. There was no need for bribes.
Because corruption was viewed as a political threat rather than a moral irritant, Singapore’s civil service became one of the cleanest in the world. Officials received comparatively large salaries, and when corruption cases did arise, they were prosecuted quickly and in public. As this happened, international investors gradually came to the conclusion that Singapore might be among the safest Asian locations for capital deployment.
