The Heritage Foundation, a leading US conservative think-tank, touts Singapore as one of the world's two freest economies, but that's just a myth. In fact, Singapore is the world's most successful socialist state.
More than 80 percent of Singapore's population lives in public housing, sheltered from the harsh realities of the government-controlled property market. While Singapore has the trappings of a democracy, the ruling People's Action Party is living proof that the one-party state survives outside the dustbin of history. Rather than the sharp-elbowed unabashed capitalism of Wall Street, Singapore's economic philosophy more closely mirrors that of another tropical island with a signature rum cocktail: Cuba.
Temasek is Exhibit A in Singapore's blatant, and largely profitable, government intervention in the economy. Buying a computer? Temasek owns 70 percent of Chartered Semiconductor. Chatting on the phone? Temasek owns 67 percent of Singapore Telecom. Taking a vacation? Temasek owns 57 percent of Singapore Airlines.
Singapore has increased spending on public transport and reduced the number of new car licenses to rein in auto sales and curb pollution and congestion as the booming economy boosts the buying power of the country’s residents. Last year, Prime Minister Lee Hsien Loong promised to spend S$60 billion over 10 years to double the size of the subway network.
“High customer disposable incomes” are spurring demand for cars in Singapore, said Vivek Vaidya, automotive and transportation director at researcher Frost & Sullivan. The reduction in permits “is bound to put the prices in upward spiral.”
Taxing Licenses
Car buyers in Singapore must pay for excise and registration duties of about 150 percent of the vehicle’s market value, as well as bid for a limited number of government permits, called certificates of entitlement, that allow a car on the road for 10 years. The cost of a permit alone would now buy a new Porsche Boxster in the U.S., or a C-Class Mercedes in Hong Kong, where curbside pollution rose to a record last year.
Singapore posted 14.5 percent economic growth last year, based on the government’s revised figures today, swelling the ranks of the city’s millionaires by 35 percent. The country has the highest proportion of millionaire households at 11.4 percent, according to the Boston Consulting Group. On top of that, the population has grown 23 percent in the past decade, adding to congestion in a country about the size of Chicago.
The government today kept its forecast for the economy to grow 4 percent to 6 percent in 2011, even as there’s “some upside potential” to the target.
The protection guaranteed by the British, which failed spectacularly in World War 2, could no longer be relied upon since Her Majesty’s forces were withdrawing by 1971. The conventional narrative that follows is the People’s Action Party under the headstrong Prime Minister Lee Kwan Yew laid the foundations for a national armed forces.
With the help of advisers from Israel, the Singapore Armed Forces (SAF) used mandatory conscription called National Service to maintain a sizable standing army with the best equipment money could buy. This mindset is still apparent today and as a result the Republic of Singapore possesses the most advanced military in the region.
Each year, more than 3% of GDP goes to a robust defense budget. In 2013 it reached $9.9 billion, rising to above $10 billion the following year. By 2020 Singapore could be spending up to $15 billion on its armed forces, placing it within the global top 20 for defense spending.
In typical Singaporean fashion, foresight, efficiency, and a broad awareness of potential risks made the SAF a world-class institution. The Singapore model for developing a national armed forces and a domestic arms industry is worth emulating.
