How does Singapore make money

economy - Singapore: from a pirate's nest to an economic model state

Around 500 people work on behalf of the government for the Singapore Economic Development Board (EDB). From his office on the 24th floor, Managing Director Keat Chuan Yeoh looks out over the whole of Singapore. A fundamental problem becomes apparent: Singapore has run out of space. 5.5 million people live in a good 700 square kilometers. The city-state can no longer expand in breadth.

"In Singapore we encourage people to look up and down," said EDB managing director Yeoh. Most build upwards, but there are other examples: "To support our chemical industry, we built a rock cave 150 meters below sea level." According to Yeoh, it is the world's first such cave for liquid hydrocarbons. “The government invested $ 1 billion in this. It has space for 8 million barrels of oil. "

A master plan every ten years

Although Singapore itself has no raw materials, the island nation has developed into a chemical and refinery location. There is always a master plan behind such developments: Every ten years on average, the EDB defines an economic sector that is to be promoted. Then the procedure is always the same: Experts from all over the world are flown in, conferences are organized, corporations are attracted. The government is investing billions in this.

At the beginning of 2000, for example, the decision was made to turn Singapore into a research location. This plan was also implemented consistently, several building complexes were erected. Almost all major international pharmaceutical companies now operate research institutes in Singapore.

The EDB was also concerned about having enough specialist staff: To convince young people to study science, generous scholarships were awarded: "Each of them worth a million dollars," says Keat Chuan Yeoh. «We supported the students for ten years, from the beginning to their doctorate. In total, we invested a billion dollars and trained 1,000 doctoral students in research. "

Soon every twentieth millionaire

One advantage of Singapore is its location on the Strait of Malacca, the main sea trade route. This is how the port developed into one of the largest in the world. The port used to be known as a transshipment point for drugs and prostitutes, Singapore itself was a pirate's nest. But that is long gone, and in Singapore you only look ahead as a matter of principle.

It remains to be seen how long Singapore can go on like this. The city-state is also struggling with problems: the same party has been in power for 50 years, and initial voices criticize the lack of democracy.

And the gap between rich and poor is growing: every tenth person earns less than 1,000 US dollars, on the other hand every thirty-fifth is a millionaire, in two years it could be every twentieth. In addition to economic development, Singapore will also have to deal with social tensions in the future.

Asean countries: comparison of GDP per capita (adjusted for purchasing power)



IMF, 2014
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