Why Singapore Became A Financial Center In The Far East
Singapore is one of the smallest countries in the world, with an area of only 710.2 square kilometers. This country was still a British colony until the middle of the 20th century. In 1951, it gained the status of a self-governing country in the British Empire. In 1963, the city-state became part of Malaysia, but it seceded and became independent in August 1965.
Before becoming a modern and financial center, Singapore, as a poor third world country, had no obvious economic advantages and large reserves of natural resources. Even this country needs to import fresh water from Malaysia. Most people live in slums and are illiterate. This country is full of corruption, drug trafficking and piracy.
How did that country achieve these results in a short time? Singapore’s modernization is ensured through efforts in the four core areas of economic reform, social modernization, effective fight against corruption and political stability, which guarantee investment and innovative development.
Eradicate corruption
Today, Singapore has one of the lowest levels of corruption in the world. But in the 1950s, public bribery was a tradition of local authorities. The new government has set the task of eradicating corruption, which has nothing to do with personal relations. The country has established a special anti-corruption country that reports directly to the Prime Minister. The staff of the Bureau have extensive authority to detain and search corruption suspects. Not only cabinet members, but also the Prime Minister’s relatives have become the targets of anti-corruption investigations. As a result, some senior officials ended up in prison, while some were still serving their sentences. Many corrupt officials have fled the country.
When the Prime Minister’s good friend was convicted of corruption, Li Kuanyu, a modern Singaporean architect, may have sent him to prison.
Simplifying supervision and improving the prestige of civil servants has become another area of anti-corruption struggle. The authority of officials has been specified in detail, and some prohibitions and restrictions have been formulated for them, making the decision-making process more simple and transparent.
The salaries of judges and civil servants have been raised. As a result, the annual salary of Singaporean judges has reached hundreds of thousands of dollars(more than one million dollars in the 1990s). The salary of civil servants in charge has risen to a level similar to that of senior executives of private companies.
Today, officials are regularly interviewed about corruption traps. They systematically accepted suggestions on ways to avoid involvement in unexpected corruption schemes. Officials were warned to take responsibility under the Corruption Prevention Act. The staff of the Bureau regularly teach college students about the dangers of corruption, both to themselves and to the whole society.
Officials prohibit people who do business with them from accepting money or any other form of gift. Nor did they receive invitations to make government employees dependent. If the official cannot refuse the gift, he or she can accept it, but must immediately forward it to the department head. An official can receive a gift only if he pays the gift in advance according to the price set by the department’s accounting department.
Simple and transparent business conditions
The government relies on attracting foreign investors, developing financial markets and high-tech industries. Singapore adopts simple and transparent procedures to register and manage enterprises. The city country became the first country in Asia to create favorable conditions for foreign companies, which began to open branches in the country. A simple and transparent low tax rate tax system has been established. To avoid double taxation, Singapore immediately signed about 70 agreements with foreign countries.
While simplifying the business environment, the urban national government has implemented consistent industrial policies, in which the government’s leverage has played an important role. The authorities first allocate sectors, and after investing in these sectors, these sectors have reached a certain level of development. For example, locomotives promote the development of the whole economy.
In the 1970s, a new priority field, electronic industry, emerged. In this field, the believers can replace one of the world leaders. The development of this industry has not only created high paying jobs, but also deployed the latest technology for Singaporean enterprises.
In the 1980s, the information technology plan was adopted. Under the framework of the plan, the national institutions achieved comprehensive computerization and promoted the development of the computer industry, but the government’s order was destroyed. This has also accelerated the computerization of private companies, bringing additional impetus to the computer industry. Singapore is now one of the countries with the highest level of computerization.
At the end of the 20th century, the government identified new priorities for the development of drugs and biotechnology.
At present, the country is continuing to implement the business preference scheme. Therefore, dozens of preferential loan plans have been formulated for small and medium-sized enterprises to help the country recruit talents and compensate up to 90% of the training and retraining costs. Foreign high-tech companies investing in R&D can enjoy tax exemption for 10 years.
Social modernization
In the process of national modernization, the most important role is the reform of the educational system from the 1960s to the 1970s. Minimum educational standards binding on all schools have been established. Among other things, teaching many subjects in English learning and English is mandatory. While investing in educating Singaporean students in the world’s top universities, the government has established leading research and education centers in the country.
Another important social dimension is successful housing and community reform. The state has tendered to buy apartments owned by citizens rather than renting houses. Over 90% of Singaporeans have moved to government supported apartments since independence 40 years ago.
The central provident fund has become a key tool for housing reform. Every working Singaporean has a special personal account. He must transfer 20% of his salary to this account. The employer must transfer the same amount to the account. These funds are paid at bank interest and are not taxed.
The huge scale of the government’s housing plan has made the construction industry a powerful engine for Singapore’s economic development. As private companies use the experience of multi-storey residential construction to develop hotel ownership, the city country began a hotel boom. Therefore, Singapore can easily receive 6 million tourists every year. This is twice the population of the country.
conclusion
The success of Asian urban countries is first and foremost interesting. Because it is obtained without obvious advantages and is ensured by very appropriate national policies. However, one measure that many policymakers do not know is to give priority to industrial support, simplify procedures, improve business conditions and eradicate corruption. Most of them have been used many times around the world. Obviously, success is not guaranteed by unique measures, but by the wise use of highly active experts.
