How Singapore Became One Of The Richest Places On Earth

RACHEL MARTIN, HOST:

Despite heavy rains, tens of thousands of people lined the streets of Singapore today to say goodbye to the country's founding prime minister, Lee Kuan Yew. Lee was one of the most influential leaders of the last 100 years. He was also an autocrat who used his country's libel laws to silence dissent. His opponents were jailed without trial for years. That said, he transformed the city-state from a malaria-infested swamp into a shiny metropolis. Under Lee's rule Singapore became one of the least corrupt and the richest places on earth and a model for the rest of Asia. NPR's Jim Zarroli reports.

JIM ZARROLI, BYLINE: Singapore has been called the 20th century's most successful development story. Linda Lim is an economist who teaches at the University of Michigan.

LINDA LIM: I don't think any other economy, even other Asian tigers, have that good a statistical record of rapid growth, full employment with very good social indicators - life expectancy, education, housing, et. cetera - in the first 20 years.

ZARROLI: Singapore had little land and no natural resources. But after its independence in 1965, the former British trading port was transformed into a major manufacturing and financial center. The late conservative economist Milton Friedman said on PBS that Singapore showed how to do development right.

MILTON FRIEDMAN: If you compare the conditions of people in a place like Singapore with the conditions of people in a place like Red China or, for that matter, in Indonesia, you will see that the economic freedom is a very important component of total freedom.

ZARROLI: Conservatives saw Singapore as a free-market success story with low taxes, few capital restrictions and liberal immigration policies that made it one of the most cosmopolitan places on earth.

JOSH KURLANTZICK: They have very, very free trade, very low tariffs, very few nontariff barriers. So in that way, it's a very open economy. And they'll boast about how you can start up you own company in Singapore in, like, three hours or something like that.

ZARROLI: That's Josh Kurlantzick of the Council on Foreign Relations. But, like Deng Xiaoping's China, which emulated many of Singapore's policies, Lee's government played a big role in the economy.

KURLANTZICK: Some of the biggest sectors domestically - shipbuilding, electronics, banking, and now they're very involved in private banking - got their start because Lee Kuan Yew and the government specifically directed State Farm into those areas.

ZARROLI: The government also provided social services such as housing and health care in a way a liberal economists applaud it. Linda Lim, who grew up in Singapore, says this brought a certain amount of social peace. She says these policies were designed by Lee's cabinet, but Lee provided the leadership that made them possible.

LIM: He understood the politics of this very diverse place and put together the laws, including the labor laws, that created a stable, peaceful place that multinationals were looking for.

ZARROLI: Lee himself believes Singapore's growth was tied to the shared values of its different ethnic and religious groups.

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PRIME MINISTER LEE KUAN YEW: We have had, since 1965, an undivided society, solidly behind a meritocratic system, pushing for higher standards of education, higher standards of performance and meritocratic at every level.

ZARROLI: Singapore today is a mature economy that, like Japan, has seen its growth slow. It's had to compete with other low-wage countries that sometimes emulated its economic policies. Kurlantzick says today it struggles with a problem familiar to the West.

KURLANTZICK: People live well but the per capita GDP conceals a high level of inequality. So that is definitely a major issue in Singapore today and one of the things that the current Prime Minister has focused on.

ZARROLI: But Singapore remains a big financial center with a high standard of living. And Lee Kuan Yew is remembered as the man who made its prosperity possible. Jim Zarroli, NPR News.

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