04 April 2017

Financial Times: Singapore is not quite what Brexiteers think it is

[...] Many things the Brexiters think they admire about Singapore also turn out to be only half-true. Singapore is indeed a competitive market economy with relatively low tax and a threadbare social safety net. But rather than a model of laissez-faire capitalism, its state is actually highly interventionist, from its famous chewing-gum ban to wide-ranging public ownership of everything from banks to airlines.

Its success as a financial hub, meanwhile, is based not only on openness to capital and goods, but also people. Extraordinarily high immigration has seen the island’s population double in 30 years. Today, not far off a third of its 5.8m people are foreigners, from Filipino nannies and Bangladeshi builders to Japanese bankers. The government has tightened migration rules recently, but still expects to add 1m to its population by 2030 — hardly a policy migration-averse Brexit backers would want to copy. [...]

For all the undoubted successes of its economic development, Singapore is still a small country surrounded by much larger neighbours. From Malaysia to the north and Indonesia to the south, not to mention regional powers such as China and India, its leaders have learnt to cope with the special vulnerability that comes from never being able to dictate terms. [...] those in Britain looking east for inspiration might once again find a more anxious role model than they care to admit.

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