Maintaining Singapore’s Miracle

In a single generation, Singapore has leapt from dire poverty to become one of the richest countries on earth. This month Singapore has a new prime minister – only the third in its history. Can the miracle continue? 1 / Very Low / 0 – 10 percent 2 / Low / 10 – 25 percent 3 / Moderate / 25 – 35 percent 4 / High / 35 – 45 percent 5 / Very High / 45 percent or more – The Heritage Foundation’s scale for rating the severity of government intervention in the economy, based on the percentage of national output produced by state-owned firms. The idea of state ownership triggers an almost physical revulsion in some economists. Each year the conservative Heritage Foundation releases their Index of Economic Freedom, invariably accompanied by research showing that countries with highly interventionist governments suffer dire economic consequences. Of course, they can do this only by fiddling the data for Singapore. This was most pronounced in 2001. By the Heritage Foundation’s own scale, the country should have rated a five – “very high” intervention. As much as 60 percent of Singapore’s national output, Heritage noted, came from partially state-owned companies. Instead, Heritage scored Singapore at three – “moderate intervention.” Which was at least more realistic than the year before, when they rated the country, bizarrely, at two – “low intervention.” But forgive the Heritage analysts a bit of ideologically-induced blindness. Singapore is a spectacular outlier. In 1959 it was a swamp plagued by tuberculosis and race riots and dotted by slums. Today it is richer than much of Europe. Not only...