In 1965, when the Cold War was at its most intense, a tiny island south of the Malay Peninsula declared its independence. After more than a century as a British colony, and having suffered the brutal Japanese occupation during World War II, the Republic of Singapore took its first sovereign steps. Thus began one of the most significant success stories of the 20th century. A case that, in light of the recent approval of the free trade agreement between Mercosur and Singapore, is worth paying attention to.
According to official data, in just over sixty years, Singapore's GDP per capita rose from $1,300 to $141,000, the second highest in the world. Life expectancy increased from 67 to 84 years. Currently, the unemployment rate is almost nonexistent, and 90% of its residents are homeowners. Today, Singapore ranks 9th in the world on the Human Development Index, with a score of 0.949[1]. In summary, numbers that are hard to comprehend in a country like ours, which is struggling to emerge from a long decline.
The question inevitably arises: How did this nation of just 640 square kilometers, with no natural resources and surrounded by significantly more powerful nations, achieve such a feat? The answer has a name and surname: Lee Kuan Yew.
In 1959, at the age of 35, he became Singapore's first Prime Minister when the Empire granted the island a greater degree of autonomy as a precursor to emancipation. He quickly got to work, knowing he inherited control of a nation mired in poverty and that the British intended to leave them to their fate in a hostile world.
In 1960, he created the Housing and Development Board to replace the millions of precarious homes that made up the slums of the port city with apartment buildings. This was soon complemented by a key measure that allowed workers to use their accumulated savings from the Central Provident Fund (a mandatory retirement insurance established earlier by colonial authorities) to cover 20% of the down payment for a home, and pay the remaining mortgage balance in monthly installments over 20 years.
It is worth noting that, unlike pension systems like the Argentine one, where current active workers pay the pensions of retired workers, the CPF consists of an individual account made up of contributions from both the employee and the employer. That is, each worker accumulates capital during their working years that generates interest over time, until retirement when they can access their savings. This aims to “avoid shifting the burden of the current generation's welfare costs to the next generation,” as the leader expressed in his autobiography[2].
Another of his successes was the creation of the Economic Development Board in 1961, dedicated to attracting foreign direct investment concentrated in specific sectors such as ship dismantling and repair, metallurgical engineering, chemicals, and electrical equipment and appliances. They offered, among other things, tax exemptions and minimal bureaucracy. Their agents worked tirelessly, as if the survival of the nation depended on them, reaching out to companies worldwide to convince them to invest in Singapore. This is comparable to the goal of President Milei's RIGI, which seeks to boost investments in vital sectors for our country's infrastructure and balance of payments.
Sometimes, it took forty or fifty calls to arrange a visit. Once a potential investor landed, the government did everything possible to make a good first impression, to the point of “ensuring that the roads from the airport to their hotel and to my office were clean and well-kept, lined with shrubs and trees,” according to LKY himself. In this way, without saying a word, foreign visitors would know that Singaporeans were competent, disciplined, and trustworthy.
On the other hand, there is no development and stability without the full rule of law. In this regard, Singapore immediately adopted a pragmatic yet firm stance in combating crime, starting from a strong skepticism regarding the theory, so popularized in this hemisphere, that the criminal is a victim of society.
Their provisions, which include the death penalty for drug traffickers and corporal punishment through caning for certain offenses, have not been without controversy. Their “tough on crime” methodology has drawn protests from numerous international human rights organizations, such as Amnesty International, to which LKY always responded firmly: “I only care about how I am judged by the people I govern.”
In addition, there is a fundamental understanding of the role that human capital plays in the development of a country. Singapore had no oil, fertile land, or minerals. LKY understood this quickly: the only asset was its people, and thanks to that understanding, he made a controversial decision: to impose English as the working language over Mandarin, Malay, and Tamil, because he understood that connecting to the world was more important than linguistic identity. Investment in education was massive, and a meritocratic system was implemented that filtered and enhanced talent regardless of ethnic origin or social class. Today, Singapore leads international education rankings.
