Magazine article Foreign Policy

The Secret of Singapore: Why Cuba Should Look to Lee Kuan Yew's Thriving City-State for Economic Inspiration

Magazine article Foreign Policy

The Secret of Singapore: Why Cuba Should Look to Lee Kuan Yew's Thriving City-State for Economic Inspiration

Article excerpt

Sometime in the next few years, the Cuban people will be faced with a huge decision: how to develop their nation. As the Castro brothers fade from the scene and relations with the United States continue to thaw, a new generation of Cuban leaders will be forced to grapple with the inevitable challenges of political and economic reform. Like the governments of Eastern Europe after the fall of the Berlin Wall, they will have to plot a path from communism to capitalism; like their neighbors across Latin America and the Caribbean, they will have to juggle a historical distaste for Western (and particularly U.S.) imperialism with a desire for Western goods, technology, and capital. And like leaders everywhere, they will almost certainly have to strike a balance between the demands of economic prudence and political expedience, forming institutions that will serve their country over the long run while heeding their citizens' call for more immediate change.

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Whoever these new leaders will be and however they will come to power, they will face a panoply of development options and an avalanche of advice. But they would do well, in the early days of their decision-making, to heed the model of another island nation--one dealing with the loss of a legendary leader and that arguably handled its post-colonial development better than any other small country. I'm referring, of course, to Singapore.

Between 1965 and 1991, the tiny city-state grew at an astonishing compound annual growth rate of nearly 14 percent. Critics of the island's performance accused its celebrated leader, Lee Kuan Yew, of thinly veiled tendencies toward communism and authoritarianism; they argued that the country's pace of growth was being artificially inflated by investment rates that would quickly prove impossible to sustain. Yet Lee and Singapore outlived, and outperformed, their detractors. The country maintained strong growth throughout the 1990s, stumbling only slightly during the 1997-1998 Asian economic crisis and achieving levels of per capita income that approached those of the industrialized West. Even in the early years of the 21st century, as Lee slipped from politics, Singapore maintained an average annual growth rate of around 5 percent.

In retrospect, it is easy to attribute Singapore's extraordinary trajectory to luck, or to a hardworking culture, or to Lee's undeniable record of micromanaging his citizens and quashing dissent. But the real reason behind Singapore's success was the country's unique understanding of what it had to offer the world and how to craft a development strategy around an honest appraisal of those assets.

At independence, Singapore was little more than a rock in the sea--a small colonial outpost half the size of modern-day Los Angeles, wedged between Malaysia and Indonesia. It had no natural resources, no industrial infrastructure, and a population split among ethnic groups that shared no true common language. It had a deepwater harbor, however, and a port situated at the southern entrance to the strategically important Strait of Malacca. It was from this port that Lee and his comrades built their nation. They invested all the capital funds they could muster into the port's development. Several years later, they financed repair and refueling facilities that would induce ships to come--and stay.

Singapore's leaders trained a labor force to service both the port and a subsequently constructed airport, leveraging the island's location to become a regional hub for shipping, commerce, and eventually foreign investment. …

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