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Why is Singapore so rich? | CNBC Explains

Why is Singapore so rich? | CNBC Explains


Singapore is a tiny country, so tiny you can
drive across the island in just an hour. Despite its size and lack of natural resources,
Singapore’s 5.6 million people enjoy one of the highest average incomes in the world,
ahead of countries like Germany, France and Japan. So, how did this little
island get so rich? Singapore doesn’t have resources like coal or oil but it
does have something countries can’t buy, location. The island sits in the middle of an important
trade route connecting Asia to Europe. That’s a key reason why the British decided,
back in 1819, to set up a colony in Singapore. Location isn’t everything though. There are several countries nearby that
could have made use of their whereabouts, but they weren’t quite
as successful. That’s because there are other ingredients
that go into this crazy rich Singapore recipe. I’m at the Raffles Hotel, which is one of the most
prominent icons of Singapore’s colonial history. Unlike some of its neighbors, which wanted to
separate themselves from their colonial histories, Singapore kept close ties with Britain,
even after independence in 1965. That decision announced to the rest of the
world that Singapore was open for business. That’s important because we know now that
exports help to grow and expand an economy. But back then, it wasn’t
conventional wisdom. Singapore, Hong Kong, Taiwan and South Korea,
became known as the four Asian tigers, which have grown rapidly
since the 1960s. Their rise was fueled by exports, industrialization and
more crucially, big doses of government intervention. This was especially
true for Singapore. Labor strikes were common on the island in
the 1960s, even with high unemployment. On top of that, there
was a housing crisis, with Singapore being home to one of the
largest slum settlements in the world. So how do you build a more disciplined
labor force to attract investment? Well, you give them something to
work for, like a house of their own, which is why one of the first Singapore
government agencies set up was focused on building
affordable public housing. While just nine percent of the population
lived in public housing in the 1960s, that figure stands at more
than 80 percent today, add in greater employer rights and
strikes became extremely rare. At the same time, the government attracted
foreign investment through tax incentives, growing the economy
and easing unemployment, which fell from an estimated 14 percent
in 1959 to 4.5 percent in the 1970s. By the 1980s, Singapore was
a regional manufacturing hub, and it was the world’s biggest
producer of hard disk drives. But today, manufacturing makes up only
about 20 percent of Singapore’s GDP. Take a look at Singapore’s growth in GDP. You can see two big surges, one beginning in the late
80s and another at the start of the new millennium. Ironically, Singapore has a
downturn to thank for that. You see, in 1985, Singapore went into
its first post-independence recession, prompting the government
to introduce new measures. State-owned companies like telecommunications
were privatized to make them more competitive. Then at the turn of the century, service industries
like finance and insurance were further liberalized. That openness helped to grow the share of
services from just 24 percent of GDP in 1985 to more than 70 percent in 2017. Multinational companies began to set
up regional headquarters in Singapore. That attracted even bigger players, boosting Singapore’s
attractiveness to corporates and in turn its GDP. Now, Singapore is ranked as one of the
world’s easiest places to do business. Singapore has been praised for transforming
itself from a developing to a developed economy. But do most Singaporeans feel rich? Well, not exactly. Two of the most
important reasons? The high cost of living and inequality. For five years in a row, Singapore has been
named the world’s most expensive city, ahead of New York
and London. That’s largely because of taxes on cars, making
Singapore the most expensive place in the world to buy and run
an automobile. It’s also the third most expensive
place on Earth to buy clothes. But personal care, household goods
and domestic help in Singapore tend to be less expensive
than in other major cities. While Singapore is rich in terms of GDP per
capita, the median monthly salary is $3,270. That doesn’t sound too bad, but about 20 percent
of that goes into a mandatory savings account. You can use that account to pay for
medical bills, housing and education, but it does restrict the purchasing
power of the population. You’ve probably heard of the movie Crazy
Rich Asians, which was set here in Singapore. And it’s no wonder. Because Singapore has about 184,000 millionaires,
making it truly the land of the crazy rich. That’s great news. But Singapore also has a fairly high rate of inequality,
compared with other developed countries. Let’s look at the Gini coefficient, which
is a scale used to calculate inequality, with zero being the most
equal and one being the least. Singapore’s Gini coefficient, after accounting
for taxes and transfers, was 0.356 in 2017. That was worse than countries like the
United Kingdom, Japan, Korea and Germany, although it fared better than
some, like the United States. Is that number really that bad? That question had books
like this flying off the shelves. A think tank ignited public debate on the divide
in social classes, after it found that on average, Singaporeans who live in public housing have fewer
than one friend who lives in private housing. The government has called the issue
of inequality a national priority, but it remains to be seen if it is a
problem that can be tackled effectively. Hi everyone, it’s Xin En.
Thanks for watching! If you want to watch more of
our videos, click here and here. As always feel free to leave any suggestions
for future videos in our comments section. That’s all for now, don’t forget to
subscribe and see you next time.

100 comments on “Why is Singapore so rich? | CNBC Explains

  1. I worked in Singapore for 3 years, stress level is too high people around are always worry the cost of living & the only true happiness that people get is when they travel outside Singapore. My experience in Singapore open my eyes to go back in my country get a farmland and start a farming business, I don't want my life to be in a rat race again & flat inside this rich countries. Now, I'm very satisfied & happy living a simple life in my poor country.

  2. They have a high gdp/capita, meanwhile they have no democracy, corrupt leaders, no labour rights, limited freedom of expression. They are only 34 in the happiness index, behind democratic western countries. They even allow caning for some crimes. Give me Europe or Taiwan any time over this backwards place.

  3. One of the most developed countries in the world.
    The urban development perfection can blow your mind.
    Nice food and nightlife as well as great shopping experience even at the airport.
    A perfect 10/10 and a great place to settle a secondary house as a millionaire.

  4. Oh well come from the host that singapore doesnt have resources, its money come from companies and if u dont know yet singapore is a tax heaven. Like luxemburg, neatherlands, british virgin islands, panama etc. Its not a magic!

  5. Country and govt rich doesn’t mean the overall population is rich or well off. But do remember, the origin of handling the population is not to make them rich but to tackle from the angle of handling the majority of the population from foreign labors point of view.. which may have its effect till today..

  6. If u are sick or on unpaid leave for 2 or 3 days a month, you are done for… unless you are the rich minority…Singaporeans may look rich.. but in truth u cannot survive without work… nothing belongs to u..literally nothing

  7. Singapore is a beautiful city. I have been here this summer. I made a video about Singapore if you want to come to have a look! 🙂

  8. Singapore is so rich but its people are so poor. I don't envy Singapore's economic status because a lot of its people are not happy and are under pressure for its cost of living.

  9. Singaporeans think they have the best education in the world and are more educated than the rest in Asia. But how come there's a lot of foreigners working in that tiny State as the majority of companies in that City State say Singaporeans are unemployable. Singaporeans are saying that foreigners are taking the jobs for lower wages Singaporeans are refusing to take.

  10. Singaporean aren't really rich because of the high cost of living. But because the government is rich, they are able to provide subsidies in all forms easing the burden on its people.. Housing might not be cheap but because of good policies in place people can choose to pay for their house in a span of 20 years while living in it and finally owning the house.vAlso Singapore government gives all students a fair chance to succeed through education. You can actually see the difference between the low income and the rest of Singapore. Many middle income families were poor in the beginning but moved up due to education so it's relatively fair in that sense.

  11. Is that real @ 6:10 ???
    Buildings are literally stacked on one after the other.
    What is the name of that place or buildings?

  12. Dont be a dumbass and put some thoughts into your video title…Who the hell ever calls a country rich?? And if its citizens are rich then you wont see Singaporeans working in Mcdonalds and old folks cleaning & clearing tables in coffeeshops or have you even been or read up about the real Singapore before making this this retarded video?

  13. A lot believe systems were passed down to Singapore sands, economics. Engineering and News. Started Islam spread of help of Economics growth Intelligence Petronas company hubs 74 1979 summer 83.

  14. it is time for you to make a video, Why rich country the majority is very depressed and sucide is very high ? and pharma company is very rich ?

  15. singapore are so rich cos u dont find any umno and pas there.and they dont have all those race and religion and bangsa keturunan .. this are the good point…

  16. Singapore is nothing more than a place for ex-colonials white to have a place for business in Asia since the lease of Hong Kong is expired.

  17. Thank you for the video. Clarified a lot of misconceptions portrayed in the movie Crazy Rich Asian… foreigners think that all Singaporeans are crazy rich because of that movie haha

  18. Dan Singapore bukan apa apa tanpa Indonesia, sebagian besar isi pasien rumah sakitnya adalah orang Indonesia, sebagian besar apartment yg mereka bangun orang Indonesia yang beli . Begitu kpk mau ngecek uang koruptor di singapura mereka pada protes . So

  19. Rich but no WATER…
    I go to toilet no water..need To BO..pass motion…unlucky no water…i have to hold back…n go to hospital 1 hour after then i can passed motion…terrible…rich but no water…i dont want to stay there…hahahahahha

  20. Why is Singapore so rich? Because everyone one else is jealous that’s why! So shut the fûk up you liberals. I’m jk don’t kill me..

  21. I mean, they do have good public healthcare and education. plus they have a roof above their head.
    public housing.

    what is the point of fighting "inequality"? inequality is not important. poverty is.
    as long as you aren't homeless and you have healthcare and the food is cheap, the rest isn't important.

    cars might be expensive but that's a good thing. Singapore is small. use a train, public transportation or a bicycle. done.

  22. CNBC what a joke leftist media, always say something bad about the US even the US have ton of great things, but only say something good about other countries

  23. Been to Singapore twice and still want to go back there. Who know's job vacancies in Singapore? Let me know.

  24. Wtf is this article on about. This stats are so inflated. A local university grad earns around 3.2-3.6k SGD. mind u that’s a TOP 10 uni in the world. That’s barely 2.6k USD.

    In Switzerland you can easily earn 6-8k francs as a degree holder in a relevant field with a decent university degree.

    Singapore is rich because it’s a business hub that’s all. The money earned is not generated to the income of citizens. It’s all foreign expats and businessmen due to the laws attracting businesses hereS in truth the locals here are not well off. We struggle every year and Everyday I wonder where is my work life balance. Why am I still here

  25. The per capita wealth of Singapore will decline, as it develops into Malaysia. This is a good thing because Singapore could not possibly defend itself from millions of scam artists and corporate raiders.

  26. Buddha would tell Singapore to break those many worldly attachments. Singapore may then reach a world standard of living, after selfishness and greed have been vanquished.

  27. PH has left the chat
    PH can't accept they're stupid and blame everything but their own stupidity.

    Mabuhay! 🇵🇭🖖😁😂

  28. Unnecessary strict rule. It will progress on its own because it's majority Chinese. 🙄 (like Macau, Hong Kong, Taiwan.) Congratulations, Singaporeans. You've been lied to your whole lives. 😂🇸🇬

  29. Hang on, what does Singapore do with the drunks, drug addicts, layabouts, and people who refuse to work? If a 17 year old flunks out of school, hangs out on the street all night, gets drunk, starts fights, shoplifts, and won't work, where does he go? Do they jail him? Encourage him to leave? If New York City could ship all the bums to Venezuela, I bet the city would be a great place for business.

  30. Singapore is that OPM that spends most of their monarch points on internal development and tech advancement, allowing them to control the trade node and focusing on playing tall instead of blobbing

  31. Singapore is a good place there politics is fold with engineer and scientists that’s why you see them produce all kind of machines and they invested. They are natural producers.

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