Shortly after the 2016 EU referendum, I visited Singapore to meet-up with clients and colleagues in my role as Brexit policy manager for a large US-headquartered global financial services firm. I offered to deliver a briefing for the local team and was greeted with a response that was to become remarkably familiar as I visited other office locations in Indo-Pacific and the Americas. Incredulity is the best word to describe their viewpoint, which was driven by two factors: very slanted local media reporting and a lack of understanding about what the EU is (and wants to be).
I’m a typical Tory – meaning I’m a long-term Eurosceptic. We joined an economic community but were being increasingly drawn into a political superstate. I’m a free marketeer who wants global trade to flourish. A rising tide really does lift all boats! Where I’m less typical, I suppose, is that while I’m no fan of the Customs Union I am very much in favour of the Single Market.
My experience of dealing with Brussels over many years of working on financial services regulation led me to believe the UK would be better off out the EU. When you see how the sausages are made you can’t help but think about becoming a vegetarian … Despite this, I was surprised by the result and very apprehensive about how the exit process would work. (It turned out to be worse than I thought, however that’s for another day.)
Back to Singapore. Anticipating their puzzlement about why the UK had gone mad, I did some homework on the astonishing success of its economy. When Singapore separated from Malaysia in 1965 it was a very undeveloped country. Its population was estimated to be 50% illiterate, malaria was rife and its GDP per capita was only US$516. It has almost no natural resources – it must import water and sand from its near neighbours. So, going it alone was a very brave move indeed.
However, by 2018 Singapore’s GDP per capita had reached US$87k – higher than the US. For comparison, Ghana – another former British colony – took its GDP per-head from US$974 in 1970 to a meagre US$2,200 in 2018. This is despite being richly endowed in natural resources: its colonial name was The Gold Coast! The decision by the UK to leave the EU was, by comparison, a more modest change.
So, why do many people seem to think that using Singapore as a model is a bad idea? The concept appears to be that Singapore is a low-regulation country. This is a misconception. My experience, based on dealing with financial regulators, is that Singaporean regulators and policy-makers do not fit any sort of stereotype. They do not have any hesitation to do what is appropriate for their market and they have a very business-orientated approach.
A key part of any policy is that it should enable growth. Conversations with regulators very often revolve around what you are not allowed to do. In Singapore, it’s all about encouraging you to do more – and to do it in Singapore. This isn’t de-regulation. Singapore now has many advantages: low taxes, stable politics, a robust legal system and zero tolerance of corruption. And alongside these: a strong regulatory system is also a cornerstone; it attracts business.
The phrase ‘Singapore-on-Thames’ appears to have been coined by the media with its origins in the fears and prejudices of politicians in the EU. The UK won’t become another Singapore, however that doesn’t mean we can’t learn from its success. I hope we do.
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