Singapore: From Third World to First?

The coverage of Singapore under the late Lee Kuan Yew consistently emphasizes a theme of rapid economic development in an inauspicious context, encapsulated by the slogan “From Third World to First.” See e.g. here and here. This goes back to a book with the same name from 2000.

Now, no one should doubt that Lee Kuan Yew was a developmentalist statebuilder par excellence. But Singapore at independence a third-world country? This narrative neglects the incredible legacy of openness, infrastructure, and stability that the British rule left this tiny country.

The graph below says it all. For every year since 1945, I have ranked all independent countries by real per capita GDP, the best measure we have of economic prosperity. I then normalize these to a percentile scale. Here is what we get.

comps

Yes, you have that right: already by the 1970s, Singaporean GDP per capita actually exceeded that of the UK. But the main point to take away from that graph is that Singapore entered the community of independent states as a prosperous country, at least by the standards of the time. That Singapore has progressed tremendously since independence is true, but not a story of turning the “Third World” into the first. If anything, it is a story of how to escape the middle income trap.

The comparison with Malaysia is particularly evocative, recalling that Singapore and Malaysia were the same country until 1965. A quick inspection shows that while the two countries differed in their base level of economic prosperity, relative growth trajectories in the two countries were basically parallel until the mid-2000s, when Malaysia began to decline and Singapore really took off.

sing-v-malaysia

The black lines are Lee Kuan Yew’s term as Prime Minister in Singapore. The dashed line in Malaysia? That’s when Mahathir Mohamad retired.

UPDATE: Interested readers who want to see the data should check out this comment, where I explain where the data come from and how I created the figure.

Posted in Asia, Current Affairs, Economics, Malaysia
17 comments on “Singapore: From Third World to First?
  1. Where on earth are you getting your income data from ? Your per capita GDP chart not consistent with http://www.ggdc.net/maddison/maddison-project/home.htm which show that Singapore in 1965 was roughly par with Brazil or Iran. Not Africa-poor, not as poor as Bangladesh, but definitely poorer than Greece or Portugal and quite many Latin American countries. The idea that by the 1970s Singapore converged with the UK is also quite absurd; that didn’t happen until the early 1990s.

  2. And if your chart merely shows the evolution of ranks in GDP per capita, what is the meaning of “already by the 1970s, Singaporean GDP per capita actually exceeded that of the UK” ?

  3. barusk says:

    Thought experiment: if the most prosperous city of any country were to secede in 1965, how would it fare? The UK hasn’t done great, but London might hold its own.

  4. You don’t like Mahathir, do you? haha

  5. […] today Tom Pepinsky posted a rather curious bit on Singapore’s economic development history. Pepinsky argues that  Singapore was not too […]

  6. johnleemk says:

    Prof. Pepinsky, if I’m reading the chart of real GDP per capita percentiles correctly, then Myanmar overtook Indonesia by this measure some time around 2005ish. But that doesn’t seem to be the case; Indonesia is still well ahead of Myanmar in real GDP per capita: http://en.wikipedia.org/wiki/List_of_Asian_countries_by_GDP

    I’m curious whether my own eyes deceive me, or if not, how we can reconcile the discrepancy between the dataset you used and the more-commonly reported numbers issued by international institutions.

  7. saboje says:

    and you know how he did? he make exempt on tax for rich people to come singapore and migrate. and thus make up 60% more of those early singaporean. in fact the country it’s self does not prosper its own ppl rather to accommodate rich outsider.

  8. tompepinsky says:

    Thanks to all for reading. Here are some answers:

    I used data from the Quality of Government Institute website. Specifically, the “Gleditsch” GDP data. Here is the original source. http://privatewww.essex.ac.uk/~ksg/exptradegdp.html

    In fact, you can recreate my analysis in Stata with just the following code

    use “http://www.qogdata.pol.gu.se/data/qog_bas_ts_jan15.dta”, clear

    bysort year: egen rankgdp = rank(gle_rgdpc)
    by year, sort: egen number_nonmissing = count(gle_rgdpc)
    gen pctile = (100*rank)/number_nonmissing

    twoway (tsline pctile if cname==”Singapore”,lwidth(thick)) ///
    (tsline pctile if cname ==”Malaysia (1966-)”) ///
    (tsline pctile if cname ==”Myanmar”) ///
    (tsline pctile if cname ==”Indonesia”) ///
    (tsline pctile if cname ==”China”) ///
    (tsline pctile if cname ==”United Kingdom”) ///
    (tsline pctile if cname ==”United States”), ///
    legend(off) scheme(s1color) ///
    ttext(0 1945 “Myanmar”) ttext(8 1945 “China”) ttext(20 1945 “Indonesia”) ttext(60 1960 “Malaysia”) ttext(75 1960 “Singapore”) ///
    ttext(85 1945 “UK”) ttext(95 1945 “USA”) ///
    ytitle(“Real GDP Per Capita (Percentile)”) xtitle(“Year”)

    I chose this one indicator literally because it was the easiest one to get. But I wish now that I had chosen a different one, like PWT or Maddison or WDI, because those are better known “standard” datasets.

  9. I think it’s absurd to say that because Singapore’s ranking in 1965 was near the median, its trajectory to the present has been from middle income to high income rather than from 3rd to 1st world. The distance actually travelled by Singapore in terms of unconditional convergence is from ~20% of US GDPpc to almost parity. The spread of GDP per capita is much wider today than in 1965, and what is “middle income” today is considerably richer than what was “middle income” in 1965. Singapore in 1965 was as distant from the technological frontier (the USA) as many countries at the bottom quartile in 2010. (My guess, I’m posting from my mobile.)

    More concretely, Singapore’s GDP per capita in 1965 was roughly equivalent to that of Pakistan, Mozambique, or Cambodia in 2010; and less than that of Bolivia, El Salvador, the Philippines, or Kyrgyzstan in 2010.

  10. A more valid mitigation for Singapore’s growth trajectory is that it’s a city-state, not something really comparable with full-sized countries. Cities, especially port cities, have higher levels of per capita income than whole countries which include hinterlands. That also helps explain why Singapore was near the middle of the rankings in 1965.

  11. Edvard Chan says:

    Tom, I believe that the term ‘Third World’ by the late Lee Kuan Yew also meant the mindset or readiness of the population at that time. There were many campaigns to make the Singapore society more gracious and less uncouth. Your analysis may say that Singapore were ‘first world’ but the way the population in general carried themselves in those days were way below ‘First World’. Singapore as an independent country back then had to grapple with many issues as well… Infrastructure, Housing, National Security, Education, Population Growth, Foreign Investments and Healthcare amongst others. Most of these were in their infancy and I do not feel it is accurate to define such a backdrop as Prosperous. I find it misleading.

  12. […] last post comparing Singapore’s growth trajectory to the narrative of Singapore as a “Third […]

  13. […] Tom Pepinsky points out that Singapore’s per capita GDP was already fairly high at independence.  In his words, […]

  14. Laser Mark says:

    3 month in Singapore early 1973. Very refined expat life in a definitely 3rd world country. Beginning with old airport and night life at Bugis Street (miss that).
    Also lots of,poor kompong vilages with house on stilts.

    Lee’s accomplishment are amazing. Even then his edict for opening sidewalks around trees, or draining standing water from every potted plant , or his tax on car engines based upon cc’s, all yielded large scale,immediate and positive results within weeks.
    Been back a dozen times over the decades. Like walking int the future. Yes it was,Disneyland under martial law. And it,has become a miracle

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