Lessons from the Lion City

In 1984, Singapore's GDP per capita - the economic output divided by population number - sat at around $NZ12,000, roughly comparable to New Zealand's at the time. Today, Singapore's GDP per capita is more than $136,000, making it one of the wealthiest nations on earth. Meanwhile New Zealand sits at $81,000. That difference, accumulated over four decades, is not accidental. It is the outcome of some deliberate policy choices made in the service of Singapore’s vision of its future self.

From Trading Post to Economic Powerhouse

Singapore in December 1941, shortly before the arrival of Japanese Forces.

Singapore's transformation is one of the most remarkable in modern economic history. When Lee Kuan Yew's government began laying the foundations of modern Singapore in the 1960s and '70s, the city-state had no natural resources, a small domestic market, and a population of only around two million people.

As the Singaporean leader once put it :” A nation is great not by its size alone. It is the will, the cohesion, the stamina, the discipline of its people and the quality of their leaders which ensure it an honourable place in history.”

In the early 1970s, targeted foreign investments in sectors like electronics and petroleum created enough jobs to erase long-standing unemployment, shifting the country from an era of labour surplus to one of labour shortage. To keep Singapore attractive the government implemented wage hikes and introduced tax incentives to push industries toward higher technology and automation.

By the 1980s, those basic foundations were bearing fruit. It was a specific two-pronged approach : attract foreign investment, and educate the workforce with the appropriate skills.

Between 1984 and 2024, Singapore's economy grew at an average annual rate of around 6-7%, transforming the nation from a manufacturing and trading hub into a global centre for finance, logistics, tech and medical research. Per capita income in terms of purchasing power now compares with Switzerland and the United States, and life expectancy has risen to 84 years, amongst the highest in the world.

The city maintains and builds world-class infrastructure, has low crime stats, and a highly educated workforce, many with significant experience overseas. The latest oinfrastructure project is the impressive North-South Corridor, a 21.5 kilometre multi-use tunnel connecting the northern regions to the city centre.

Singapore's new North-South Corridor , currently under construction / image supplied

New Zealand, by contrast, has struggled with persistent productivity challenges, a brain drain to Australia and elsewhere, chronic housing unaffordability, and an economy still heavily reliant on primary commodities. How did this occur and what can we learn?

Investing in People

Singapore has made education a national obsession. The government consistently invests in world-class schooling, technical training, and university research, producing a workforce that competes in global industries. Crucially, it did not simply fund education, it aligned the education system with its economic strategy, building skills in engineering, finance, and the sciences that helped push the economy in the desired direction.

New Zealand has world class universities and a well-educated population, with more than 30% of adults holding a bachelor’s degree or higher. But an increasing number of  skilled New Zealanders continue to leave for Australia, the UK, or elsewhere, taking their productivity with them. Singapore addressed this not only by training talent, but by making the country so attractive : through salaries, infrastructure, and quality of life, that it has now become a net importer of global talent rather than an exporter.

Singapore is Pro-Biz

Singapore consistently ranks at or near the top of global indices for ease of doing business and levels of corruption. Corporate tax rates are competitive, bureaucracy is streamlined, albeit at times painfully restrictive, and contracts are enforced – unlike in NZ, where contract law seems impotent in the face of infrastructure projects that just run endlessly over-budget, and where "good faith" is often not recognised in law.

When New Zealand does build infrastructure, the final bill is usually some distance from the initial quotes. due to a systemic underestimation of costs often involving successive governments looking for positive electoral announcements., but leaving the hard yards to the next lot in the Beehive.

The Singapore government understands that as an island state, you need to be attractive to business and open to entrepreneurship. The mechanics of starting your own company are now even taught in schools here.

Cargo ships in the Singapore Strait

New Zealand ranks reasonably well on some of these metrics but has a regulatory complexity that many see as a drag on productivity. The Resource Management Act has been widely cited as a structural impediment to growth, and while reforms have been discussed for years, change has been slow. Singapore would not abide the consenting delays that are routine in New Zealand's building sector for example.

But, on the other hand, it’s not the Wild West. Singapore’s Environmental Protection and Management Act (EPMA) serves as the backbone of Singapore's environmental protection, strictly regulating air, water, and land pollution, as well as hazardous substances. Its Carbon Pricing Act requires major emitters to pay for their greenhouse gas emissions. These and other environmental guidelines are managed by the Singapore Green Plan 2030.

 Disciplined Long-Term Planning

Perhaps Singapore's most underappreciated quality is its willingness to plan and invest for the long term, even at short-term cost. The government built the Mass Rapid Transit system when the city could barely afford it. It invested in Changi Airport infrastructure well before passenger volumes demanded it. It developed the Jurong Island chemical plant through a long process of land reclamation and investment. The results of those investments are now part of the Lion City’s quality of life for its 6.1 million residents.

New Zealand has historically struggled to maintain this kind of long-term infrastructure focus, as governments change and priorities waver. New Zealand’s housing supply has lagged behind population growth for a generation, and major projects are frequently delayed, redesigned, or cancelled. The ill-fated Auckland Light Rail project springs to mind as just one recent example.

Singapore's government, insulated from short-term political pressures by its electoral structure, has been able to pursue a consistency of vision that parliamentary democracies like New Zealand can find difficult to achieve.

Singapore’s Restrictive System

But Singapore is by no means a perfect model. Its political system concentrates power in ways that sit somewhat uncomfortably with New Zealand's democratic values. The ruling People’s Action Party (PAP) is often accused of overseeing a system that blocks the formation of opposition parties. The country also lacks an independent Elections Commission, with the Elections Department sitting under the Prime Minister’s office. The PM also oversees electoral boundary changes and other regulations. Lastly, election campaign periods are less that a fortnight, with many potential opposition parties unable to mobilise effectively.

Singapore Prime Minister Lawrence Wong

Singapore’s income inequality, while lower than previously, also remains a domestic concern. If measured by international standards - such as households earning below 50% of the median household income, an estimated 20% of households in Singapore are in relative poverty. Singapore also has a significant informal labour market, with people working “under the table” in all sorts of positions. Estimates suggest that 10-14% of Singaporeans are suffering from severe financial problems.

The core lessons here - invest seriously in human capital, reduce friction for productive enterprise, and plan infrastructure for the long term rather than the next election,  are available to any government willing to apply them. New Zealand has every advantage: stable institutions, a well-educated population, strong rule of law, and an enviable geographic position in a corner of the Asia-Pacific region. The question is whether it will choose to use them with the same deliberate ambition that turned a tiny, resource-poor island into one of the world's most prosperous nations.

The Lion City's lesson is not that New Zealand must somehow become an Antipodean  Singapore. It is that economic outcomes, over time, are a political choice informed by a vision of prosperity.

Asia Media Centre