By adapting elements of the Singapore model to their own contexts, CEE countries can achieve sustainable development, foster inclusive growth, and improve the well-being of their citizens.
The story of Singapore’s remarkable transformation from a small, resource-poor island into a global economic powerhouse offers valuable lessons for countries around the world.
In a few words, the key to Singapore’s success lies in a combination of visionary leadership, sound governance, strategic planning, and a strong commitment to innovation and openness. But it is also worth taking a more in depth look at these contributing factors to understand what drives Singapore’s success and what Central and Eastern Europe (CEE) and the world can learn from it.
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Singapore’s strategic position at the crossroads of major shipping routes in Southeast Asia has been instrumental in its economic success. By leveraging this location, Singapore has become a vital hub for trade and commerce, facilitating the flow of goods, services, and capital between Asia and the rest of the world.
This strategic advantage has been complemented by the most stable and efficient government worldwide, as of 2023, known for its long-term planning, pragmatic policies, and zero tolerance for corruption. The government’s proactive approach in driving economic development, urban planning, and social policies has ensured steady progress and stability.
Investment in people
Embracing free-market principles, open trade policies, and a business-friendly environment has also been crucial for Singapore becoming the freest economy in the world in the last few years, 2024 not being an exception.
In an age of turbo-globalisation, the establishment of free trade agreements with numerous countries has allowed for easy access to international markets and attracted significant foreign investment.
Recognising its people as its greatest asset, Singapore has heavily invested in education and talent development. The education system, known for its high standards, focuses on skills relevant to the global economy, producing a highly skilled and competitive workforce. These actions resulted in Singaporean residents seeing their median income rise by 43 per cent in the last two decades—a huge difference if compared with the United States where the same measurements shows a modest eight per cent rise.
Investment in world-class infrastructure, including transportation networks, ports, telecommunications, and utilities, has supported economic activity, enhanced connectivity, and improved the quality of life for residents.
This comprehensive infrastructure development is thus a cornerstone of Singapore’s growth and no slowing down is seen on the horizon. For example, this spring a new Digital Infrastructure Act was announced in order to further enhance the resilience and security of digital infrastructure and services.
Technology & Innovation
Additionally, a strong emphasis on innovation and technology adoption drives Singapore’s economic growth. The establishment of research institutes, technology parks, and incentives for research and development has positioned Singapore at the forefront of technological advancements through its RIE (Research, Innovation and Enterprise) five-year plans. RIE 2025’s budget, the third such cycle, has totalled around 25 billion US dollars per year, equal to one per cent of Singapore’s GDP and is proof of the sustained long-term commitment to R&D.
By diversifying its economy beyond traditional sectors like shipping and manufacturing to include finance, technology, biotechnology, tourism and many others as stated by the Singaporean Economic Development Board, Singapore has reduced its reliance on any single industry.
This diversification enhances resilience to economic shocks. Despite its diverse population, Singapore has managed to foster social cohesion and harmony through inclusive policies, respect for diversity, and efforts to promote a national identity. This social stability is essential for sustained economic development.
Renowned for its efficient urban planning, Singapore has transformed from a congested city with slums into a modern metropolis with more than 40 per cent of land area covered in green spaces, high-quality housing, and efficient public transportation. This proactive approach has significantly improved living standards.
Furthermore, Singapore has demonstrated remarkable adaptability and resilience in the face of challenges, such as economic downturns, geopolitical uncertainties, and public health crises. The ability to quickly adjust policies and strategies has enabled Singapore to navigate crises and emerge stronger.
Lessons to be learnt
The lessons from Singapore’s development model are applicable, to various degrees, to CEE and globally. CEE nations have their own success story based on Euro-Atlantic integration, but at a time when updated models and new ideas could come in handy, Singapore could provide some inspiration.
These nations can learn from Singapore’s pragmatic decision-making, which focuses on practical, data-driven solutions rather than strict adherence to ideology. This flexibility allows for effective policy implementation and adaptation to changing circumstances. Emphasising long-term vision and planning, as seen in Singapore’s urban development and education reform, helps mitigate future challenges and sustain growth.
This approach is potentially beneficial for CEE countries seeking sustainable development in a way that mitigates distributional consequences.
Prioritising meritocracy and investing in education ensures a skilled workforce capable of driving innovation and economic progress. Central and Eastern European countries can replicate this by institutionally rewarding individuals based on abilities and effort, thus limiting one of the drivers of the brain-drain that has characterised CEE’s trajectory in the past two decades.
Leveraging partnerships between the public and private sectors drives economic development and infrastructure projects. Collaboration fosters innovation and efficiency, a strategy other nations can easily adopt, especially in CEE, where better management of public resources is much needed.
Embracing diversity and promoting social cohesion can lead to a stronger and more resilient society. Singapore’s success in managing a diverse population offers valuable insights for other countries, especially in CEE, where migration will slowly but surely become a reality. Commitment to open markets, free trade, and business-friendly policies attracts foreign investment and becomes a boost for economic growth. Maintaining a stable and transparent regulatory environment is crucial for business confidence.
Clean government
Staying ahead in the global technological race requires investment in research and development, promoting entrepreneurship, and embracing emerging technologies. This is essential for global competitiveness. Transparency, accountability, and a strong rule of law build trust in institutions and foster investor confidence. Singapore’s efficient and clean government serves as a model in this regard, particularly in a region that has struggled so much with corruption and rule of law issues.
Providing comprehensive social welfare programmes and affordable housing ensures a decent standard of living and addresses income inequality. Singapore’s approach can guide other nations in this area, as the model of a small state exposes its limits and housing affordability becomes an increasing concern for the youth.
Balancing economic development with environmental preservation is crucial for long-term prosperity. Singapore’s initiatives in water conservation, waste management, and green technology adoption offer valuable lessons to CEE leaders who are more concerned with short-term green backlash.
By adapting elements of the Singapore model to their own contexts, CEE countries can achieve sustainable development, foster inclusive growth, and improve the well-being of their citizens.
While each country has unique challenges, the principles underlying Singapore’s success can provide a roadmap for transformation. CEE is at a time in its evolution where it can allow itself some experimentation, so why not look at the best examples?
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