My recent trip back to Singapore reacquainted me with the people, the urbanism, and the acute tropical heat that I call home. But, having lived in London, it also occurred to me that, furious sweating aside, Singapore is not so different. The two cities are similar enough, perhaps, that Singapore has now become a model for a post-Brexit UK to consider – specifically, a low tax, low regulation haven. This what some have termed, ‘a Singapore-on-Thames’.
Though the idea of the UK emulating one of its former colonies is almost facetiously ironic, it is likely implausible. Though there are some useful takeaways, from the Singaporean model, I do not think that the vision of the most optimistic Brexiteers is realistic.
Same, But Different
Granted, the similarities between Singapore and the UK make such a suggestion unsurprising. The political, judicial and educational systems of Singapore are of British origin. We both promote the same broad form of economic liberalism. Both countries are developed economies that act as regional transportation and investment hubs. But the similarities seem to end there.
The UK has nearly 12 times the population of Singapore. Though manufacturing is a significant industry for both countries, it is twice as significant in Singapore. Singapore is the world’s second-largest port, while the biggest port in the UK, Felixstowe, ranks 35th. Singapore’s total trade is 3 times its GDP, but UK’s is half of its own. While government expenditure in Singapore is nearly half that of the UK, Singapore ranks higher on scores of public service quality, international competitiveness, maths and science teaching, PISA scores, and on effectiveness of regulation. A post-Brexit UK would have to close these gaps if it can hope to imitate Singapore’s economy. That is easier said than done.
Cutting taxes seems impossible, if only because of the EU’s repeated opposition to such policies. Given that the UK’s inclusion in any regional trade deals post-Brexit is predicated on the EU’s attitude, slashing taxes would be unwise. And such a policy could lead to falling tax revenue that would destabilise the UK’s welfare system and NHS.
There is also the matter of priorities. Much of Singapore’s productivity driven growth comes from its hefty educational investment, which accounts for around 20% of public spending, nearly double the proportion for the UK. Singapore also works hard to attract foreign talent to drive its economy-40% of the population is foreign-born. Proposing higher levels of immigration for the UK, at least for now, is tantamount to political suicide, according to some populist narratives.
Finally, Singapaore’s geopolitical endowments are nothing short of a miracle. In a region of less developed and stable countries, the city-state stands out as a beacon of political and economic integrity which has successfully attracted many multinational corporations. Though the UK fulfils a similar role at times, it is hardly as indispensable.
To be sure, a post-Brexit UK can still aspire towards the same openness and adaptability that has allowed Singapore to succeed, but only if it manages its departure well and invests in its future and people. For Singapore, people have been the greatest resource – for the UK they might be the brightest hope.