Singapore is often cited by many governments around the world as an ideal economic and nation building model. A tiny city-state of 5 with virtually no natural resources sandwiched between large countries, that has managed to successfully capitalize on its excellent location and mould itself into not only a formidable regional business hub, but into one of Asia’s original four tiger economies (high growth economies, following the Japanese model), together with South Korea, Taiwan and Hong Kong.
Many publications have attempted to analyze her success, explaining its high growth economic model, and how quickly it joined the ranks of developed nations. Among the many, the one book that probably sums it best is from Singapore’s Founding Father, Lee Kuan Yew in his book “From Third World to First: The Singapore Story (1965 – 2000)”. This translates to roughly three decades, a journey that started with Singapore’s independence and separation from Malayan Peninsula in 1965, mainly through exports, and its transport, finance, trade, tourism, and commercial hub. All the while, investing heavily in infrastructure, security, education, and public housing, and securing its place as an Asian Tiger as early as the 1980s.
Little wonder that Singapore today has garnered many superlatives. Ranking as among the world’s highest home ownership per capita, second only to Japan in highest per capita income in Asia, home to the world’s 2nd busiest Container Terminal after Shanghai, and has given the world one of the most recognizable brands in the sky, Singapore Airlines (which also happens to be the world’s most profitable).
For all its success, Singapore does have its critics though, a business-friendly government that rules with an iron fist, where there are fines and strict regulations for everything from jaywalking, urinating in elevators, all the way to the banning of chewing gum.
Naysayers aside, Singapore is a model of “the perfect student in the classroom” of sorts, everything works, the country is safe, corruption is virtually non-existent, and the city-state looks more like Switzerland, with its spotlessly clean streets and public parks, where public transport runs like clockwork. Indeed, Singapore has the last laugh. And for those that believe its citizens are too robotic to chill out and have some fun, Singapore has for the past few years shifted its attention to content building, bringing in the Arts and Entertainment. One only needs to look at her impressive skyline that is today dotted with Asia’s largest Casino Hotel outside Macau, and a giant Ferris Wheel, the Singapore Flyer.
So… what about all the foreign governments that visit Singapore to study its recipe for success? Well one of them seemingly is Panama, a country all the way across the Pacific, in Central America. A recent story in The Economist entitled “A Singapore for Central America?” is pointing out that it’s fast positioning itself as the Singapore of Latin America. Here’s the story in full.
On a humid stretch of Pacific coast in one of the poorest parts of the Americas, somebody seems to have misplaced a chunk of Manhattan. The 50-storey skyscrapers of Panama City jut out of the jungle like nowhere else in low-rise Central America. Panama’s smart banks, open economy and long queues of boats at its ports have caused many to compare it to Singapore, another steamy success story. Panama’s president, Ricardo Martinelli, made his country’s first state visit there in 2010 and later said, “We copy a lot from Singapore and we need to copy more.”
Panama is not even one-fifth as rich as its Asian model on a per-person basis. But Singapore would envy its growth: from 2005 to 2010 its economy expanded by more than 8% a year, the fastest rate in the Americas. The IMF expects it to grow by over 6% a year during the next five years. Panama will soon overtake Costa Rica and Venezuela in GDP per head. Accounting for purchasing power, it is one of the five richest countries in mainland Latin America.
An 80km (50-mile) channel of water has played a big part. In 2010 the Panama Canal’s revenues were $2 billion (7.5% of GDP). This year they are up by a quarter, thanks to more traffic and higher tolls. The canal and Panama’s business-friendly regulations have spawned big insurance, finance and legal industries and endowed Panama with the world’s biggest merchant navy, at least on paper. A free-trade zone in Colón, at the canal’s Atlantic end, has lured the regional bases of firms like Procter & Gamble. Last year Colón and Balboa, Panama’s Pacific gateway, became Latin America’s two busiest ports.
Inspiration: “A Singapore for Central America?”, The Economist