Singapore provides a viable economic strategy to embrace if Wales wants to pursue independence.
On Thursday, January 17, 2024, the Independent Commission on the Constitutional Future of Wales released its highly anticipated report, delineating three prospective models for the future governance of the nation: enhanced devolution, a federal structure, and independence.
The Commission refrained from advocating a specific option for Wales but rather outlined the strengths and weaknesses, risks and opportunities inherent with each alternative. The report has sparked extensive debate among politicians and the wider public regarding the future of governance of Wales. Particularly, discussions on independence have focused on a central point: the economic ramifications of such a course.
Discussions on Welsh independence often draw comparisons with the Republic of Ireland, particularly in the context of economic performance. Since becoming a free state in 1922, Ireland has witnessed remarkable economic growth, establishing itself as one of the most prosperous countries in terms of GDP per capita. Nonetheless, the trajectory of our Celtic neighbour’s economic prosperity was marked by a prolonged journey.
A pertinent but occasionally overlooked example for the economic potential of an independent Wales is Singapore, a nation with a population of 5.5. million.
In the early 1930s, the Irish economy grappled with the aftermath of the War of Independence and the subsequent civil war. During this period, Éamon de Valera, serving as Taoiseach, implemented economic policies aimed at rapid job creation and the gradual development of an indigenous industrial sector, primarily catering to the domestic market. However, the adoption of protectionist measures and adherence to party ideological stances resulted in a decline in economic activity.
It took more than six decades for the “Celtic Tiger” to emerge with a gigantic roar. It wasn’t until the mid-1990s that the Irish economy experienced a transformative upswing. This occurred when Ireland embraced an international perspective and seized opportunities for collaboration with the global community.
Instances of the economic trajectories of newly independent countries can be seen throughout history and are observable worldwide. A pertinent but occasionally overlooked example for the economic potential of an independent Wales is Singapore, a nation with a population of 5.5. million.
Upon achieving sovereignty in 1965, few expected it to survive let alone prosper. This initial sentiment was captured by Singapore’s inaugural Prime Minister, Mr. Lee Kuan Yew, who said in 1957 that the idea of an independent Singapore was a ‘political, economic, and geographical absurdity’. It is not difficult to understand why this view was taken. The country had no natural resources, no hinterland, and was dependent on the outside world not just for food and energy, but even water. Moreover, industrial friction was common, contributing to an unemployment rate of nearly 9%. The pursuit of independence, therefore, entailed significant challenges and potential economic losses.
The traumatic birth of independence compelled the government to make two pivotal strategic decisions: a departure from import-substitution in favour of export-led industrialization, and a concerted effort to attract global multinational corporations as an instrumental vehicle for achieving industrial growth. These two decisions proved to be among the most important in the country’s economic history.
During the initial two decades of Singapore’s independence, a foundation was laid for robust economic fundamentals, characterised by prudent public finances, sound monetary policies, cooperative industrial relations, outward orientation, and market-based strategies. At the outset, Singapore’s GDP per capita was on par with that of Mexico and South Africa. However, the dividends of its strategic economic approach started becoming apparent by 1990, as Singapore’s GDP per capita surpassed that of South Korea, Israel, and Portugal. By 2015 it had caught up with Germany and the United States.
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The twin strategies of prioritising exports and actively courting foreign direct investments at a time when few other countries were doing the same gave Singapore a decisive advantage. But it was an advantage that the country had to work hard to realise. Among other initiatives, the government developed industrial land, put in place infrastructure, reformed labour laws, and invested in basic education with emphasis on technical skills relevant to industrialisation.
There are many lessons Wales can learn from Singapore, a country that secured independence from its larger and more powerful neighbour. Singapore’s success is attributable, in part, to its strategic endeavours in promoting knowledge creation and cultivating skills conducive to the demands of a knowledge-based economy, enabling it to maintain competitiveness in an interconnected global landscape. A critical determinant of success in the knowledge-based economy is the continuous generation and acquisition of knowledge by the workforce. Emulating Singapore’s economic achievements would require concrete efforts in Wales to build and deepen skills at all levels across the country. This would entail facilitating access to education through both conventional on-campus learning as well as distance learning, ensuring that the new knowledge is not only confined to those in education but also workers already in employment.
Singapore’s continuous restructuring and resilience, driven by innovation and social cohesion, provide lessons for Wales in fostering economic growth and adapting to challenges it currently faces.
However, the contribution of an educated workforce to Singapore’s success is part of the story. The country is a story of continuous restructuring that is driven by its culture of innovation, resilience and cohesion. Today, Singapore boasts a highly productive and engaged workforce with profound skills, consistently adapting to new technologies, which is underpinned by its culture. Singapore faced and overcame numerous challenges, including those arising from globalisation, technological advancements, population ageing, and climate change. Its strength has not been to insulate itself from crisis but to bounce back from them, stronger and more resolute. This has only been achieved because its citizens have worked together and stayed together, with those who have done well doing their part for the less fortunate. This is not only about a willingness to pay higher taxes to support an ageing population but reflects the spirit of volunteerism – that prevailing tendency to help one another – that has become ingrained in Singapore’s society, forming the foundation of deeper social cohesion that binds the country together. According to the National Volunteer & Philanthropy Centre (NVPC) one in every five Singaporeans volunteered in 2021, although this was down from the peak seen in 2016 of 35%. The Welsh Government can adopt a similar approach by prioritising social cohesion, and formulating effective policies and funding initiatives to better support community needs.
The example of Singapore, a nation with a population of 5.5 million, showcases the transformative power of strategic economic decisions made during a journey from independence. Singapore’s continuous restructuring and resilience, driven by innovation and social cohesion, provide lessons for Wales in fostering economic growth and adapting to challenges it currently faces.
Many of the economic strategies implemented by Singapore and the Republic of Ireland can be adopted by the Welsh Government given the current governance of the country. If Wales is to pursue one of the three options proposed by the Independent Commission it will need to be open and outwards looking, with a workforce ready to take advantage of the opportunities the world has to offer. In addition to investing in education at all levels, including both traditional and distance learning, the emphasis on citizen collaboration and volunteerism as essential components of economic success suggests an approach for Wales to emulate in its pursuit of prosperity, regardless of the Independent Commission’s options it decides to pursue.
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