This speck on the map leapt from poverty to First World riches in a generation. Now its halcyon years of breakneck growth may be over.
Ask none other than Lee Kuan Yew, the authoritarian statesman who oversaw Singapore’s transformation from a malarial outpost of the British Empire to a modern city-state churning out hard-drives, medicines and deepwater oil rigs for export.
Premier from 1959 to 1990, he squashed dissent and steered the tropical island into embracing globalization. It reaped the economic benefits, becoming the world’s fourth-richest country as Western consumers sent global trade soaring.
Now Singapore’s top customers — the U.S., Japan and Europe — are mired in the biggest global slump since World War II and may take years to recover their normal growth.
Lee, currently an adviser to his son, prime minister Lee Hsien Loong, acknowledges it’s improbable that China along with other Asian nations can pick up the slack. It will take “decades” for Asians to shake off their traditional caution and tendency to save rather than spend, he says.
“We’ll have to wait for the American economy,” he said.
As a result, the Southeast Asian city-state is reeling from its deepest recession since splitting from a short-lived federation with neighboring Malaysia in 1965. The International Monetary Fund forecasts GDP to shrink 10 percent in 2009, the most of any major Asian economy.