It’s rare to hear businessmen thumping the table and demanding greater economic uncertainty, but on 18 March listeners to the Today Programme were treated to exactly that. “When Singapore became independent from Malaysia, that little insecurity that they were no longer part of Malaysia, it was an inspiration” said Peter Hargreaves, a prominent financier. “I honestly think that would be good for us too.”
Hargreaves’s invocation of Singapore has been picked up in several papers. But it is hard to see the relevance of a country that broke away from Malaysia 51 years ago, at a time when it was far poorer than the UK today. In constant 2005 dollars, Singapore’s GDP per person was about $2,900, compared with just over $16,000 in the UK today.
Singapore grew impressively after independence, but its performance owed much to advantages that a post-Brexit UK would lack. Being a poor country, Singapore could copy other countries’ technology. Not being fully democratic, it could radically change policies in a way that Britain probably could not. A post-Brexit Britain is unlikely to axe farm subsidies or regulation in pursuit of Singapore-style growth.
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Mr. Hargreaves might like to consider another fact of Singapore’s history. It wasn’t just the break with Malaysia that caused Singapore’s insecurity, driving policymakers to go for growth. The UK decided in 1967 to close its military bases on the island. Losing an industry employing 16% of the workforce, and accounting for up to 20% of GDP, no doubt encouraged Singapore’s leaders to embrace radical reform.
Edited by Sebastian Mallaby
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