Executive Summary
The first chapter of the dissertation removes Singapore’s saving performance from
its pedestal as an outlier in economic history, with the reputation of being hardly
transferable and possibly not even desirable. Instead, the results of the
benchmarking exercise clearly show the transferability of at least the saving aspects
of Singapore’s economic history. Moreover, the particular econometric approach
applied highlights those circumstances, which are not directly related to saving
policies but must be taken into consideration if transferability is assessed,
particularly the demographic structure and external position.
The exercise shows that Singapore’s saving performance between 1965-99 was far
from extraordinary once the country’s circumstances are controlled for, even though
a mere comparison of averages of saving rates across countries would have us
believe differently. Given Singapore’s purely non-policy environment, it could have
been expected of the country to achieve at least world average saving levels,
substantially higher than its savings at time of independence. Above world average
levels could have been expected if we also take into consideration the country’s very
successful external situation. Finally, if we also allow for potential peer-group
mechanisms by placing Singapore within a group of successful Asian countries, the
average benchmark saving ratio comes very close to the country’s actual saving rate.
What is indeed extraordinary about Singapore’s saving performance, is not the high
saving rates in the late 1980s and 1990s, which usually attract the most attention, but
rather the speed of transformation of the country’s saving behaviour in the first half
of the period, when Singapore was able to overcome its initial low saving
performance much faster and much more strongly than could have been expected
given her circumstances. The key to understanding Singapore’s saving behaviour
must lie in the turnaround achieved during the first decade of the country’s
independence. Therefore, looking merely at the country’s more recent saving
Executive SummaryThe first chapter of the dissertation removes Singapore’s saving performance fromits pedestal as an outlier in economic history, with the reputation of being hardlytransferable and possibly not even desirable. Instead, the results of thebenchmarking exercise clearly show the transferability of at least the saving aspectsof Singapore’s economic history. Moreover, the particular econometric approachapplied highlights those circumstances, which are not directly related to savingpolicies but must be taken into consideration if transferability is assessed,particularly the demographic structure and external position.The exercise shows that Singapore’s saving performance between 1965-99 was farfrom extraordinary once the country’s circumstances are controlled for, even thougha mere comparison of averages of saving rates across countries would have usbelieve differently. Given Singapore’s purely non-policy environment, it could havebeen expected of the country to achieve at least world average saving levels,substantially higher than its savings at time of independence. Above world averagelevels could have been expected if we also take into consideration the country’s verysuccessful external situation. Finally, if we also allow for potential peer-groupmechanisms by placing Singapore within a group of successful Asian countries, theaverage benchmark saving ratio comes very close to the country’s actual saving rate.What is indeed extraordinary about Singapore’s saving performance, is not the highsaving rates in the late 1980s and 1990s, which usually attract the most attention, butrather the speed of transformation of the country’s saving behaviour in the first halfof the period, when Singapore was able to overcome its initial low savingperformance much faster and much more strongly than could have been expectedgiven her circumstances. The key to understanding Singapore’s saving behaviourmust lie in the turnaround achieved during the first decade of the country’sindependence. Therefore, looking merely at the country’s more recent saving
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