What will it take for India to be a First World Economy?

When you analyze the last 60 years of the economic miracles of Singapore, South Korea and Malaysia versus the continued impoverished Indian economy, you get very interesting lessons. Can Indians have the wherewithal in them to do in one generation so that the coming generations may rise?

What will it take for India to be a First World Economy?
“When you have eliminated all which is impossible, then whatever remains, however improbable, must be the truth.” ― Arthur Conan Doyle, The Case-Book of Sherlock Holmes


Government, any government is a game in power dynamics.

Some like to pretend that an oligarchy is a democracy. Like it has been in most of the Western countries including the US. A power controlled by a few (called "Managerial Class" by Vivek Ramaswamy) no matter who 'runs' the government.

Others have dictatorial regimes that have spectacularly transformed the society for the continued good of every person in the country.

Some monarchies have gone ahead to provide for unprecedented wealth for every citizen.

In the end, it is all a game of power.

Whether lobbyists dictate the politicians or chaebols rule the reigns or governments work with the industrialists, all moral rhetoric is just that - rhetoric.

What really matters is life.

Are we facilitating that for the masses or are we holding them hostage to the greed of a few?

We will use the case studies of Singapore, South Korea and Malaysia to understand the path forward for India.

Are we ready for a ruthless self-introspection?

I am in India and therefore, my writing will be difficult at times. Will keep you all posted on the future newsletters until I am back in normal format.

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Singapore: From a squalid slum to a first-world society

In 1960, Singapore faced a severe housing crisis, with approximately 75 percent of its 1.6 million population living in squatter settlements. These areas were characterized by overcrowded and unsafe living conditions, lacking basic amenities such as sanitation, utilities, and healthcare. The city was also divided into ethnic enclaves and ghettos, which contributed to frequent communal riots and social disharmony.

Singapore had attempted public housing as a project in 1930s with the establishment of Singapore Improvement Trust (SIT) under the Singapore Improvement Ordinance in 1927.

Source: Public housing in Singapore / National Library Board, Singapore

Very interestingly, it was inspired by similar organizations in India.

However, the SIT did not succeed as much. To improve things, The Housing and Development Board (HDB) was created in Singapore on February 1, 1960. It was established to address the severe housing shortage and improve the living conditions of Singapore's population.

Liu Thai Ker was a newly minted architect with a Master's degree in City Planning from Yale University. He was working in the New York office of the architect I.M. Pei.

“After four years, I felt that America really did not need me, they had way too many architects,” he said. “So I started thinking about coming back.” He returned in 1969, accepting a job as head of the design and research unit at Singapore’s Housing and Development Board. One of his main jobs was to create “new towns,” or planned urban centers, for Singapore, even though no could explain how that would look. So he had to figure it out. With some research, he decided the new Singapore would include highly self-sufficient neighborhoods with schools, shops, outdoor food stalls and playgrounds. (Source: "The Architect Who Made Singapore’s Public Housing the Envy of the World" / New York Times)

Typical apartments in the US and Europe were dark and dingy living quarters with a central corridor running through and two of them facing each other. There was little light and it reeked of poverty in a certain way.

Liu wanted to do something different.

He wanted to ensure that people had a sense of community and not be strangers. On the advice of the sociologists, he went about ensuring 6-8 households per one corridor. Social interactions had to be encouraged.

Singapore’s first prime minister, Lee Kuan Yew gave Liu a gigantic target - resettle everyone in slums by 1982.

Every Singaporean was living in a home by 1985.

Most of them were and still are in the HDB flats. Some of the Singaporeans also live in private homes and landed houses. Those are extremely expensive though.

Source: Key Statistics / Housing and Development Board

By 2023, the HDB flats have sold for over $1 million.

Singaporeans have two main types of housing to choose from — public housing, most commonly referred to as Housing Development Board (HDB) flats, and private property. Most condos and landed houses are forms of private property. As the cost of living continues to soar on the back of inflationary pressure, property prices are on the rise, too. In 2023, 470 HDB flats were resold for over $1 million, which was another record-breaking year. When it comes to private housing, only the cheapest condos are priced at under $1 million. (Source: Average House Price in Singapore: HDB, Condo & Landed (2024) / Smartwealth)

The disparity between the HDB and private condos is quite high now.

(Source: Average House Price in Singapore: HDB, Condo & Landed (2024) / Smartwealth)

But all this did not come easy.

It required acts, laws, and steps that created the basis for a Singapore that was free of tin slum squatters and transformed into a first-world urban wonder.

One of them was what at that time was called a draconian law. The Land Acquisition Act (LAA) of 1966. It gave sweeping powers to the government and the impact it had on private landowners was thought to be devastating.

The Land Acquisition Act (LAA) of 1966 played a crucial role in facilitating the clearance of squatter areas in Singapore. Here are the specific ways in which the LAA contributed to this process:

  1. Legal Authority for Land Acquisition: The LAA granted the government the legal framework to compulsorily acquire private land for public purposes. This was essential for clearing squatter settlements and making land available for public housing and other infrastructure projects. (Source: Compulsory Acquisition of Land in Singapore / Singapore Academy of Law Journal - downloadable PDF)
  2. Compensation Framework: The Act provided a compensation mechanism for landowners, although initially, the compensation was below market value. This allowed the government to acquire land at a lower cost, which was crucial for large-scale public housing projects. (Source: "Land Acquisition Act Impact on Singapore Hadrami Wealth" / Journal or Public Administration - downloadable PDF)
  3. Resettlement Policies: Alongside the LAA, the government implemented resettlement policies to relocate squatters. Informal dwellers, such as short-term tenants or squatters, were given ex gratia compensation and resettled into newly built public housing estates. This helped in systematically clearing squatter areas and providing better living conditions for the displaced residents. (Source: Urban systems studies: Land Acquisition and Resettlement/ Centre for Liveable Cities - downloadable PDF)
  4. Comprehensive Planning and Development: The land acquired under the LAA was used for comprehensive urban planning and development. This included the construction of modern public housing by the Housing and Development Board (HDB), as well as the development of industrial facilities and other public infrastructure. By 1985, the government had acquired a significant portion of land, enabling the transformation of squatter areas into planned urban spaces.
  5. Streamlined Decision-Making: The establishment of the HDB and the streamlined decision-making process under the LAA allowed for rapid and efficient implementation of housing projects. This was critical in meeting the urgent housing needs of the growing population and eliminating squatter settlements

One of the biggest impacts of LAA was on the Hadrami Arab community. They were the wealthy landowners who owned substantial tracts of land in Singapore.

The compulsory acquisition of their land at below-market compensation led to a significant decline in their wealth and influence. This community, along with other affected landowners, viewed the Act as draconian and unfair.

One prominent Hadrami family, the Sallim Talib family, is estimated to have lost over S$2 billion due to the compulsory land acquisitions under the LAA.

At one time, they owned 75% of the land left by the British.

(Source: "Land Acquisition Act Impact on Singapore Hadrami Wealth" / Journal or Public Administration - downloadable PDF)

This did one major change in land ownership.

The Singaporean government became the largest landowner in Singapore by 1985.

The land is given for housing on a 99 year lease.

Source: A Note on the Land Acquisition of Singapore and Social Re-engineering / Ameen Talib, Indonesian Journal of Multidisciplinary Science

See the pdf for the note below.

This is the story of how Singapore was transformed within a matter of two decades.

Let us understand how the Singaporean economy transformed itself.

When Lee Kuan Yew became the leader of Singapore, its per capita income was roughly $400. Singapore’s GDP per capita is expected to reach $69,044.00 USD by the end of 2024.

A change of almost 175 times!

Source: Macrotrends

Is Singapore an exception?

No.

It was a rule.

Let us look at South Korea and Malaysia briefly.

South Korea: Miracle on the Han and the Repression

The South Korean dictator under whom the country made significant progress from an underdeveloped to a developed country was Park Chung-hee.

He ruled South Korea from 1961 until his assassination in 1979. Park Chung-hee's government implemented policies that led to rapid industrialization and economic growth, transforming South Korea into a major industrial power.

This period is often referred to as the "Miracle on the Han River."

Here is a quick recap of the last century when South Korea transformed into an Asian giant based on the information from this document - The Miracle with a Dark Side. Sharing the PDF for your research.

1910-1945: Korea was under Japanese colonial rule, which began with the annexation of Korea by Japan in 1910. This period was marked by Japanese dominance and efforts to integrate Korea into the Japanese empire, leading to significant social and economic changes. The Korean people experienced a decline in their standard of living and resented Japanese dominance, particularly as Japan mobilized Korean resources for its war efforts in the 1930s.

1945: Japan was defeated in World War II, leading to the liberation of Korea from Japanese rule. However, this event also marked the beginning of a power struggle between the United States and the Soviet Union over Korea, resulting in the division of the country along the 38th parallel into a communist North and a non-communist South.

1948: The Republic of Korea (South Korea) was established in the south, with Syngman Rhee as its first president. Rhee, who had spent much of his life in the United States, was supported by the United States and right-wing Koreans. The Democratic People's Republic of Korea (North Korea) was established in the north under Kim Il-sung, with support from the Soviet Union.

1950-1953: The Korean War broke out when North Korea invaded South Korea. The war involved not only the two Koreas but also the United Nations forces, primarily from the United States, supporting South Korea, and China supporting North Korea. The war ended in 1953 with an armistice, leaving the two Koreas divided and technically still at war.

1961: A military coup led by General Park Chung-hee overthrew the government of Syngman Rhee, who had become increasingly unpopular due to corruption and economic mismanagement. Park's regime marked the beginning of authoritarian military rule in South Korea.

1960s-1970s: Park Chung-hee initiated a series of economic reforms aimed at modernizing and industrializing South Korea. He established the Economic Planning Board (EPB) and introduced five-year plans for development. The government played a central role in the economy, promoting exports and investing heavily in infrastructure and industry. This period saw the rise of the chaebol, large family-owned conglomerates that became the backbone of the South Korean economy.

1970s: Despite economic growth, Park's rule became increasingly repressive, and he effectively suppressed democracy. The government's focus on heavy and chemical industries (HCI) led to a concentration of wealth in the hands of a few families and increased income inequality.

1979: Park Chung-hee was assassinated by one of his own intelligence agents, Kim Jae-gyu. This event marked the end of his authoritarian rule and the beginning of a transition to a more democratic government in South Korea.

Throughout this period, South Korea transformed from a poor, war-torn country to one of the world's fastest-growing economies, a process often referred to as the "Miracle on the Han River."

Park's Assassination

Despite the great economic transformation of South Korea, Park's regime was also criticized for the same reasons - authoritarian rule and human rights abuses.

On October 26, 1979, he was killed by his lifelong friend and the head of the Korean Central Intelligence Agency chief Kim Jae Kyu. That tragedy was referred to as "10.26" or the "10.26 incident" in South Korea.

Source: South Korean President Park Chung-hee Assassinated 35 Years Ago / ABC

One interesting theory was the CIA was involved in the killing of Park Chung-hee.

One theory posits that the American Central Intelligence Agency (CIA) orchestrated the assassination of South Korean President Park Chung-hee to thwart his efforts to develop a nuclear weapons program.

Park had initiated a clandestine nuclear project, known as "Project 890," in the early 1970s, which aimed to equip South Korea with nuclear capabilities.

This program was a significant concern for the United States, which feared the proliferation of nuclear weapons in the region and the potential destabilization it could cause.

According to this theory, the CIA's involvement was motivated by the need to maintain control over nuclear proliferation and to ensure that South Korea remained within the bounds of the Non-Proliferation Treaty (NPT).

Diplomatic cables and historical accounts suggest that the CIA had extensive interactions with key South Korean officials, including Kim Jae-gyu, the director of the Korean Central Intelligence Agency (KCIA) who assassinated Park.

Kim had frequent meetings with Robert G. Brewster, the CIA chief in Seoul, and other American diplomats, including a meeting with U.S. Ambassador William H. Gleysteen just hours before the assassination.

Read this for more information.

Suit against the CIA re US Involvement in the 1979 Assassination of South Korean President Park Chung-hee - PM Press
BOSTON DIVISION GEORGE KATSIAFICAS Plaintiffvs. U.S. CENTRAL INTELLIGENCE AGENCY Defendant COMPLAINT FOR INJUNCTIVE RELIEF I. Preliminary Statement 1. This is an action under the Freedom of Information Act, 5 U.S.C. § 552 (“FOIA”), seeking an Order for the disclosure and release of agency records improperly withheld from Plaintiff, George Katsiaficas […]

Ambassador William H. Gleysteen admitted an "indirect involvement" in the assassination. 

Source: English Translation of news report from MBC

After Park's assassination, the United States quickly recognized the legitimacy of Chun Doo-hwan, who seized power in a military coup in December 1979. This recognition was reportedly contingent upon Chun's agreement to abandon Park's nuclear weapons program. Chun subsequently downsized the Korea Atomic Energy Research Institute (KAERI) and scrapped the residual nuclear weapons and missile programs, aligning South Korea's policies with U.S. non-proliferation objectives.

Malaysia: Democratic Dictatorship

Malaysia was not ruled by a dictator during its transformation from an underdeveloped to a developing country.

The key figure associated with Malaysia's significant economic transformation is Mahathir Mohamad, who served as Prime Minister from 1981 to 2003 and again from 2018 to 2020.

Mahathir Mohamad implemented a series of economic policies and development plans, including the Look East Policy and Vision 2020, which aimed to make Malaysia a fully developed country by the year 2020. His leadership was marked by rapid industrialization, economic growth, and infrastructural development, which helped elevate Malaysia's status on the global stage.

Source: Economic Growth and Development in Malaysia / World Bank

While Mahathir Mohamad's leadership style was authoritative and he faced criticism for limiting political freedoms and suppressing dissent, he was not considered a dictator in the traditional sense. Malaysia remained a parliamentary democracy throughout his tenure.

His critics were very aggressive in how they characterized Mahathir's rule and his legacy.

Despite the phenomenal transformative growth!

Source: Iron Cage in an Iron Fist: Authoritarian Institutions and the Personalization of Power in Malaysia / Comparative Politics, Vol. 36, No. 1 (Oct., 2003), pp. 81-101 (21 pages)

In the "West-inspired" media, the phrases used for Southeast Asia and the arguments were not very different from what has been used in India recently - Democratic Backsliding and authoritarian rule.

Crystalizing the Lessons from the Big Three in Asia

Three different stories.

Same pattern.

Phenomenal growth that took a third-world poor and destitute society into a first world or even better economy in a matter of 20 years! All were backed by an authoritarian rule that had to battle the critics not just from within but from outside. Even targets of foreign intelligence agencies.

Let us summarize the different areas in which these three economies did well due to executive action.

Economy and Industrialization

Malaysia:

  1. Focused on diversifying the economy beyond agriculture, investing heavily in manufacturing and services.
  2. Encouraged foreign direct investment (FDI) through incentives and special economic zones.

South Korea:

  1. Focused on export-oriented industrialization, investing in key industries such as electronics, automobiles, and shipbuilding.
  2. Supported chaebols (large family-owned business conglomerates) to spearhead economic growth.

Singapore:

  1. Emphasized on building a strong, open economy with a focus on finance, shipping, and high-tech industries.
  2. Encouraged FDI and created a business-friendly environment with low taxes and minimal corruption.

Urban Planning

Malaysia:

  1. Implemented comprehensive urban planning strategies, such as the Kuala Lumpur Structure Plan, to guide development and infrastructure improvement.
  2. Developed new towns and satellite cities to alleviate congestion in major urban centers.

South Korea:

  1. Initiated comprehensive urban redevelopment projects, revitalizing old neighborhoods and building modern infrastructure.
  2. Implemented the New Town Development Plan to create new residential and commercial districts.

Singapore:

  1. Developed and continuously updated comprehensive urban plans like the Concept Plan and the Master Plan.
  2. Focused on efficient land use, creating a balance between residential, industrial, and recreational areas.

Infrastructure and Transport

Malaysia:

  1. Invested in modern infrastructure, including transportation networks, utilities, and telecommunications.
  2. Launched projects like the Multimedia Super Corridor to promote high-tech industries.

South Korea:

  1. Developed extensive public transportation systems, including the Seoul Metropolitan Subway and high-speed rail (KTX).
  2. Invested in smart city technologies to enhance urban living and management.

Singapore:

  1. Developed extensive public transportation systems, including the Seoul Metropolitan Subway and high-speed rail (KTX).
  2. Invested in smart city technologies to enhance urban living and management.

Environmental Policies

Malaysia:

  1. Initiated programs to improve waste management, water treatment, and pollution control.
  2. Promoted green spaces and sustainable urban development practices.

South Korea:

  1. Launched campaigns for reforestation and river restoration, such as the Cheonggyecheon Stream project in Seoul.
  2. Implemented stringent air and water pollution control measures.

Singapore:

  1. Focused on making the city green, implementing the Garden City and City in a Garden initiatives.
  2. Invested in water management projects like the Marina Barrage and NEWater to ensure water sustainability.

Social Policies

Malaysia:

  1. Implemented policies to improve education, healthcare, and housing, lifting the general standard of living.
  2. Created a more inclusive society through affirmative action programs like the New Economic Policy (NEP) to reduce poverty and increase wealth among ethnic Malays.

South Korea:

  1. Invested heavily in education and human capital, transforming the workforce into one of the most skilled globally.
  2. Improved healthcare and social services to enhance the quality of life.

Singapore:

  1. Maintained strong, transparent governance and stringent anti-corruption measures.
  2. Implemented effective public policies and ensured their strict enforcement.

What does this suggest for India?

How can India transform its own economy and society from a third world to the first world?

How to transform India?

We have broken down the recommendations into Five different sections:

  1. Urban Planning and Development
  2. Infrastructure and Modernization
  3. Economic Diversification and Industrialization
  4. Environmental Sustainability and Green Initiatives
  5. Governance and Anti-Corruption Measures

Also sharing the backup case studies from the three economies we have just studied.

You will see that the measures and policies underlined by the Modi government in the last two governments and the 2024 rule are very similar!

1. Comprehensive Urban Planning and Development

Recommendation: Implement a long-term, comprehensive urban planning strategy to guide sustainable development across cities and towns.

Details:

  • Integrated Master Plans: Develop and regularly update integrated master plans for major cities and regions, similar to Singapore's Concept Plan and Master Plan. These plans should encompass land use, transportation, housing, commercial spaces, and green areas.
  • Smart Cities: Accelerate the Smart Cities Mission by adopting cutting-edge technologies for urban management, including IoT, AI, and data analytics to improve efficiency, service delivery, and quality of life.
  • Satellite Towns: Develop satellite towns around major urban centers to alleviate congestion and promote balanced regional development.

Backup:

  • Singapore's strategic urban planning led to efficient land use and sustainable development, transforming it into a global city despite its limited land resources.
  • South Korea's New Town Development Plan helped manage urban sprawl and provided modern amenities to residents, contributing to overall urban improvement.

2. Infrastructure Development and Modernization

Recommendation: Invest heavily in modern infrastructure, focusing on transportation, utilities, and digital connectivity.

Details:

  • Public Transportation: Expand and modernize public transportation networks, including metro systems, buses, and high-speed rail, to reduce traffic congestion and pollution.
  • Utilities: Upgrade water supply, sewage, and waste management systems to ensure reliable and sustainable services. Implement smart grids for efficient energy management.
  • Digital Infrastructure: Enhance digital connectivity by expanding broadband access, particularly in rural and underserved areas, to support economic growth and digital inclusion.

Backup:

  • South Korea's investment in high-speed rail and extensive public transportation networks significantly improved urban mobility and reduced congestion.
  • Malaysia's Multimedia Super Corridor project boosted its digital infrastructure, attracting high-tech industries and fostering innovation.

3. Economic Diversification and Industrialization

Recommendation: Promote economic diversification and industrialization to reduce reliance on agriculture and create a robust manufacturing and services sector.

Details:

  • Special Economic Zones (SEZs): Establish more SEZs with attractive incentives to attract foreign and domestic investment in manufacturing, technology, and services.
  • Support for SMEs: Provide financial and technical support to small and medium-sized enterprises (SMEs) to enhance their competitiveness and innovation capacity.
  • Skill Development: Invest in vocational training and skill development programs to create a highly skilled workforce that can meet the demands of modern industries.

Backup:

  • Malaysia's focus on industrialization and SEZs helped diversify its economy and reduce dependency on agriculture, leading to sustained economic growth.
  • South Korea's support for chaebols and SMEs fostered a dynamic and competitive industrial base.

4. Environmental Sustainability and Green Initiatives

Recommendation: Prioritize environmental sustainability and implement green initiatives to improve the quality of life and promote sustainable development.

Details:

  • Pollution Control: Enforce stringent pollution control measures for air, water, and soil to reduce environmental degradation.
  • Green Spaces: Develop and maintain green spaces, parks, and urban forests to enhance urban livability and environmental quality.
  • Renewable Energy: Invest in renewable energy sources such as solar, wind, and biomass to reduce dependence on fossil fuels and combat climate change.

Backup:

  • Singapore's Garden City initiative and focus on sustainability transformed it into one of the greenest cities in the world, improving the quality of life for its residents.
  • South Korea's reforestation and river restoration projects revitalized urban environments and reduced pollution.

5. Good Governance and Anti-Corruption Measures

Recommendation: Strengthen governance and implement robust anti-corruption measures to ensure transparency, accountability, and effective public service delivery.

Details:

  • Transparent Policies: Develop and enforce transparent policies and regulations to reduce bureaucratic red tape and corruption.
  • Digital Governance: Implement e-governance solutions to streamline government processes, enhance transparency, and improve citizen engagement.
  • Public Accountability: Establish mechanisms for public accountability, including independent anti-corruption bodies and whistleblower protection programs.

Backup:

  • Singapore's strong governance and zero-tolerance approach to corruption created a conducive environment for economic growth and public trust.
  • South Korea's focus on transparent governance and public accountability helped build a resilient and efficient state apparatus.

We have not brought in the example of China, which was an extreme form of the experiences in these three case studies that we have analyzed.

The Missing Piece?

If all these changes are brought in India, it can transform from where it is to a first-world economy and society.

The question that we need to ask is this.

Can we allow the criticisms and the roadblocks from social activists and global forces to stand in the way?

Yes, Human Rights and participatory democracy that is answerable to the Western Exceptionalists is the par for the course in "Rule-based Order".

But ask yourself a simple question.

When you see Singapore of today and how the Per Capita GDP has increased 175 times placing it #2 in Per Capita PPP terms and #6 in Per Capita Nominal terms, do you think that "Human Rights of Hadrami Arab landowners" were more important than the lives of ordinary Singaporeans?

Check the top economies of the world.

Source: Per Capita GDP / Worldometer

India's growth in comparison to Singapore's transformation is very illustrative. The growth in 60 years has been just 29 times!

Source: India Per Csapita GDP / Macrotrends

So the question every Indian who aspires to live in Singapore or have a country like South Korea should ask is:

Can you allow for a benevolent dictatorial rule?

The last 70-odd years haves seen a very similar dictatorial rule by the Congress party where no dissent was allowed.

And despite that, India's progress has been absolutely pathetic and dismal. Rural Poverty and urban destitution remain the rule even now.

So they cannot claim that role any more.

They have lost that right!

On the other hand, during the rule by Modi, critics have had a field day in trying to bring him down. Not just the critics but even the judiciary has inserted itself as the overseer of the executive and legislative policies and legal actions.

Do the critics and judiciary lend themselves to a transformative experience in India that takes it to the level of Singapore and the other Asian neighbors?

If you want India to be Singapore or South Korea, can you endure a certain concentration of authority with a benevolent ruler so that your coming generations can have a better life?

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