Singapore\'s Government Is Best Described

Singapore's government is best described as a Socialist Democracy, which makes it somewhat similar to the governments of Northern Europe ("Introduction to Singapore's Political System"). The People's Action Party (PAP) has been the central governing force in Singapore since the nation gained sovereignty in 1965. The political culture of Singapore and the PAP has been described as "authoritarian, pragmatic, rational and legalistic," ("Introduction to Singapore's Political System"). Although pragmatism, rationality, and legalism are familiar to Western investors, many have been put off by the authoritarian philosophies underlying the now-famous rules against certain types of public behavior like gum-chewing ("Why Singapore?").

Similarly, many foreigners and especially Americans might find the "highly centralized," and "top-down style" of political leadership counterintuitive ("Introduction to Singapore's Political System"). Singapore is run more like a company than a country, with many leaders appointed rather than elected. This does not seem like a democratic method of governance, and yet Singapore also relies on a Parliament and Constitutional law. In fact, the appointed members of Singaporean government are not unlike their counterparts in the American President's cabinet.

The President of Singapore is elected, and serves for a period of six years. Voting in Singapore is compulsory. The Constitution guarantees certain rights and freedoms to the citizens of Singapore, including labor rights. Members of the Singaporean Parliament, or Legislature, ensure a balance of power. The government of Singapore is comprised of a diverse body of citizens, reflecting the diversity of cultures, languages, and ethnicities in the nation ("Introduction to Singapore's Political System").

As one author puts it, "Singapore is not administered by politicians, but by bureaucrats, in a meritocracy where power is gained through skill, performance, and loyalty to the nation and its policies," ("Introduction to Singapore's Political System"). While this may not seem to be a viable method of running a democracy, the PAP has remained admirably corruption-free. This is because "Singapore's political leadership has committed itself to maintaining a competitive business environment by enforcing a strict 'no tolerance' approach towards corruption and bribery," ("Why Singapore?"). The government of Singapore assumes the role of "promoter and practitioner of Corporate Social Responsibility," ("Introduction to Singapore's Political System"). The political culture and structure of Singapore make the country one of the most attractive in the world for doing business.

In addition to the nearly non-existent corruption and minimal red tape, there are other reasons why doing business in Singapore is facilitated by a strong and stable political climate. For one, the government of Singapore actively promotes business interests by keeping tax rates attractive. The tax rates in Singapore are "amongst the lowest in the world," ("Why Singapore?"). Over the past several years, in fact, Singapore has lowered its tax rates even further ("Why Singapore?"). Singapore has no capital gains tax, no estate duty, a one-tier tax system, low corporate taxes, low personal taxes, and also a low Goods and Services Tax (GST).

In spite of Singapore's low tax collection rate, and in spite of the fact that Singapore has no natural resources, the country remains one of the richest in the world. Singapore has no foreign debt, high government revenues, and a "consistently positive surplus," ("Singapore Economy: A Brief Introduction"). The reasons why Singapore is able to be so successful both domestically and within the global marketplace environment is that the economy is driven by several key factors including exports (mainly electronics and machinery, but also pharmaceuticals); financial services; tourism; and serving as "the world's largest cargo seaport," ("Singapore Economy: A Brief Introduction"). Singapore's economy is highly diversified, too, with growth deriving from health care services, casinos, media, and information technologies and communication ("Singapore Economy: A Brief Introduction"). The figure below from "Singapore Economy: A Brief Introduction" illustrates Singapore's GDP by industry.