Singapore was one of the original "Newly Industrialised Countries" (NICs) alongside Hong Kong, South Korea and Taiwan. Between the 1960s to the 1980s, the manufacturing industry, in particular, was able to attract numerous Multi-National Companies (MNCs) and Foreign Direct Investment (FDIs) into the country. This became the foundation for Singapore to grow into one of the most advanced and technologically driven economies in the world. With these changes, the Singapore hotel industry grew as well since the city attracted many tourists in the region.
In 2010, Singapore was the third fastest growing economy in the world behind Qatar and Paraguay – with a real GDP growth rate (constant prices, national currency) of 14.471 percent.
The economy of Singapore is best described as a mixed economy. Although the country strongly advocates free-market policies and practices, government intervention is also evident in macroeconomic management and major factors of production such as land, labour and capital resources. This innovative and highly successful economic system – where both the market and the state have equally strong roles in the government – is dubbed as the Singapore Model.
The Singapore Model was born out of necessity. Singapore has a relatively small domestic market, and thus has to open its economy to external markets in order for the economy to thrive. However, the inherent vulnerability in depending on external markets compelled the government to enact economic policies that would safeguard the country from perturbations in the global market. Apart from these policies, the government has also actively encouraged new industries to develop in Singapore so as to respond to the needs of the global market.
The underlying influence of the government can also be felt in other various facets of the society – from education, to transportation, to housing and to the media. However, many social policies that have been implemented are often seen to be supplementary for the economy. As such, many people have labelled the country as “Singapore Inc.” – where the country appears to be run more like a corporation than a nation.