Hong Kong and Singapore: Twins or Kissing Cousins?

Abstract

Asking whether it is the similarities or the differences between Hong Kong and Singapore that are the most striking is like asking whether the glass is half full or half empty; the answer depends on the perspective of the observer. For myself, it is the differences that are most noteworthy. For others, such as Pang Eng Fong, it is the similarities that impress. Indeed Pang Eng Fong used the term twins to describe these two city-states.' The intent of this paper is to explore some of these similarities and differences and, I hope, shed some light on the development processes involved. This article first reviews their macroeconomic performances, discusses a model that helps explain their performances, makes some judgments concerning strategic factors, and focuses on the role of the government in both economies.2 As a point of departure, certain characteristics of the two areas should be noted. As city-states, both exemplify natural resource poverty. Hong Kong, however, is twice the size of Singapore, having a population of 5.5 million compared to only 2.6 million in Singapore. Of the two, Singapore has the higher per capita income at $6,600 (1983 U.S. dollars), compared to $6,000 for Hong Kong.3 Both were created by British colonialism during the nineteenth century, though Singapore has been a fully independent country since 1965. Hong Kong is still a Crown Colony and will be until 1997. The original economic base for both was an entrep6t: Singapore for Southeast Asia, and Hong Kong for south China and the overseas Chinese community. Both were created by immigrant populations from China; however, in the case of Hong Kong there was little regional diversity and Cantonese was almost the only dialect spoken. In Singapore, migrants came from several regions of China and maintained separate communities. In addition, Singapore has had significant numbers of immigrants from Malaysia and India. Finally, Singapore is surrounded