Medical Savings Accounts: The Singapore Experience

Policy Reports | Health

No. 203
Monday, April 01, 1996
by Thomas A. Massaro, M.D., Ph.D. and Yu-Ning Wong

Singapore?s Economic and Social Welfare Systems

Singapore is a small (240 square miles) island city-state at the tip of the Malaysian peninsula. Its four official languages (Chinese, English, Malay and Tamal) reflect the ethnic and cultural diversity of its 2.9 million people. In 1965, after 140 years of British rule, Singapore became a semiautonomous state in the Federation of Malaysia and achieved complete independence in 1965. With no natural resources other than a hardworking and tolerant population, this tiny nation has in three decades built one of the most robust economies in the world.

In 1993 the Singapore economy grew by 9 percent and generated a per capita income of S$27,864, or about $18,116 in United States dollars.3 Its foreign reserve account is the fifth largest in the world after those of Japan, Taiwan, Germany and the U.S. The unemployment rate is 1.5 percent and the literacy rate 91 percent.

Since independence, the ruling People's Action Party4 has managed a paternalistic and authoritarian government and promoted an aggressive social program, under which people are required to save to finance benefits that are provided by government in most developed countries.5

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