Thanks to the good location for trading between Asia and Europe, Singapore has covered its disadvantage of the scarce natural resources and the small territory. Setting income tax very low as well as the few capital restrictions, it has increased foreign investment and business in the country.
Singapore's political stability is a big reason of its economic success. The laws are clear and predictable for citizens and consistent. This stable rules makes the laws more reliable and reduces the risk of corruption, which leads more investment. With good educational system in the country and good wage on public sectors, the national politics has maintained the high quality.
The government has avoided to rely on welfare state policies since they think that these policies are not efficient, for instance increasing income tax to fund the welfare policies affects the rich and reduces the amount of investment, which leads slower economic growth, and plus welfare policies increase an dependence on the state and decreases initiative and enterprise, which undermines the economic growth.
This tendency has been seen in some European countries and the United States, and China, Jamaica and Sri Lanka have actually cancelled their welfare policies due to the high cost. This is why Singapore thinks welfare policies should be applicable only for those who really need support.
Singapore also has had an unique housing policies. To combat its housing shortage in the 1960s, an integrated land–housing supply and financing framework was introduced.
The government limited private availability to land and actively built public buildings with the good care of urban planning. Due to this policy, 90% of land is owned by the country today, and this is helpful to manage efficiencies in construction and land use.
In general, it is not a good idea for government to build and provide housing since land use regulation reduces housing supply and increase the price, but the government should let housing market lead the price.
Singapore, however, handled the dilemma in an unique policy. The state-owned land is sold for housing as 99 year leases to middle-income people, and these people are allowed to resell it at a market price or lease it to other people during the 99 year lease under the state.
This not only prevents increasing poverty caused by the rise of housing price, but also prevents increasing wages along with the housing price, which keep labor cost low and attracts foreign companies for more investment.
Singapore also makes owning a car expensive in order to encourage people to use public transportation more.