Saturday, November 27

Hand in hand with bitcoin, could El Salvador be the next Singapore?

Key facts:
  • Singapore went from being a poor country to one of the richest in the world in half a century.

  • Foreign investment, financial independence and freedom is what bitcoin can offer.

At the close of Bitcoin Week that took place in El Salvador in mid-November, President Nayib Bukele announced the creation of the Bitcoin City. On social media, the government replied to the president’s words and compared the Central American nation to Singapore, one of the richest countries in the world.

What is the connection that the Salvadoran State sees (and publicly promotes) between these two countries? How can two realities that are currently so distant be connected?

The first thing is to find some points in common that, although superficial, contextualize the comparison. Singapore today has 5,450,000 inhabitants, according to official data. For its part, El Salvador has “barely” one million more: 6,325,000 to be more precise.

Regarding the territory, both are relatively small countriesAlthough the Asian nation, being a city-state, has a much smaller surface: just 730 square kilometers against more than 21,000 km2 of El Salvador. In the world ranking there is not so much difference: they are 177th and 148th from largest to smallest, respectively.

Singapore, an economic beacon to the world

When it comes to seeing how the two nations in question differ, the economic plane is the first thing that stands out, both at the national level and for its inhabitants. Singapore is the fourth country in the world in terms of wealth according to a BBC article, even despite being one of the “youngest”; it became independent from the United Kingdom in 1963 and from Malaysia in 1965.

The main characteristics of the Singaporean economy show an industrialized, modern country with a capitalist approach, but with state control. In its 56 years of life, it went from being a country that manufactured goods with local labor to being a financial hub that offers benefits for foreign investors and free trade agreements with the main world powers.

Singapore’s GDP has grown much more than that of Spain, Mexico and Chile in recent decades. Source: VisualPolitik /

This growth has occurred through economic freedoms and a highly educated population, with 33% of the inhabitants with a university degree, according public data Singaporeans. Between 2010 and 2020, that percentage grew by 10%.

The low tax burden in Singapore favors the arrival of large international firms that decide to establish their offices there. In accordance with this articleIt is the second country in the world with the least economic regulations, only behind Hong Kong.

The results? From 1976 to 2014, the country had a growth of more than 6% each year. Per capita income, meanwhile, went from about USD 500 to more than USD 56,000 per year. It is also not too expensive a country to live in. The statistics they place it one place below Spain in this ranking, but with a monthly income in euros almost double.

El Salvador seeks in bitcoin an engine for its development

Beginning with the adoption of bitcoin as a legal currency in September 2021, Nayib Bukele seeks for El Salvador to become a worldwide reference for new technology industries. As Singapore did from the nineties, the country led by Bukele tries to go from an export model (mainly textiles and products such as coffee, sugar and cotton) to an attractiveness for foreign investors.

As soon as the Bitcoin City was announced, El Salvador was compared to Singapore through the
official social networks. Source: Twitter.

With this, the country tries to settle some outstanding debts in which it can be compared with Singapore, such as social inequality and dependence on foreign economies.

In that Central American country, the last decades have seen a decrease in the income gap between the poorest and the most affluent, according to a report from the World Bank. Bitcoin, due to its decentralized nature and its potential as an asset with an upward trend, can help more people in rural areas access a market that allows them not only to take care of their money, but also to increase it.

Regarding foreign dependence, El Salvador’s is linked above all to the United States, having as its official currency the US dollar (in addition to bitcoin). The cryptocurrency, which is not issued or regulated by a Central Bank that can devalue it at its discretion, as has happened with the dollar in 2020, can be a solution in this regard.

Bitcoin as a door to people’s freedom

While this point is not mentioned or recognized by any state publication on both sides of the Pacific, both in Singapore and El Salvador it is accused to the authorities to undermine individual freedoms Of the inhabitants.

The Southeast Asian state had only one president in its first 31 years of history, Lee Kuan Yew. Although it is considered the main responsible for the exponential growth of the country, many reports They report that this was at the cost of strict regulations on freedom of expression and even human rights violations in matters of Justice.

A Nayib Bukele also accused him of authoritarian. This year alone, the Salvadoran president had to respond to critics of the opposition and of the media for replacing judges of the Supreme Court of Justice “at their discretion.” Also the Bitcoin Law produced rejection, especially at the beginning, before it became clear that the use of the cryptocurrency was optional.

El Salvador clings to Bitcoin to go “to the moon”

In short, it can be said that El Salvador and Singapore have links with each other that excite in the Central American country for the future. The connections are both in the challenges faced by one and already through the other and in the tools to achieve the promised progress.

Singapore has already achieved a marked rise in the quality of life of its population, while El Salvador is clinging to Bitcoin to reach “to the moon.”

The roadmap to achieve this has several milestones reached and a new goal. Bitcoin has already been adopted and the cryptocurrency has been mined with geothermal energy. Profits were even made and reinvested. The next thing is to build Bitcoin City, the “bitcoiner paradise” that Bukele promised at the close of a historic week for his country.

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