Why Singapore matters to New Zealand right now

For many New Zealanders, Singapore may still feel like a stopover city or a gleaming business hub. But as global tensions expose just how vulnerable small economies can be, the relationship is taking on much greater significance. Drawing on his own experience studying in Singapore, Leonard Hong explores why this city-state has become one of New Zealand’s most important strategic partners, and what Prime Minister Christopher Luxon’s recent visit reveals about trade, trust and resilience in an increasingly uncertain world.

When I was a postgraduate student at Nanyang Technological University in 2023, I had an interesting realisation. My Singaporean friends, when they learned I was a Kiwi, would often recall their time in Matamata visiting Hobbiton or talk about following the All Blacks from Singapore. Some also reminisced about past trips to Queenstown and Milford Sound.

What stuck with me, however, was how many Singaporeans described Kiwis as “very friendly.”

Leonard with his friends in Singapore. Image credits – Leonard Hong/AMC

In a more uncertain world, the relationship between our two countries is becoming increasingly important to our economic security and resilience. Singapore is one of New Zealand’s closest and most trusted partners outside our Trans-Tasman relationship with Australia.

Recent tensions in the Middle East and pressure on global energy routes have reminded New Zealand how exposed we are to disruptions far from our shores. In an increasingly fragile and unstable global economy, New Zealand needs strong international partners that share our values and can support one another in times of crisis. Both countries believe strongly in a credible multilateral system that upholds the rule of international law.

Singapore matters to New Zealand not only because it is wealthy, well governed, and strategically located, but because it is a partner we can rely on in a world where shocks are becoming more frequent. Fuel, food, shipping routes, supply chain resilience, defence cooperation, and diplomatic trust all underpin this bilateral relationship.

What’s Actually at Stake in This Visit

It is a special relationship, not only at the government-to-government level, but also through business, education, tourism, and people-to-people ties. We saw this directly in the warm rapport between Prime Ministers Christopher Luxon and Lawrence Wong at the Singapore-New Zealand Leadership Forum last week.

Closer ties at all levels, including through Track II diplomacy, will only benefit both countries in the years ahead.

In trade, the two countries complement each other well. New Zealand’s abundant natural resources allow us to provide daily essentials, including dairy, meat, and even water. Singapore, by contrast, has developed world-leading industries such as advanced manufacturing, logistics, and petrochemicals, built on human capital and innovation.

Crucially, New Zealand imports 33 per cent of its refined fuel from Singapore, and Singapore is our fourth-largest trading partner. Meanwhile, 28 per cent of Singapore’s dairy imports and 14 per cent of its food imports come from New Zealand.

We are a critical partner for a city-state that relies almost entirely on international trade for its survival. Both countries depend on one another for economic security and essential supplies, as recent concerns over the Strait of Hormuz have demonstrated.

The Agreement on Trade in Essential Supplies (AOTES), announced by the New Zealand and Singapore governments, may seem like a technical arrangement, but it matters. It gives legal weight to a simple idea: in a crisis, trusted partners should keep essential goods moving.

The agreement creates a binding framework to help keep supply chains open between the two countries. More importantly, it builds on the trust we have developed over decades and provides legal assurances that our two small, open economies can continue to thrive in an increasingly uncertain world.

Many New Zealanders admire Singapore’s infrastructure, public administration, savings system, and long-term planning. Image credits – Leonard Hong/AMC

How Singapore Might Be Viewing New Zealand

From my observations, Singaporeans see New Zealand as a close and trusted partner with whom they have maintained diplomatic relations for more than 60 years.

As Singapore’s Prime Minister Lawrence Wong put it: “Singapore and New Zealand share many strategic perspectives. We have long seen the world in similar ways. We believe in openness and cooperation. Over the years, we have built a deep reservoir of trust. And we do not just speak about principles; we act on them.”

Both countries also have qualities from which the other can learn.

Many Singaporeans see New Zealand as a society that places greater emphasis on wellbeing, life satisfaction, and quality of life. Our natural beauty, lakes and mountains, and rich indigenous heritage through Te Ao Māori are often viewed as culturally dynamic and inclusive.

New Zealand’s open spaces, slower pace of life, and strong education system appeal to Singaporean families seeking a different lifestyle balance. Singapore, in turn, offers world-class institutions such as the National University of Singapore, a highly regarded civil service, and leading financial institutions like DBS Bank.

At the same time, many New Zealanders admire Singapore’s infrastructure, public administration, savings system, and long-term planning.

The relationship works partly because each country sees something in the other that it can learn from.

Leonard with Professor Kishore Mahbubani,  Distinguished Fellow, Asia Research Institute at National University of Singapore

What This Could Mean for the Relationship Going Forward

In recent years, Singapore’s economy and society have attracted growing attention in New Zealand. I have often advocated for compulsory KiwiSaver by pointing to Singapore’s highly successful Central Provident Fund savings system.

Following his visit, Prime Minister Christopher Luxon noted that New Zealand could learn from the Singapore Story, particularly in areas such as infrastructure and urban development.

Any lessons, of course, would need to be adapted to New Zealand’s own democratic, social, and institutional context.

The relationship between the two countries is likely to evolve on two fronts.

First, governments, both current and future, will continue identifying policy lessons that can help New Zealand remain economically competitive and strengthen ties with one of our most important partners.

Second, the partnership will deepen through trade agreements and closer alignment on foreign policy.

And Importantly, Why People Here Should Care

New Zealanders should care about Singapore because it is one of Asia’s most successful economies and one of our most important strategic partners.

Last year, the two countries celebrated 60 years of diplomatic relations, and the partnership is likely to grow stronger as both small, open economies navigate major geopolitical headwinds.

For many New Zealanders, Singapore may still feel like a stopover, a business hub, or a place admired for its efficiency. But it is much more than that.

It is one of our most important partners in Asia, a country that understands the vulnerabilities of small, open economies and a reminder that prosperity depends not only on markets, but also on trust, preparation, and resilient institutions.

Singapore and New Zealand are not just friendly countries. We are two small, open economies trying to remain secure and prosperous in a more uncertain world.

In an era of greater geopolitical risk and increasingly fragile supply chains, Singapore is no longer just a useful partner for New Zealand. It is a strategic one.

Leonard Hong is an experienced political economist with a focus on macroeconomics, international economics, urban development and public policy. He has a Master’s degree in International Political Economy from Nanyang Technological University in Singapore. He is a Leadership Network Member of the Asia NZ Foundation and NZ Prime Minister’s Scholar for Asia.

Singapore envy is not an economic strategy

Last week, after returning to New Zealand from Singapore, Prime Minister Christopher Luxon strongly argued that “we have serious work to do on our infrastructure” compared to Singapore.

It’s public knowledge that ministers in the coalition Government admire Singapore’s economic policy approach.

The Prime Minister admires its long-term planning for development; Winston Peters wants a national infrastructure fund, emulating Temasek Holdings, and has advocated for compulsory savings, like Singapore’s Central Provident Fund (CPF) system; Deputy Prime Minister David Seymour similarly wants mandatory health accounts inspired by the CPF.

It’s not just the Government.

The Opposition under the Labour Party announced, “The Future Fund”, also partially influenced by Singapore’s sovereign wealth funds (SWFs), to “invest in infrastructure and innovative Kiwi businesses to create good, secure jobs”. The Green Party admires Singapore’s high urban density and world-leading public transport system.

The real issue is not New Zealand politicians’ admiration for Singapore, but that they cite Singapore’s successes without adopting the rigorous policies that led to the “Singapore Story”.

We have not witnessed much progress in most policy areas, and there is little congruence between words and action.

If New Zealand politicians invoke Singapore as a model, they must honestly acknowledge what underpins Singapore’s achievements – high savings, strict fiscal discipline, effective infrastructure execution, talent attraction, meritocracy, and strong state capacity. Unless we commit to these fundamentals, talk of emulating Singapore remains empty.

So, what is the secret behind Singapore’s success, and what policy lessons can it offer to boost New Zealand’s economy?

The first difference is their national savings record and fiscal discipline.

Singapore has built strong financial and fiscal institutions for accumulating national capital through compulsory savings, with its world-leading CPF system and sovereign wealth funds, GIC and Temasek Holdings.

The CPF system requires citizens to save up to 20% of their wages, with another 17% provided by their employers, and the total asset under management is around SG$661 billion ($876b). Both superannuation and healthcare are provided through mandatory individual accounts.

Temasek Holdings manages over SG$434b, while the Government Investment Corporation handles nearly SG$1 trillion. The Net Investment Returns Contribution of SG$20b funds government spending, about what Singapore spends on education annually.

Singapore has maintained an annual average budget surplus of SG$8.4b over the past three years, supported by strong economic growth and windfall tax gains. Singapore is a capital-exporting nation with zero net debt.

Conversely, New Zealand’s KiwiSaver means employees save only 3.5%, with employers contributing a further 3.5%. More than 20% of Kiwis do not have a KiwiSaver account or don’t save. Our total funds under management are only $143b, which is far below both Australia’s compulsory superannuation and Singapore’s CPF funds.

Worse, many Kiwis are withdrawing from KiwiSaver due to financial hardship. Despite the OECD’s advice, we continue to tax savings through the Employer Superannuation Contribution Tax.

Our NZ Super Fund is world-class, but its total size is $86b, which is far smaller than any SWF in Singapore.

Meanwhile, since the Covid-19 pandemic, both sides of politics contributed to the massive increase in public debt, with net core Crown debt rising to 44%.

Interest payments have increased to close to $9b. At the same time, the Government has made costly short-term commitments while borrowing remains elevated and tax revenue weakens.

New Zealand’s debt is expected to blow out to 200% by 2065, driven by population ageing and exponential increases in healthcare and superannuation, which are already crowding out discretionary spending. Even if we achieve a surplus by 2029, the long-term projection shows we are headed for a fiscal crisis.

Singapore funds long-term investment through its accumulated national wealth. In contrast, New Zealand relies heavily on foreign borrowing, has low household savings, and a weak KiwiSaver system. Our national savings rate lags far behind Singapore’s, yet there is no effort to improve domestic capital formation.

The second difference is execution. Singapore’s success is not just about prudent public finance. It is about state capacity in turning public policy into project development.

Singapore’s success is rooted in the Urban Redevelopment Authority’s centralised planning model. Its “whole-of-government” co-ordination ensures technical requirements are clear, approvals are rapid, and land-use decisions are treated as essential infrastructure. The results are Changi Airport, Marina Bay Sands and Jurong Industrial Estate.

Since the establishment of the Ministry of Regulation, few regulatory changes have meaningfully reduced compliance costs. The new Planning Act and Natural Environment Act aim to enable more development, yet do not improve the government’s regulatory execution. New Zealand’s development remains hampered by complex consenting requirements, inconsistent political decisions, and an over-reliance on public relations and consultants rather than on technical expertise.

New Zealand’s main challenge is not a lack of goals but weak implementation. Our failure to execute, in contrast to Singapore’s disciplined execution, is the real obstacle to progress.

The third difference is talent acquisition and meritocracy.

The city-state treats talent as a crucial national asset. Singapore aggressively recruits “top-tier” global talent to build new industries and companies, thanks to its low corporate tax rates and a pro-business regulatory environment.

The Government invests heavily in elite institutions, hires foreigners deemed “the best and the brightest”, and places a high value on technical excellence in government and the corporate sector. Both the National University of Singapore and Nanyang Technological University rank in the top 12 in the QS rankings supplemented by major government investments, while competing with Ivy League institutions.

Singaporean academic Kishore Mahbubani credits meritocracy for Singapore’s success. “Meritocracy is the first reason for Singapore’s success.” At its best, meritocracy means selecting people based on abilities rather than nepotism, patronage, family ties or political convenience. We see this with the credentials of various Singaporean politicians and corporate leaders who hold degrees from Ivy League institutions and Oxbridge colleges.

In contrast, New Zealand’s migration settings do not attract the best and the brightest.

Around 180 young Kiwis around my age are leaving for overseas each day. Some argue that this is identical to the past, but this time is different. Faith and trust in our country are fading fast.

Our universities lack support, and none compete globally. The Government ignored the University Advisory Group’s recommendations – led by Sir Peter Gluckman – for advancing our universities.

Furthermore, New Zealand is moving towards a culture that under-rewards excellence. Our public service and corporate boards are now frequently populated by generalist managers and consultants rather than subject-matter experts. By devaluing the “best and brightest” in favour of soft skills, we risk losing the rigorous execution capacity we had in the late nineties.

The Government has indicated and signalled its intention for an ambitious future for New Zealand. However, actions speak louder than words.

The policies under the current coalition Government have not reflected its intention to emulate Singapore’s best practices nor “fix the basics”. Neither has the Opposition presented its proper costings, economic analysis, or alternative solutions to these long-term structural challenges.

Consequently, our economic trajectory is diverging further from Singapore. Singapore’s real GDP grew at an average 3.5% per year from 2023. Meanwhile, New Zealand’s real GDP grew at a meagre 0.6% during the same period. We are experiencing one of the lowest growth rates among OECD countries.

I accept that Singapore is not a model to be copied, but it offers public policy lessons that can help us fix our productivity woes and relative economic stagnation.

Singapore’s success isn’t just a vision; it’s the result of relentless fiscal discipline and state capacity. If our political leaders want to follow their lead, they need to stop talking about the destination and start prioritising transparent budgeting, strict expenditure controls, and building effective public institutions.

Singapore envy is not an economic strategy.

Leonard Hong is an economist based in Auckland who has a Master’s degree in International Political Economy from the Nanyang Technological University, Singapore (2024) with the support of the Prime Minister’s Scholarship for Asia. He is a leadership network member of the Asia NZ Foundation and a former adviser to former Minister of Commerce and Consumer Affairs Hon. Andrew Bayly