Singapore was expelled from Malaysia in 1965 with no natural resources and virtually no industrial base. At that point, 70 percent of households lived in conditions of utmost overcrowding, and a 3rd of the population lived in slums on the outskirts of cities. Unemployment was 14 percent, GDP per capita was only about $516, and half the population was illiterate.
However, sixty years later, GDP per capita has reached $90,674, in response to 2024 World Bank data. Far away in Europe, Switzerland recorded a GDP per capita of $103,670 that very same 12 months, regardless that it had no deposits of oil, natural gas or strategic minerals.
These two countries will not be an anomaly. They fit right into a pattern repeated all around the world: countries deprived of commodity wealth are sometimes forced to construct more durable economic foundations.
Scarcity that forces selections
When a rustic has no oil or mineral resources to export, there isn’t any easy income to support the federal government budget. Policy options are due to this fact limited to 1 path: investing in people and industry.
Since 1961, Singapore has allocated about 40 percent of its total development expenditure to the social sector, including public housing, education and health care, based on the National Development Plan prepared with technical assistance from the World Bank.
South Korea followed an identical path. According to World Bank data, spending on research and development (R&D) in 2022 amounted to five.21%. GDP, which is the second highest result amongst OECD countries.
South Korea’s public research and development budget for 2025 has been set at 24.8 trillion won, the best within the country’s history, with a give attention to semiconductors, artificial intelligence and biotechnology.
Taiwan has followed an identical path. From a straightforward textile production base and with few natural resources, Taiwan now produces greater than 60 percent of the world’s semiconductors and greater than 90 percent of its most advanced chips.
According to IMF data, Taiwan’s GDP per capita reached $37,827 in 2025, surpassing South Korea ($35,960) and Japan ($34,720) for the primary time in 23 years.
Meanwhile, in response to WIPO, Switzerland has been ranked first in the worldwide innovation index for 15 years in a row until 2025, and the pharmaceutical industry accounts for five.8% of GDP, making it the biggest industrial sector within the country.
A striking contrast
Concept resource cursethe notion that abundant natural resources can actually hinder long-term economic growth has develop into one of the crucial consistent findings of development economics.
The essential mechanism is easy. Countries that rely heavily on raw material exports often have little incentive to develop downstream industries, stopping the event of producing sectors that generate innovation and high-value-added production.
A study of 128 developing countries from 1990 to 2019, published in: Comparative economic research in 2024 showed that dependence on natural resource rents consistently hinders the expansion of business value added and industrial employment.
When an economy becomes focused on extraction, processing sectors that produce higher-value goods are sometimes pushed out.
Countries without significant natural resources have never entered into this pattern in any respect. Instead, they were forced to construct industries, develop a talented workforce, and create value themselves.
Read also: Why are many resource-rich countries still poor?
Not a coincidence, but not the norm either
This pattern doesn’t robotically apply to each country.
Singapore benefited from its strategic location along the Strait of Malacca. South Korea received significant support from the United States in the course of the Cold War. Taiwan had a longtime textile industry that served as a springboard for industrial modernization. Switzerland has been constructing its competitive advantage in banking for hundreds of years.
These contextual aspects are real and can’t be ignored.
However, one common thread stays consistent: the shortage of natural resources forces governments to make long-term policy selections that resource revenues cannot postpone. According to World Bank data, in 2023 the typical GDP per capita of the world’s 44 least developed countries was $1,257, while Singapore recorded $84,734 in the identical 12 months.
None of those 44 countries lacked natural resources.
