Preliminary observations on socio-economic development – A comparative study of economies

Last month, I was invited to conduct a two-day session on New Product Development by the Institute of Innovation and Entrepreneurship for start-ups in Singapore.

I was amazed at the socioeconomic progress made by Singapore since her independence in 1959. A few years back, I read the book, My Life, of Cuban Leader, Mr.Fidel Castro. In the book, he mentions about the high levels of social progress made in Cuba as reflected by the respective human development indices.

Coincidentally, both Singapore and Cuba have achieved independence at the same time (1959). After looking at the progress made by Singapore in both social and economic fronts, I was wondering what could have been the reason for Cuba to fare only in social front (btw, in few areas, as per the HDIs, surpassed Singapore!).

Is it to do with the large volume of FDI by MNCs who have setup their respective manufacturing/ service units in Singapore? Or, Is it to do with encouraging private entrepreneurship, which in USA, contributes to more than two-thirds of the country’s GDP?

While being cognizant of the fact that the above questions are relevant for Economists and Political leaders, whom we look towards framing policies to foster socioeconomic progress, nevertheless, I was curious to do a preliminary analysis with some authentic data.

Looking for data to compare against standard metrics, I found The World Factbook published and maintained by Central Intelligence Agency for doing a preliminary analysis. The data is captured and presented in this spreadsheet.

Please be in the know that the below observations are preliminary and at best, could be treated as subjective interpretations of the data, sans, a thorough statistical analysis.

  • If FDI inflows into both the countries are compared, it seems that the economic embargo against Cuba could be one of the factors for the low economic indicators.
  • It seems to me that the common law inherited from England with a justice system to protect the interests of private entrepreneurs and their property has helped in creating material wealth through maximizing their self-interest, as opposed to communal interests in codified justice system like Civil law or Shariah law.