"This is the generation of the great LEVIATHAN, or rather, to speak more reverently of that mortal god, to which we own under the immortal God, our peace and defense." -Thomas Hobbes: Leviathan
It is not surprising that most small city states inevitably are mercantile cities. Without any natural resources, there are only two sources of income for such states, capital and labour.
This of course explains the two main features of Singapore’s economy.
Why does the government not invest the capital locally? Because they need the capital to beget more capital. Unlike other countries which gains capital to invest in real things, e.g. farms, mines, industry, etc, Singapore has no real resources to spend the capital on. We gain capital so that we can sacrifice it to the financial industry to get more capital. I suppose this precisely falls under a Marxist critique whereby capital becomes a thing unto itself where, instead of us using it to make real things, we instead serve it and sacrifice more and more to it by hoarding and accumulating more and more capital to make more.
The problem of course is that we are, perilously, dependent upon the state of the world economy and the fickle movements of financial capital. Should a catastrophic global financial meltdown occur, we would be obliterated.
The other feature of course about Singapore’s economy is the prevalence of extremely cheap labour, our only other selling point. Since labour is the only other good we can market, we naturally have to push the price of labour down to make us viably competitive in the open market of investors looking to start up here as well as to compensate for the high cost of doing business here because of our other lacks.
In short, Singapore actually is a capitalist nation is every sense of the word. We worship capital for its own sake and we treat labourers as commodities rather than people.