Singapore as a British port city on a small island was never a third world country. Before WWII it was already known as a major leisure, high life spot (as evident by Verinsky's 1931 "Magnolia"). It was surrounded by 3rd world countries like an American base may be surrounded by middle eastern shacks, but it is very different from them. If that base was to gain independence it would retain the QoL.
Lots of former British colonies have posh enclaves surrounded by poverty. Singapore’s GDP per capita in 1960 was similar to Guatemala: https://cepr.net/documents/publications/econ_growth_2005_11_.... And as the article noted, 20% of that was British military spending which went away with independence in 1965. The UK’s per capita gdp was more than 5 times higher.
Even in this table, you see Taiwan and South Korea with same impressive growth as Singapore, and then you see Thailand and Malaysia that fare very well. And they all have the handicap of not consisting out of a metropolis entirely, since capitals are known to have high GDPs per person and countryside is known to be lagging.
All of those countries were poor too. I’m not saying Singapore was the only country to develop. But lots of countries that were similarly situated to Singapore and Korea in 1960 didn’t develop.
How separate was British Singapore from British Malaya? My understanding is that Lee Kuan Yew wept when Singapore was thrown out of Malaysia. Neither he nor anyone else expected that Singapore would become a first-world economy and Malaysia would, well, not.
