GREAT LAKES INSTITUE OF MANAGEMENT

Emergence of Singapore
To study the development of Singapore in four phases
Group 4, Section 2:
Aatish Rajshirke
Aditi Dhar
Gundeep Singh
Ishan Ghai
Nishanth MV
Sakshi Sharma
Sumitabh Saha
Vaibhav Agnihotri

1965-1980
a) Employment creation
b) Increase number of industries
c) Make Singapore an attractive FDI destination
d) Creating an alternative strategy as separation from
Malaysia almost killed their import led strategy

1981-1990
1. Increase productivity and efficiency
2. Promote trade as one of the major growth centers
3. Development based on Manufacturing and services
4. Skill development and dealing with issues of labor
shortage.
5. Finding new avenues for growth like IT and financial
services

Steps taken by the

government

a) Establishment of Economic Development Board

(with several offices across the world to attract
investment) and Housing Development board (to
build small houses for low and middle income
group)
b) They followed an export-rich strategy where
government started investing in areas where
private companies had lack of funds like Airlines,
Banks & Ports
c) In order to improve the labour climate, they lay
down several acts like Employment Act.
d) Investment in key infrastructure for attracting
industries like Industrial town & Ready to move in
factories
e) Tax benefits to foreign establishments & Small
Singapore owned firms
f) Special funds for development of ports

1. Government policy aimed at increasing productivity and

efficiency
2. Rely on productivity and hardwork as USP rather than
labor rates.
3. After the 1985 recession, govt policy changed to give
private sector more freedom and relax wage rate
determination policies. Reduced the mandatory
contribution to CPF from 50% to 35%.
4. Relaxed the resident status conditions to keep more
skilled workers in the country.
5. Continued the policy of government linked businesses and
ran these businesses professionally.
6. Invested in Infrastructure and IT. Strategies to incorporate
IT in governance were adopted. The National Computer
Board was set up to spearhead computerization.

Role of EDB

1. More industries were awarded the pioneer status. The

80s saw the trend of more financial services industries
getting the pioneer status showing a major change in
strategy of the EDB and moving away from just
manufacturing.
2. Incentives for companies who set up their headquarters in
Singapore.

Aim for the strategy

To promote Singapore as a cheap but labour

friendly country
Through its foreign offices, attract more investors

3. In 1983, the Trade Development board was set up to

develop Singapore as the trading hub of the world.
4. In 1985, services and manufacturing was proposed to be
the twin growth engines.
5. SME master plan and other strategies to upgrade
businesses was set up.
6. APEC was formed to promote economic and trade
cooperation in the Asia Pacific Region.
Where Government
invested?

1) In developing basic infrastructure like houses,

roads & ports
2) In partnership with private parties in Airlines &
Banks
3) Shares in the manufacturing firms

1. Government focused on trade development and

developing port infrastructure
2. Incentives for financials sector and MNCs
3. Continued to invest in establishments and companies and
created a wide network of government linked companies
that accounted to 25% of GDP.
4. Infrastructure investments were another area of focus.
5. Large investments also took place in IT and especially IT in
government.

Performance

1. Average Growth rate at 7.3% overall in 1980s. The year

1985 saw a contraction of 1.4%.
2. Proportion of skilled employees grew from 11% to 22%
3. Singapore Port became the busiest port in the world.
4. Oil refining industry became the third largest in the
world.
5. IT sector grew by 10 times during these years.

Unemployment rate: 3.5%

GDP Growth Rate: 10%
Manufacturing Sector: From 14% to 25% of GDP
High growth in manufacturing, telecom,
transportation & financial services
Increase in consumption & Standard of Living of
families

Macro Economic Stability

The country showed impressive stability in terms of growth
during these years, except in the year 1985 and 1986. These
years were affected by deep recession.
1. During the years 1980 to 1984, country grew at an
impressive 8.4%.

2. During 1985, it contracted by 1.4%.

3. 1987 saw recovery and the country grew at 9.8% and 11.5
% in 1988.
GDP implications

Y=C+I+G+X-M
C: Consumption increased due to increase in
employment & family income
I: Investment from Government definitely went up
G: Went up
X: Export went up as Singapore went from import led
economy to export based economy
M: Import decreased slightly, particularly with
electronics
Thus, overall GDP increased tremendously

Y=C+I+G+X-M
1. The consumption increased due to the increase in wage
rates. The wages were increased by 14-20% and this
directly resulted in an increase in consumption.
2. The government invested heavily in infrastructure, IT and
other related areas.
3. Government expenditure was limited to areas like health,
education and social welfare.
4. The trade was one area that Singapore showed massive
growth in. The trade was around 5 times the GDP during
these years.
Overall, the effect on GDP was positive. The average growth
rate was around 7.3% in the years from 1980 to 1990.

1991-2001
Aim for the strategy

Steps taken by the

government

2002-2014
Focus on growth through innovation
Development of Human Resource Capital
Making environment conducive to Business from
outside Singapore and foster Entrepreneurs in
Singapore.
Improving relations with Europe, ASEAN, and nations
such as Australia, China and India.
Signed FTAs with the EFTA (European Free Trade
Association), Australia, US.
Set up and implement the recommendations of the
Economic Review Committee set up after the
disappointing performance in 2001.

Role of EDB

Where Government
invested?

Performance

GDP implications

Establishing a high-level National Productivity and

Continuing Education Council (NPCEC) to oversee and
drive efforts to boost productivity.
Establishment of Startup Enterprise Development
Scheme (SEEDS) was launched to promote
Entrepreneurship in the country.
EDB launched the Start-up EnterprisE Development
Scheme (SEEDS) in 2001.
Business Angel Scheme (BAS) was initiated in 2005 to
further stimulate entrepreneurship and technopreneurship through business angels investment and
funding.
Development of Singapores interactive and digital media
(IDM) industry.
Establishing Energy Innovation Programme Office (EIPO)
Investment in schemes to develop Human Resource
for Manufacturing and Services Industry.
Heavy focus on R&D.
Development of factors necessary for the growing
Service Industry.
GDP growth averaged 4.6 % p.a. during this period.
Share of services producing industries expanded from
62% in 1998 to 68% in 2009.
Share of skilled employed residents rose from 41% in
1998 to 52% in 2010.
GDP growth averaged 4.6 % p.a. during this period.
Consumption has increased during this period 3300
per month ( Wages) to 5100 per month.
Heavy Investment in IT, development of
Infrastructure, creating Human Capital, Research and
Development.
The trade has grown thrice as compared to the figures

in 2002. Due to the tie ups with US, Australia, EFTA,

India, China.