Remaking Singapore

Syndicate 6

Country Background
Singapore, officially the Republic of Singapore. Made
up of the diamond-shaped main island and over 60 much
smaller islands.
Capital
Language
& Tamil
Total Area
Population
GDP per capita
Currency

: Singapore
: English, Malay, Mandarin
: 716.1 km2
: 5,399,200 (2013 estimate)
: $50,323
: Singapore dollar (SGD)

While Singapore continue to grow, competitive challenges

were becoming increasingly evident. Most Singaporeans
were resigned to continued change as the only way to
sustain prosperity.

What other steps were needed to

maintain and enhance Singapores
competitiveness?

Singapores Economic History

1

2
Origins Of
Modern
Singapore
The End of British Rule: 1958 1964
Creating Independent
Singapore
Becoming Asian
Tiger
Recession and
Reform

Singapore
Maturing 1991 to
2008
Dealing with external
shocks: 1997 - 2003
The Economic Review
Committee

Singapore
in 2008

The End of British Rule: 1958 - 1964

1946
1819

The End of British Rule : Colonial

Office dissolved, Britain to agree to
increase Singapores self-governance.

Thomas Stamford Raffles arrived and

signed a treaty with Sultan Hussein Shah
of Johor on behalf of the British East India
Company to develop the southern part of
Singapore as a British trading post.

1954
Lee Kuan Yew create
The Peoples Action
Party, against British
Colonial

1860

Early 7th Century

As classic entrepot
economy, traffic through
malaca straits increasing
after Suez Canal openned

Singapore as
important port and
trading center

1955
CPF (a social security
plan) was introduced
to increase the countrys
saving rate

1963
Singapore
signed an
agreement to
form the
Federation of
Malaysia

1948

7th Century

1800

1850

1900

1950

Singapore 1st
elections, Lee
Kuan Yew as
Singapores Prime
Minister1955

1960

1965

Creating Independent Singapore

Creating a Singaporean identity that would unite the Countrys diverse ethnical groups.

1968
Lees government create
viable country. Creating HDB
and EDB, focused on job
creation and the provision of
decent housing,

Replace import subtitution with strategy of

aggresive export promotion
Development Bank of
Singapore, launched a huge
wave of investment into local
firms

1965

1965

The Ministry formally

incorporated its
investments arm into
Temasek holding.

1970

1967
EDB programe
success to
reduce
unemployment

1974

Low-income citizens
were allowed to use the
entirety of their CPF
balances to
buy low-cost HDB flats

1969
The EDB
opened its
foreign offices

Government-linked
Company (GLC)
were forced to
compete with foreign
rivals

1970s

Becoming Asian Tiger

During the period time; Foreign investment inflows, export-oriented manufacturing, and external trade all
grew rapidly. Economic success earned Singapore and several other east Asian nations the appellation of
little dragon.
1980
Real GDP grew 8.4%
(compounded annually)
Construction sector rapidly
expanded (on several large
infrastructural development
projects, rather than from hightechnology sectors).

1970
Singapores real
GDP growth
accelerated to
12.9%.
High
unemployment
rate evaporated.
Work rules were
gradually relaxed.
Foreign workers
was admitted to
Singapore.

Peak of
Economic
1973
Boom maintained the convertibility of the
The government
Singapore dollar - The currency was allowed to
float
Guest Workers constituted approximately 13% of
the labor force
1st

International
GDP growth felloil
, still,shock
the economy
1973

1973

9%.

Wages Policy

1979

The Lee Kuan Yew government

responded by initiating a large wage.
The policy would encourage
Singapores factories to shift to higher
technology

grew at a rate of 7.1%.

1970

2nd
International
1979
oilbyshock
Real GDP grew
more than

1976

1978

1980s

Recession and Reform

The Wage policy was overambitious;
heavy payroll taxes
external demand was slowing.
dependence on the construction
boom

Strong world trade growth assisted the impressive performance (during

recovery), but it owed much to the adoption of the corrective measures
recommended by the Economic Committee.

Next Lap plan

1987

1985
Deep
Recession
Sharp
rise in unemployment,

1988
High export growth and
domestic demand led to
11.5% real growth.

1990
Government-linked
companies
established
(Singapore Airlines
and Telecom)
Asias third most
important financial
center.
Worlds largest
container port

1986
The government lessen
its extensive managerial
and development role
Flexibility in wagesetting, and reduction of
the forced savings rate

1985

Long-term plan: set the goal of

achieving a U.S.-level per-capita
standard of living by 2030.

Recovery had
The
real GDP growth rate 9.8%
begun

weak external demand, low

profits, and much lower
investment in manufacturing.
Real GDP declined
The depressed international
market for oil.

1991

1988

1991

Singapore Maturing: 1991 to 2008

Next Lap Plan attract new investments in high-value-added
industries (electronics, IT, communications, petrochemicals).
Improve local companies: (1996) formed Productivity and Standards
Board (PSB) identify and nurture promising SMEs to become Asian
MNCs.

The Thinking Schools, Learning Nation transform education

system to foster creativity, independent thinking, and problem solving.
Comprehensive reforms in school management processes, systems
and structures paved the way for subsequent changes in curricula and
pedagogy.
Develop Research Centers and Advanced Training Programs
The governmental National Computer Board announced a sub-plan for
the development of information technology (IT), IT2000.

Dealing with external shocks: 1997-2003

The Asian financial crisis in 1997-98 was the first of a number of severe
external shocks that hit the Singaporean economy. This led a flood of
foreign capital flows into Asia.
The Committee on Singapores Competitiveness (created in 1997):
recommended that Singapore reduced its business costs, maintained
investor confidence and continued to build up the peoples capabilities to
ride out the economic storm; urged government to solidify the financial
system, diversify the economy by developing new markets for exports, and
form strategic alliances with regional economies to speed up the recovery
process.

Singapore had much stronger economic fundamentals than

its neighbors but was affected nonetheless.

The Economic Review Committee

(2001) established The Economic Review Committee (ERC) (chaired
by Lee Hsien Loong). The ERC recommended short-term adjustments
to improve the relative cost position of companies located in Singapore.
1. Cut employers contribution
2. Expanding economic ties
3. Sign Free Trade Agreement
4. Government-linked Companies (GLC) becomes more active
investor abroad
5. More agencies for workforce
6. More development in Science Policy
7. Turn Singapore into a Vibrant Global City for Information and
the Arts
8. Transform Marina Bay into an exciting Environment

Prosperity Growth Over Time

Singapore 2008
(2008) was ranked 4th in the prosperity league of countries
(behind Norway, but ahead US, Ireland, and Hong Kong)
Quality of life was generally considered high.
Better environment and good schools.
Labor productivity stood at 96% of the OECD average
Singapores trade (Exports and Imports) was well over 400%
of GDP.
Foreign investment inflows and outflows had reached historic
highs had become the largest outward investor.
World Bank: Singapore had the worlds best environment in
terms of rules and regulations for conducting business.
(2005) creation of Competitive Commission of Singapore
(CCS) to create a more open playing field on the
Singaporean market.

Singaporean Clusters
The Singaporean economy consisted of a portfolio of clusters --- supported by
government policy.

Traditional strengths:
Petrochemicals
Transportation and
logistics
Finance
Information
technology
New clusters:
Tourism
Education
Biopharmaceutical
s

Singapore National Cluster Export Portfolio, 2001 to

2007

Whats Next?
In 2008 Singapore was the first Asian country to enter into a
recession as the result of the global financial crisis. The financial
services cluster was shaken by the announcement of lay-offs, the
port was bracing itself for a slump in global trade, and there were
rumors about Sands, the lead developer behind the Marina Bay
casino complex, facing financial trouble.
Casino in Marina Bay and Sentosa Island --- reversing a longstanding policy against gambling as a threat to the countrys vaunted
work ethic.
In early 2009, Prime Minister Lee Hsien Loong announced the
formation of an Economic Strategies Committee (ESC). The aim of
the ESC: to provide recommendations on how to suppoet
sustainable future growth.
Boost Skills in Every Jobs
Deepen Corporate Capabilities to Seize Opportunities in
Asia
Make Singapore a Distinctive Global and An Endearing
Home