Rise of Singapore
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RISE OF SINGAPORE: From WWII ashes to a great Phoenix ...

RISE OF SINGAPORE: From WWII ashes to a great Phoenix
BMIR Program, Thammasat University: PO371 SOUTHEAST ASIAN AFFAIRS

Index:
1.Politics
2.Reliance on human resource
3.Education
4.Healthcare service
5.Economic development
6.Sustain economic development
7.Provision of housing
8.Singapore foreign relations

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  • Hello, our group would like to introduce you with story of Singapore: how it rise from ashes to a great Phoenix.
  • Today, our group would like to talk about Singapore in term of Politics / Human resource / Education / Healthcare / Economic development / and how to sustain it / housing / and its foreign relations.
  • As the 5th section, we would like to discuss about economic development.
  • Quest for development strategy
    -For geographic factor, as Singapore located on Malacca strait, this location give the competitive advantage for logistic of goods and services.
    -If there’s something good, there’s also something bad. Singapore poor fundamental factors including: small land resource and poor in resource which constrain the development of agriculture sector and heavy industry sector. Small number of population mean small market.
    -Thus, Singapore government go for policy to export-oriented (for economic of scale) and also investment incentive. This means the government using the macroeconomic stability (sound fiscal, low inflation rate, positive real interest rate) and low intervention in price of goods and service.
    -Another essential element for increasing investment incentive included educated human capital and tax incentive policies.
  • For tax policy
    -Surplus budget (except 1986, 1987 and 2009) mean the government owned High RPE (relative political extraction).
    -According to the graph, you can see that the Ratio of total tax revenue to total revenue continue to decline from 72% (1960) to 58% (2011).
    -With downsizing of tax revenue, Singapore seek to reduce its spending on social security spending by having CPF (Central Provident Fund) saving.
  • -Singapore government has performed tax reform and tax incentive program in order to stimulate foreign trade and investment by lower the rate for corporate tax and Customs.
    -This situation took affect as the dramatically changes in revenue from total tax revenue. We compare the year of 1960 to 2011, we can see the lower of revenue from customs & excise from 45% to 4%; higher income tax from 33% to 45%; higher GST(Goods and service tax) from 0% to 18%.
  • -Option to increase the GST can be considered as a good choice for government as the increase the revenue from tax and avoid to damage on investment for productive of producer side and export oriented industry. In addition, it helps to widen the taxation payer’s base.
  • If we talk about fiscal policy, we must mention about 2 types of macro-economic policy including:
    -First, short-term policy as stabilization tool: the large amount of wealth was stagnated in CPF (Central Provident Fund) which mean government spending owned narrow scope of effect. While the increasing amount of government bond and surplus budgetary implied the shortage of money supply (lack of liquidity). Its role also function effective in area of stable currency as there’s high amount of foreign reserve.
    -Second, Long run policy as economic growth stimulus tool: Fiscal policy has been focus on building domestic revenue while restrict expenditure which some called ‘saving aspect’. Another part of spending is considered as capital project which focus on future return of capital gains and revenue from investment.
  • The 7th point, we would like to discuss, is provision of housing.
  • -As housing was considered as basic need for people, government must take role as land locator for proper use of land for citizen welfare and efficiency allocation.
    -In this sense, Public housing program would be an important tool to maintain the social harmony and stability of country.
  • With population of 5 million in small limited area, the population density is high at the point that land resource become rare.
  • -After PAP (People’s Action Party) won the election of 1959 with campaign on new public housing policy which highlighted the need for having more effective housing authority capable of providing low-cost flat to low-income population.
    -The Housing & Development Board (HDB) become the answer which found in 1960. HDB was Singapore's public housing authority and a statutory board under the Ministry of National Development. HDB is the government body that takes care of housing and improving the living conditions for the population.
    -HDB preferred to construct high-rise flats, which enable most efficient use of land. Each building is also equipped with common facilities and commerce area. In each HDB project was formed like a "new town" - within it, it provides you from education to job (industrial estates).
  • -How can there be stable economic development if their citizen can't even afford a house. In this sense, ownership of house becomes essential factor for each individual financial security.
    -Before 1964, HDB flats were built for rental purpose only. After that year, HDB housing policy shifted toward Home Ownership Scheme which allowed and encouraged Singaporean citizen to gain their ownership of their HDB flat unit. In addition, the government was also giving the incentive for poor citizen (who rented flat from government) by giving them at discount price (from CPF and government subsidies).
    -Nowadays, the successful of HDB was highlighted by the highest-ownership at 92%. (WDR 2009)

Transcript

  • 1. Group: 28 RISEWWII ashes to a great Phoenix OF SINGAPORE From NOV 22, 2012 PO371 SOUTHEAST ASIAN AFFAIRS 1
  • 2. Keynote Agenda • • • • • • • • Politics Reliance on human resource Education Healthcare service Economic development Sustain economic development Provision of housing Singapore foreign relations 2
  • 3. The Politics 3
  • 4. Political Background • Received independence in 1965 • Democratic system – similar to United Kingdom • Parliamentary republic, also know as unitary multiparty parliamentary republic – 99 members of the parliament • Executive power relies on Cabinet, President, and led by prime minister 4
  • 5. Political Background(2) • 7 presidents(6 years a term) – Incumbent Tony Wan Keng Yam • 3 prime ministers(5 years a term) – Lee Guan yew(1959-1990) – Goh Chok Tong(1990-2004) – Lee Hsien Loong(2004-present) • People's Action Party has ruling for 50 years as a single-wining election • 4 vulnerable opposition party 5
  • 6. From Third World to First World • • • • • On foreign policy On economic policy On social policy On education policy Single-ruling administration 6
  • 7. Criticism on Lee Kuan yew regime • • • • Deceitful democracy Single-party system Repressive regime A deficiency in Checks and Balances 7
  • 8. Reliance on Human Resource 8
  • 9. Facing the future threats of ageing population • Singapore population growth 1950 – 2000 – Confident of a better tomorrow, people were encouraged to carry on the Asian tradition of having large families. • Problems – The resources available at that time were inadequate to provide the large population with a reasonable standard of living. – Unemployment, shortage of houses, inadequate healthcare and education services. 9
  • 10. Facing the future threats of ageing population (cont.) • Policies to reduce population growth – 1966 Singapore Family Planning and Population Board • Sources: Poster on family planning, Family Planning / Sterilization information service, The National Health Education Department, Ministry of Health. 10
  • 11. Facing the future threats of ageing population (cont.) • Slow population growth Number of babies born in Singapore, 1960 – 2000 Source: yearbook of statistics Singapore 2001, Singapore department of Statistics. Average age at first marriage was 30.7 for grooms & 27.6 for brides Source: The population in Singapore by Saw Swee Hock 1999, Institute of Southeast Asian Studies, and Department of Statistics. 11
  • 12. Facing the future threats of ageing population (cont.) • • • • • • • • Problems of population growth Shortage of man power  fewer of young worker. Poor development. Policies to increase population growth (1987) Promoting larger families  to have more children's. Attracting foreign talent. Create more job and increase productivity. More MNCs come to invest in Singapore. Year Total population (million) Resident population (million) Total* population growth (%) Resident population (%) 1980 2.41 2.28 1.5 1.3 1990 3.05 2.74 2.4 1.8 2000 4.02 3.26 2.8 1.8 * Average annual growth rate Singapore population size and growth, 1980 – 2000. Sources: yearbook of Statistics Singapore 2001, Singapore Department of Statistics. 12
  • 13. Singapore’s ageing population • Quick fact – In 2000, only one in 14 Singaporeans was aged 65 and above. By 2030, one in five will be aged 65 and above. – By 2030, these Singaporeans will be among those aged 65 years and above. – The proportion of young people is shrinking in 1970, this resulted in a relative increase in the proportion of senior citizens. – Singaporeans are living longer than before. • Why the population is ageing? – Good healthcare and service and protection for its people. – High standard of living. 13
  • 14. Singapore’s ageing population (cont.) • Impact of an ageing population – Demand for healthcare and social services  more community based services. – Strain on working people. – According to the Prime Minister Goh Chok Tong: “It would be a disaster if companies and young workers have to be taxed heavily to support the large number of senior citizens in Singapore.” • Preparing for an ageing population – – – – – Many helping hands approach. Individual responsibility. Family care. Community help. Government support. 14
  • 15. The Education 15
  • 16. Education in Singapore • Human resource as the most important resource • Value education as development of the resource • Challenge for 1960s to 1970s – availability of infrastructure / fostering social cohesion • Problem of language barrier – mother tongue • Solution? Transition to English as medium of instruction 16
  • 17. Education in Singapore (2) • Common Examination (PSLE) – centralization of syllabus first • 1960 “Integrated school” – different races in the same school • Promote interaction • Secretly, what is the true intention of the government???? Let’s get Realist 17
  • 18. Education in Singapore (3) • See the movement here……in 1966, bilingualism was compulsory • Reduced role of Mother tongue languages • Positively – development without forgetting its root • Singapore “Asian value” – obedience • Exhibited in “Caning” • Syllabus to suit the country’s demand – use as people as tools? 18
  • 19. Education in Singapore (4) • School dropout problems – ‘wastage’ • Adjusting to the learning needs – 1980 Streaming in primary 4 • Hierarchy even in education? • Seen to be premature/ limit capabilities’ development • Useful and Useless students Questions 19
  • 20. Education in Singapore (5) • 1993: change the streaming to be conducted at secondary 1 • Cultivating nationalism – preventing emigration • Community Involvement Program (CIP) – social responsibility • Stress! Stress! Stress! • Do you want to study there???? 20
  • 21. Education in Singapore (6) • Improvements • Integrated Program (IP) – can move on to sit for GCE ‘A’ level without taking ‘O’ level before began in 2004, now considered under experimental stage’ • Quality Assurance Framework, especially towards independent schools 21
  • 22. 22
  • 23. Healthcare Service 23
  • 24. 24
  • 25. Health care service • Initial stage – 1960s “Keep Singapore Clean” campaign • Instability of autonomy under the British • 1970s – specialization – replacing traditional dispensaries • Say “No” to being Welfare state • “Horror” of British welfare state – “Why Work attitude” and “National Burden” 25
  • 26. Health care service • The government will help, but not entirely provide medical care. • Three schemes Medisave (compulsory) - 6-8% from salary = forced saving Medishield (voluntary) - insurance plan • Can secure votes without taking away people’s incentive to work 26
  • 27. Economic Development 27
  • 28. Quest for development strategy • Geographical factor: located on international marine time trade (Malacca strait) give the competitive advantage for logistic of goods and services. • Poor fundamental factors in term of – small land resource and too low quantity of resource mean • limitation of development for agriculture sector and heavy industry sector. – small number of population = limited domestic market (small market). • Policy for export-oriented (for economic of scale) and investment incentive: – Government subscribed to policies which promote: • macroeconomic stability (sound fiscal, low inflation rate, positive real interest rate) • low intervention in price of goods and service (liberalized foreign trade policies and exchange rate policy which avoid adjustment for irrational value that would easily cause damage). – Another essential element for increasing investment incentive included educated human capital (high capacity human resource) and tax incentive policies. 28
  • 29. Tax Policy • • • Surplus budget (except 1986, 1987 and 2009) and High RPE (relative political extraction) Ratio of total tax revenue to total revenue continue to decline from 72% (1960) to 58% (2011) CPF (Central Provident Fund) saving & reduce of social security spending. The Selective Economic Indicator of Government Sector: Singapore 1960, 1970, 1980, 1990, 2001, 2008-2011   1960 1970 1980 1990 2001 2008 2009 2010 2011 Deficit (-)  or Surplus (million S$) 67.90 199.20 320.70 3167.60 7442.70 24100.10 -4357.60 15433.60 26624.80 Total  Government  Expenditure (million S$) 243.40 1019.90 5170.70 13257.10 51065.40 89434.40 47094.20 79522.20 105705.60 Source: Singapore Year Book of Statistic, Singapore Department of Statistics Total  Government  Total  Revenue Tax Revenue (million S$) (million S$) 311.30 224.30 1219.10 857.10 5491.40 4087.00 16424.70 10354.00 43622.70 25108.90 65334.30 37518.60 51451.80 35272.40 64088.60 40662.20 79080.80 46171.80 Total Tax Revenue /  Total Revenue  % 72.05 70.31 74.43 63.04 57.56 57.43 68.55 63.45 58.39 29
  • 30. Tax Policy (con.) • Tax reform and tax incentive program – lower the rate for corporate tax & Customs/excise • Changes in revenue from total tax revenue – Lower customs / excise: 45% (1960) to 4% (2011) – Higher income tax (but stagnant): 33% (1960) to 45% (2011) – Rapidly Higher GST (Goods & Service Tax) or VAT: 0% (1960) to 18% (2011) The percentage of taxes in total tax: Singapore 1960, 1970, 1980, 1990, 2001, 2008-2011 Income Tax   Asset Taxes Motor Vehicle Taxes Customs/ excise Stamp Duties Other duties GST Betting Tax 1960 33.90 4.30 2.90 45.90 1.60 11.30 - - 1970 29.30 13.70 7.00 33.30 2.70 14.00 - - 1980 46.40 13.60 11.90 16.40 4.00 7.60 - - 1990 47.40 10.70 12.90 12.60 6.30 11.70 - - 2001 53.62 6.75 9.85 7.33 3.33 4.84 8.02 6.27 2008 49.47 7.71 5.34 5.55 4.90 4.63 17.68 4.74 2009 47.87 5.68 5.07 5.90 5.64 6.15 18.80 4.89 2010 44.95 6.39 4.65 5.14 7.62 7.10 18.93 5.21 2011 45.43 8.26 4.05 4.56 7.06 6.26 19.31 5.07 Source: Singapore Year Book of Statistic, Singapore Department of Statistics 30
  • 31. Tax Policy (con.2) • Tax option for government as GST allow government to gain more revenue from tax and also able to avoid the side effect of taxation toward private sector investment, purchase of technology and export oriented industry. • Thus, consumption for investment in productive capacity of producer side would be except from GST. By having GST also widen the taxation payer’s base and avoid the potentials of tax escaping. 31
  • 32. Fiscal Policy • There’re 2 types of macro-economic policy: – Short run policy as stabilization tool (to respond toward aberration from desire rate of growth) • Limited role due to real balance effect – large amount of wealth was stagnated in CPF (Central Provident Fund) = government spending owned narrow scope of effect. – Increasing bond & surplus budgetary = shortage of money supply • Effective role in area of stable currency – Large amount of foreign reserve – Long run policy as economic growth stimulus tool (to stimulus the growth of output) • ‘Saving aspect’: Fiscal policy has been focus on building domestic revenue while restrict expenditure. • Spending on capital project: focus on future return of capital gains and revenue from investment. 32
  • 33. Sustain Economic Development in 21 st cen. 33
  • 34. 8 Economics strategies 1. Diversify the economy. 2. Shifting from technology base towards a knowledge based economy. 3. Promoting manufacturing and service as dual engines of growth. 4. Building an IT infrastructure. 5. Moving toward regional and global. 6. Developing local talents: entrepreneurship and technopreneurship. 7. Promoting research and development (R&D) 8. Attracting foreign talents 34
  • 35. Provision of Housing 35
  • 36. Housing Program and role of state • Housing is considered as the basic need for people. Proper housing for population can also be considered as essential element in the role of state. • It’s government that functions as land allocator for proper use of land for citizen welfare and efficiency allocation. • Public housing program would be an important tool to maintain the social harmony and stability of country. 36
  • 37. Destitute physical condition of Singapore Island • Population: 5.3 million people • Area of 697 sq. km (with land of 687 sq. km). • Population density: 7792.56 persons per square km. • With this high of population density, land resource becomes rare. 37
  • 38. HDB and Public housing program • After PAP (People’s Action Party) won the election of 1959 with campaign on new public housing policy. • The Housing & Development Board (HDB) was found in 1960. • HDB is the government body that takes care of housing and improving the living conditions for the population. • High-rise flats: enable most efficient use of land. • "new town“: composes of most separate facilities that can provide you from education to job (industrial estates). 38
  • 39. Home ownership and financial security • Home ownership as a must for economic development: ownership of house becomes essential factor for each individual financial security. • From rental purpose only toward Home Ownership Scheme: allowed and encouraged Singaporean citizen to gain their ownership of their HDB flat unit by giving the incentive for poor citizen with discount price (from CPF and government subsidies). • Nowadays, the successful of HDB was highlighted by the highest-ownership at 92%. (WDR 2009) 39
  • 40. Singapore Foreign Policy 40
  • 41. Singapore Foreign Policy • Diplomatic relations with 175 countries • Member of United Nation(117th), the Common Wealth(22nd) Non-aligned movement, ASEAN, WTO, APEC, etc. • International cooperation with countries in several sorts of relation in shapes and forms such as military, trade, and etc. • Most importantly, ensuring that its actions do not exacerbate its neighbors' insecurities. • Aim at maintaining friendly relations with all countries 41
  • 42. Foreign Relations on individual state and international organizations • Toward UN • Toward neighboring countries – Indonesia – Malaysia – others • Toward China • Toward United States 42
  • 43. The role of Singapore on ASEAN • A co-founder of ASEAN in 1967 • has played an active and constructive roles in ways, shapes, and forms such as supporting of ASEAN free trade agreement, solving the conflict by peaceful settlement, and so forth • Former prime minister Goh Chok Tong proposed the idea of founding of ASEAN economic community(AEC) in 2007 • Is the strongest supporter of AEC formation. 43
  • 44. ‘ There is no law of nature which provides that life will get better for Singapore next year. We have to work to make it better. PM Lee Kuan Yew May Day Message, 1986 ’ 44
  • 45. Q&A 46
  • 46. RISEWWII ashes to a great Phoenix OF SINGAPORE From NOV 15, 2012 PO371 SOUTHEAST ASIAN AFFAIRS 47