HBS Case Study-Singapore Remaking Singapore

1. REMAKING
SINGAPORE

2. Singapore
GDP
1965 1989 2008
$500 $10,000 $37,597
Continued Change
Leader

3. Origins of Modern Singapore
• 14th century : “Singapura”
• In 1819 : Found by Sir
Stamford Raffles
• Location : At the end of the
Strait of Malacca

4. • Britain made Singapore as an important trading center and port with
policy of duty free trade which proved beneficial.
• Singapore developed a classic entrepot economy, which funneled exports
and imports to surronding region, mostly tin and rubber from Malaya.
• During World War II, Singapore was tranformed into Britain’s principal
naval and air base in Asia, got captured by Japan in 1941, and backed to
Britain in 1945 with devastation condition.
• Singapore reconstruction took 4 years, in 1949 Singapore condition
returned to pre-war levels.
Origins of Modern Singapore

5. The End of British Rule:1958-1964
• In 1946 Singapore became a separate crown colony with a civil
administration and its gradually increase Singapore self goverment.
• First election was held in 1948
• Full sovereignty was granted in 1958, and the People’s Action Party
(PAP) headed by Lee Kuan Yew winning the election.

6. The End of British Rule:1958-1964
• In 1963 Singapore gained independence from Britain and became a
part of the Federation of Malaya or Malaysia.
• In 1965 Singapore separated from Malaysia.

7. Creating an independent
Singapore: 1965-1970
• In 1965, Lee Kuan Yew became Singapore’s first Prime
Minister and his People’s Action Party (PAP) winning
all seats in parliament.
• New Policy to create a Singaporean identity that would unite the country’s
diverse ethnic groups (62% Chinese, 16% Indians, 14% Malays, 8% Others)
– Four official languages (English, Malay, Mandarin Chinese, Tamil) was taught in
school.
• Orderliness and cleanliness were hallmark of the new Singaporean society,
and strictly enforced by the goverment.

8. Creating an independent
Singapore: 1965-1970
• Singaporean newspapers and television stations routinely supported the
government.
• Singapore’s political and business elite formed a rigorous meritocracy.
• To create jobs and provide housing, government create two boards.
1. Housing Development Board (HDB) in 1960
2. Economic Development Board (EDB) in 1961

9. Creating an independent
Singapore: 1965-1970
• Singapore welcomed foreign direct investment.
• World trade and investment flows were booming in the 1960s and early
1970s.
• Government-Linked Companies (GLCs) were formed
• Keppel, Sembawang, Jurong Shipyard for ship building and repairing
industry
• Neptune Oriental Lines (NOL) for shipping line
• Singapore Refining Company, an oil joint venture company togehter with
Caltex and BP.

10. Becoming an Asian Tiger
• 1960 – 1965: GDP Growth 5.8%
• 1966 – 1973: GDP Growth 12.9%, the highest rate in the world due to
foreign investment inflow, export-oriented manufacturing and external
trade all grew rapidly.
• Monetary policy:
• Maintenance of very low inflation
• Keeping its foreign exchange rate a level below IMF standard
• Port of Singapore, as world’s fourth busiest, became the most important
income for government  first priority
• British navy refueling facilites were transformed into the
largest petroleum refining center in Asia.

11. • In 1973, peak of an economic boom, guest unskilled workers appeared.
• Shortly after, first international oil shock was happened.
• Two digit growth of GDP ended
• Real GDP growth fell from 11.2% to 6.1%
• Compounded annually from 1973-1979, economy grew at 7.1%, far
exceeding world average
• The policy hope would encourage Singapore’s factories to shift to higher
technology, higher productivity product. The reason is because
goverment belief that manufacturers would not relocate all operations
to other countries with lower labour cost.
• The large wage increase impacted on the real GDP of
Singapore grew 8.4% from 1980 – 1984.
Becoming an Asian Tiger

12. Recession and Reform
1985 : GDP dropped to 1.4%
• Unemployment
• Weak external demand
• Low profit
• Much-reduced investment in manufacturing
Caused by;
Depressed
international
market for oil
Structural
deficiencies in
economy
Low-
productivity
with the rising
wages
1988 : High export growth and Domestic demand led to
11.5% of growth, the highest rate in 15 years
1992 : Government linked Companies to operate key
infrastructure, such as Singapore Airline, Singapore Telecom
account 20% of GDP.

13. Recession and Reform
GDP at the end of Decade is 28% and employed 11%
• Oil installation in refining capacity [ The third in the world)
• “Changi Airport”– The world best airport for 3 years
• Singapore airline – the best airline in the world, with the most profitable
A Global Role Model

14. Singapore National Cluster Export
Portfolio, 2001 to 2007

15. • Goh’s Government with “Next Lap”
• Long-run social and economic goals – achieving a U.S. level per capita
standard of living in 2030
Singapore Maturing : 1991 to 2008

16. Dealing with external shocks: 1997
to 2003
Asian Financial Crisis led
to :
• Exchange rate and
stock market fell by
16% (and 54% -- July
1997)
• Unemployment rose
from 1.7% to 2.5%
• Weak regional demand
Singapore handled by :
• Reduced business cost
• Maintain investor confidence
• Continue to build up people’s
capabilities to ride out
economic storm
• Solidify Financial system
• Developing market to export
• Form strategic alliance with
regional
• Opening IT to private sector
services

17. Singapore Maturing : 1991 to 2008
• 9/11, terrorist attack in New York in 2001
• In March 2003, the spread of SARS virus worlwide

18. The Economic Review Committee
Vision
“ Dynamic Global City-state with an entrepreneurial & diversified economy “

19. Short Term

20. Long Term

26. Tourism
• In 2004 , Launch campaign “ The Uniquely Singapore” to increase
brand awareness
• 100$S million had been committed in 2003
• Key component was involving Singaporeans as brand ambassador.
• Collaboration in private sectors such as airlines , hotel , tour operators.
• Link with medical tourism cluster.

27. สมาชิกในกลุ่ม
No. Name ID
1 พิมพ์ประภาเอี่ยมกระสินธู 5620224036
2 ทยพร จันทรสงค์ 5620224053
3 ลลิตวดี มุ่งสมัคร 5620224060
4 นัทธมน วงศ์สวัสดิ์กุล 5620224073
5 จิรโชติ ธรรมจินดาพงษ์ 5620224074
6 ภัทร์ แผนสมบูรณ์ 5620224097
7 ศรายุแซ่ฉั่ว 5620224099
8 กิจจา แต่งสถิตย์ 5620224100
9 วีรยา ทนุพงษ์ 5620224102
10 กฤษพร หิรัญญโชค 5620224104
11 ศิริพร เจริญผล 5620224105
12 สุภาวดี ชนะโชติ 5620224112
13 นภัสสร สวนมาลา 5620224113
14 สุภวัช นวพักตร์พิไล 5620224176
15 จอมขวัญ สุวรรณเครือ 5620224118