Singapore has a long history as an important trading center dating back to the 7th century. It gained independence in 1965 and underwent rapid economic growth under the leadership of Lee Kuan Yew. The government pursued policies like creating statutory boards to develop infrastructure, implementing the Central Provident Fund, and attracting foreign investment to transition to an export-oriented economy. Singapore developed clusters in industries like petrochemicals, finance, logistics, IT, biopharma, tourism and education to become an Asian economic tiger with one of the highest GDP growth rates in the world by the 1970s and a highly developed economy by 2008.

1. Remaking Singapore
Syndicate 5

2. The History of Singapore
• Singapore was an important trading center and port as the 7th century and
by 14th century chinese immigrants has established a small community on
the island.
• Singapore location at one end of the strait of Malacca (Winston churcill
touted as “Gibraltar of the east”) and its policy of duty free trade proved
beneficial.
• Singapore developed a classic entrepot economy, which funneled exports
and imports to surronding region.
• The entrepot trade continues grown in singapore as the malaya become an
increasingly important producer of tin and rubber.

3. The period of 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 the PAP party (a group of anti colonial) winning
the election.
• The end of british rule was happened in 1958 after protests continued and
the Malayan Union had become the independent Federation of Malaya.
• Singapore GDP declined by 4% in 1964 after the Indonesia agent bombed a
Singaporean hotel and seized fishing boats ad a part of its “konforntasi”
with malaysia.

4. The period of 1965 - 1970
• Lee Kuan Yew became Singapore’s first Prime Minister and his PAP party swept
first election, winning all seats in parliament.
• Goverment set out to create a Singaporean identity that would unite the
country’s diverse ethnic groups.
• Orderliness and cleanliness were hallmark of the new Singaporean society, and
strictly enforced by the goverment.
• Singapore political and business elite formed a rigorous meritocracy, granting
advancement only to those with high test score and educational achievement.

5. The period of 1965 - 1970
• The Central Provident Fund (CPF) involved mandatory contribution from employers and
employees (initially 5% of salary) to increase the country saving rate and creating a long –
term stake of polpulation.
• For creating a job and provided housing, Lee’s goverment created 2 statutory board with
autonomy which called HDB and EDB in 1961. Followed by Public Utilities Board and The
Port of Singapore Authority in 1963.
• Lee’s goverment pursued an import substitution strategy. But the separation from
Malaysia rendered the strategy impractical and govement turn to a strategy of export-
led economic growth.
• The goverment also improve the andinvestment climate by managing excange rates
close to market rates, free convertibility of its currency, setting tarifs and duties on
export / import at low rates.

6. Becoming an AsianTiger
• Singapore’s real GDP growth accelerated to 12,9% in 1966 – 1973, which the
highest rate in the world. Foreign investment inflow, export-oriented
manufacturing and external trade all grew rapidly.
• Monetary policy since independence had emphasized maintenance of very low
inflation. Because the goverment maintain the convertibility of its currency.
• The stategic location became Singapore the world’s fourth busiest port. The
goverment viewed the port as its lifeline, devoting as much capital to the facilities.
• A large continent of foreign workers was admitted in the early 1970s, when labour
shortages began to appear. The goverment controlled the number of unskilled
workers to regulate wages and in 1973, at the peak of economic boom the number
of guest worker change frequently as the rule of goverment decided.

7. Becoming AsianTiger
• The Lee’s goverment responded to initiating a large wage increase in 1979.
The total impact on wages ranges between 14% and 20%.
• That 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.
• This cause the Real GDP of Singapore grew 8,4% from 1980 – 1984.

8. Recession and Reform
• In 1985 a deep recesion with declining 1,4% real GDP was accompanied by a
sharp rise in unemployment, weak external demand, low profit and much-
reduced investment in manufacturing.
• The 1979 overambitious wage policy impact the structural deficiencies in
the economy, growth of labour productivity hadn’t kept pace with the rising
wages, which had seriously eroded the nation’s cost position in Asian
economies.
• The economic recovery had been begun by the end of the year, which was
sustained in 1987, when the real GDP growth rate of 9,8% and in 1988 high
export growth and domestic demand led to 11,5% real growth.

9. Recession and Reform
• The strong world trade growth assisted the impresive performance of
Singapore such as:
a) The manufacturing sector led by electronic component grew by 9,5% in 1990
b) Singapore had become Asia’s third most important financial center.
c) Singapore also was the world’s third largest oil-trading center.
d) Chiangi airport was voted the world best airport for the third straight year.
e) Singapore airlines named the best airline in the world and profitable.
• Singapore tension with Indonesia and Malaysia had recede enough by the late
1980s for three countries to announce establishment of a “growth triangle”
(Singapore, Malaysia state of Johor and Riau islands of Indonesia).

10. Singapore Maturing : 1991 to 2008
• In the early 1991 Goh’s new goverment issued a long range plan calledThe
Next Lap which the plan plotted long run social and economic goals.
• During the 1990s, the Singaporean goverment implemented a number of
policy initiatives motivated by the experiences of recession in 1985 and
following up on the vision set out by “Next Lap”
1) EDB set the goal of attracting 500 world class companies to carry out HQ activities by
2010.
2) PSB was formed to identify and nurture promising SMEs to become Asian MNCs.
3) The “Thinking school, Learning Nation” program was launched to transform education
system.
4) Research centers and advanced training programs were launced in a number of areas
(development of “IT2000”)

11. Singapore in 2008
• By 2008, Economics of Singapore grew.This can be seen in the achievement
that had been reached :
 Singapore ranked 4th in the prosperity league of countries (behind Norway, but a head of
U.S. and Hongkong).
 The ratio of working age people to pensioners had dropped
 Labour productivity stood at 96% of the OECD average
 Singapore trade was well over 400% of GDP
 The world’s best environment in term of rules and regulation for conducting business
 Achievement on education and R&D areas
 Become home for a large number of Asian regional HQ for multinational companies

12. Singaporean Clusters
The Singaporean economy consisted of a portofolio of clusters that evolved
overtime.The clusters consist of 7 areas
 Petrochemical
This industry accounted for 10,3% of Singaporean industrial output  the 3rd largest
manufacturing sector.
 Finance
This industry contributed 13% to SingaporeGDP in 2008 (growth rate 7,3%).
 Logistics
The largest container port in the world (owned byTemasek Holding; 3,6% of market share).
 Information technology
IT services and electronics manufacturing accounted for 8,9% of GDP and employee more
than 90.000 workers.
 Biopharmaceuticals
The domination of production with the highest value added of all Singaporean non – oil export.

13. Singaporean Clusters
 Tourism
The “Uniquely Singapore” campaign and also tourism board invested about $90 millions to
entice visitors from target market.
 Education
Singapore was hoping to become a global education hub by setting up the Singapore Education
Services Center for foreign students in Singapore.