The document compares the economies of Singapore and Malaysia and analyzes their strategies and challenges over time. It discusses: 1. Singapore achieved rapid economic growth through strategic government policies that attracted foreign investment, developed infrastructure, and mobilized human capital. 2. Malaysia transitioned from an export-based economy focused on raw materials like tin and rubber to industrialization in the late 20th century. It aimed to diversify its economy and reduce dependence on commodity exports. 3. Both countries face ongoing challenges in maintaining competitiveness against rising economies like China and India, and in addressing issues like aging populations and low birth rates. They continue investing in high-tech industries and developing skilled workforces.

1. RELATIONSHIP COMPARISON BETWEEN TWO COUNTRY AND HYPOTHESIS ANALYSIS
PRESENTED BY
DENZIL
KEVIN
KUNAL
SINGAPORE & MALAYSIA

2.  The English name of Singapore is derived from the Malay word, Singapura
 Derived from (literally Lion City), hence the customary reference to the nation as the Lion City.
 Singapore’s annual GDP growth rate from the 1960s to the 1990s has averaged about 8%, more than
three times of the US growth rate
 Currently, Singapore ranks as the top Asian country with the highest standard of living.
 About 90% of Singaporeans live in proper houses with modern facilities, while the city itself is
virtually slum-free
 It is also a base of more than 3000 multinational companies from the developed world
 All of these achievements have been realized in a country that is no more than 685 sq. km and with
no fortunate endowment of any natural resource.
 How is it possible then for Singapore to attain and maintain such amazing economic growth as it has
experienced over the past forty years?

3. STRATEGIC ANALYSIS OF SINGAPORE.
 Singapore’s economic strategies can be summarized into three basic categories
1. The government’s strategic role.
2. Mobilization of its human capital.
3. Continuous development of infrastructure.
 Together, these three factors contributed to the high level of economic achievements that
Singapore has enjoyed for the past four decades. Yet, a variation of these three factors was
specifically used in the different periods from the 1960s onward.
 In the early period, Singapore used its sufficient physical infrastructure as well as the semi-
skilled workforce to attract foreign investors to the island.
 In both periods, the role of the government institutions has been crucial. The government has
adopted different policies to suit the different needs of the Singaporean economy, which would
attract continuous foreign investment and thus, maintaining Singapore’s economic excellence.

4. WHAT WAS THE MAIN ECONOMIC CHALLENGE?
 The main challenge for Singapore in its early years was to overcome its high
unemployment problem.
 The Singapore government understood that the only way to increase employment
was through extensive growth in its manufacturing industries. But in its early years,
the economy was still too dependent on the ENTREPOT trade for the East India
company and as a result, the manufacturing sector was undeveloped.
 The Economic Development Board (EDB) was established in 1961 with the main
purpose of attracting foreign capital to enter the Singapore market.
 Singapore’s GDP grew at a relatively high average of 6% per year. In the same
period, the manufacturing share of the GDP grew from about 10% in 1960 to about
15% in the late 1960s.
• Similar to the 1980’s, the main challenge of Singapore’s economy in the 1990s was
to ensure that the nation would adopt high-technology..

5. WHAT DID THE GOVERNMENT DO TO IMPROVE THE
ECONOMY?
 The 1990s continued high spending by the Singapore government in efforts to develop the high
technology of the country.
 Another important strategy adopted by Singapore realization of a need to expand its economic
activities in the region.
 The Singapore-Johor-Riau (SIJORI) growth triangle was initiated in the early 1990s to relocate
Singapore’s investments in manufacturing to the nearby areas of Johor in Malaysia and the
Bintan and Batam islands of the Riau province in Indonesia.
 Malaysia and Indonesia would benefit from the initiative because of the infrastructure
development, economic growth, and lessons from Singapore’s financial expertise as spillover
effects in both places.
 Under the agreement, Singapore would provide the network and financial services for foreign
investors to set up their manufacturing bases in both Johor and Riau. The state of Johor and the
province of Riau would provide tax and financial incentives for foreign firms to relocate their
manufacturing bases from Singapore

6. WHAT ARE THE KEY INDUSTRY NETWORKS IN SINGAPORE?
 Manufacturing
 Electronics
 Chemicals.
 Engineering
 Biomedical Manufacturing
 Construction
 Wholesale and Retail Trade.
 Financial Services
 Business and Other Services
• business services include that of legal, accounting, architectural & engineering
activities, business management consultancy, business representative, advertising,
labor recruitment, event management and building cleaning.
 Transport and Communications
 Hotel & Restaurants

7. WHAT ARE SINGAPORE’S CURRENT CHALLENGES AND PLANS?
 With the emergence of India and China as main economic players in the global economy,
Singapore’s strategy to maintain its economic competitiveness is to continue its transformation into
a high-technology economy.
 Among the latest in Singapore initiatives is the formation of the One-North technological park for
R&D and biomedical science, a vision of Singapore to lead the world in the future of biomedical
scientific research in the 21st century.
 The Singapore government is committed to spend billions of dollars in the next 15 to 20 years in
order to expand the new technological complex.
 From 2000 onwards, the Singapore government has continued its negotiations into forming bilateral
trade relationships,
 The two main problems from Singapore’s demography are its graying population and low fertility
rate.

8. CONCLUSION
• The government and the people of Singapore have realized that Singapore depends primarily
on its human resources and secondarily on the resources of foreign investors.
• As such, both the government and the people have worked together throughout the years to
ensure that Singapore’s economy remains competitive. With relatively stable governments
from 1960 onward, Singapore has been able to attract foreign investors, from which it gains the
crucial financial capital for its economic progress.
• Many skeptics have often cited that the small size of Singapore makes it easy for the
government to implement state-planned economic strategies, something that is often tough to
do in other bigger developing nations.

9.  Malaysia is a federation of 13 states.
 The Federation of Malaysia, formed in
1963, originally consisted of Malaya,
Singapore, Sarawak and Sabah.
MALAYSIA

10. CONTINUED..
 Due to internal political tensions Singapore was obliged to leave in 1965.
 Malaya gained independence in 1957, Sarawak and Sabah (the latter known previously
as British North Borneo) in 1963, and Singapore full independence in 1965.
 The Government system is a constitutional monarchy.
 Malaysia shares world’s lowest death rate of respiratory diseases.
 Life expectancy:
 In 1957 – 55.8 years for men
58.2 years for women.
 Today – 71 years for men.
74 years for women.

11. INTRODUCTION OF MALAYSIAN ECONOMY
 Since Malaysia’s independence, it’s economic performance has been one of Asia’s best.
 Performance peaked in the early 1980s through the mid 1990s.
 Malaysia today is a middle-income country with a multi-sector economy based on service and
manufacturing.
 Malaysia is one of the world’s largest exporters of:
 Semiconductor components and devices
 Electrical goods
 Solar panels
 Information and Communication Technology (ICT) products.
 Tin & rubber.

12. CULTURE, HISTORY & SOCIETY
 The current population in Malaysia is around 28 million (23 million live in Peninsular Malaysia.)
 The local population is 67 percent.
 Bahasa Melayu is the official national language of Malaysia.
 Religion plays a vital role in Malaysian life
 61% are Islam
 19% are Buddhists
 9% are Christians
 6% are Hindus
 After several centuries dominated by Buddhism & Hinduism, Islamic conversion began in
Malaysia in the early 14th century.

13.  Tin
 Besides ample land, the Malay Peninsula also contained
substantial deposits of tin. International demand for tin rose
progressively in the 19th century due to the discovery of a more
efficient method for producing tinplate.
 Rubber
 While tin mining brought considerable prosperity, it was a non-
renewable resource. In the early 20th century it was the agricultural
sector which came to the forefront.
 By 1921 the rubber acreage in Malaysia (mostly in the Peninsula)
had reached 935 000 hectares (about 1.34 million acres) or some
55 percent of the total in South and Southeast Asia while output
stood at 50 percent of world production.
THE TRANSITION TO CAPITALIST PRODUCTION

14. BENEFITS AND DRAWBACKS OF AN EXPORT ECONOMY
 Prior to World War II the international economy Malaysia’s place was as a leading exporter of raw
materials (tin, rubber, timber, oil, etc.) and an importer of manufactures.
 Malaysia depended heavily on earnings from exports of primary commodities to maintain the standard
of living
 Rice had to be imported (mainly from Burma and Thailand) because domestic production supplied on
average only 40 percent of total needs
 Immediately following World War I there was a depression from 1919-22. Strong growth in the mid and
late-1920s was followed by the Great Depression (1929-32). As industrial output slumped, primary
product prices fell even more heavily.

15. WHY NO INDUSTRIALIZATION?
 Malaysia had very few secondary industries before World War II.
 The little that did appear was connected mainly with the processing of the primary exports, rubber
and tin, together with limited production of manufactured goods for the domestic market (e.g.
bread, biscuits, beverages, cigarettes and various building materials).
 Much of this activity was Chinese-owned and located in Singapore (Huff, 1994).
 Among the reasons advanced are; the small size of the domestic market, the relatively high wage
levels in Singapore which made products uncompetitive as exports, and a culture dominated by
British trading firms which favored commerce over industry.
 Overshadowing all these was the dominance of primary production. When commodity prices were
high, there was little incentive for investors, European or Asian, to move into other sectors.

16. AIMS OF INDUSTRIALIZATION AND THE NEW
ECONOMIC POLICY 1970-90
 To redistribute corporate equity so that the bumiputera share would rise from around 2 percent to
30 percent. The share of other Malaysians would increase marginally from 35 to 40 percent, while
that of foreigners would fall from 63 percent to 30 percent.
 To eliminate the close link between race and economic function (a legacy of the colonial era) and
restructure employment so that that the bumiputera share in each sector would reflect more
accurately their proportion of the total population (roughly 55 percent).
 In 1970 this group had about two-thirds of jobs in the primary sector where incomes were
generally lowest, but only 30 percent in the secondary sector. In high-income middle class
occupations (e.g. professions, management) the share was only 13 percent.
 To eradicate poverty irrespective of race. In 1970 just under half of all households in Peninsular
Malaysia had incomes below the official poverty line. Malays accounted for about 75 percent of
these.

17. THE NEW DEVELOPMENT POLICY
 Followed in 1991 by the New Development Policy (NDP),which emphasized assistance only to
“Bumiputera with potential, commitment and good track records” (Malaysian Government, 1991, 17)
rather than the previous blanket measures to redistribute wealth and employment.
 In turn the NDP was part of a longer-term program known as Vision 2020. The aim here is to turn
Malaysia into a fully industrialized country and to quadruple per capita income by the year 2020.
 This will require the country to continue ascending the technological “ladder” from low- to high-tech types
of industrial production, with a corresponding increase in the intensity of capital investment and greater
retention of value-added (i.e. the value added to raw materials in the production process) by Malaysian
producers.
 The Malaysian economy continued to boom at historically unprecedented rates of 8-9 percent a year for
much of the 1990s (see next section).
 There was heavy expenditure on infrastructure, for example extensive building in Kuala Lumpur such as
the Twin Towers (currently the highest buildings in the world).
 The volume of manufactured exports, notably electronic goods and electronic components increased
rapidly

18. OPINION ON MALAYSIA ‘S ECONOMY
 Malaysia owes its successful historical economic record to a number of factors.
 Geographically it lies close to major world trade routes bringing early exposure to the international
economy.
 The sparse indigenous population and labor force has been supplemented by immigrants, mainly
from neighboring Asian countries with many becoming permanently domiciled.
 The economy has always been exceptionally open to external influences such as globalization.
 Foreign capital has played a major role throughout. Governments, colonial and national, have aimed
at managing the structure of the economy while maintaining inter-ethnic stability.
 Since about 1960 the economy has benefited from extensive restructuring with sustained growth of
exports from both the primary and secondary sectors, thus gaining a double impetus.