REMAKINGSINGAPORE

Singapore

GDP1965 1989 2008

$500 $10,000 $37,597

Continued Change

Leader

Origins of Modern Singapore

• 14th century : “Singapura”

• In 1819 : Found by Sir Stamford Raffles

• Location : At the end of the Strait of Malacca

• 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

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.

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.

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.

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 19602. Economic Development Board (EDB) in 1961

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.

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.

• 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

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.

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

Singapore National Cluster Export Portfolio, 2001 to 2007

• 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

Dealing with external shocks: 1997 to 2003Asian 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

Singapore Maturing : 1991 to 2008• 9/11, terrorist attack in New York in 2001

• In March 2003, the spread of SARS virus worlwide

The Economic Review Committee

Vision “ Dynamic Global City-state with an entrepreneurial & diversified economy “

Short Term

Long Term

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.

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