SINGAPORE Path to Development

Singapore Today
Population 4.5 million
Fertility rate of 1.07 children (3rd lowest in world) Govt planning growth to 6.5 million by 2020

Size 270 sq. miles (704 km2)

Worlds second most dense country

Ethnic background of population

Chinese (75%), Malay (14%), Indians (9%)

Official languages
English, Mandarin, Malay, Tamil

Early History
Second Century AD First evidence of human settlement Became an important trading post
Declined after 1400 Sacked in 1613 by Portuguese Reverted to a fishing village with few inhabitants until 1819
Sumatran Srivijaya empire 1000-1400 Called Temasek

History from 1819

1819 Britain established a trading post on Singapore Island
Sir Thomas Raffles, East India Company Free port (no tariffs) largely entrept port Spices, rubber, palm oil; goods from China, Indonesia, Malaya

Quickly become an important trading port in SE Asia

Principal British presence in SE Asia

Raffles Plan for Singapore (1822)

World War II
British believed in Fortress Singapore Japanese invaded Malaysia on 8-Dec-41
Leap-frogged down Malay Penisula Light tanks and bicycle infantry

Singapore surrendered on 14-Feb-42

Harsh 3 year Japanese occupation 5-25,000 Chinese Singaporeans executed

Japanese surrendered on 15-Aug-45

British returned to Singapore on 9-Sep-45

Post-WWII Events
1955 Partial internal self-government
Increasing social unrest, anti-colonial feelings Hock Lee bus works strike and riots (1955) Chinese Middle School riots (1956)

1959 Full internal self-government

Peoples Action Party (PAP) sweeps elections to Legislative Assembly (41 of 53 seats) Lee Kwan Yew becomes Prime Minister

PAP (Peoples Action Party) Initiatives (early 1960s)

Trade unions consolidated into one
National Trades Union Congress (NTUC) Strong government oversight

Education system revamped

Create a skilled workforce English chosen as language of instruction

High-rise low-cost housing blocks

25,000 apartments in first 2 years

Economic Strategy 1960-80s

1960s Focus on low-cost manufacturing 1970s Focus on labor skills & technology
Machine tools, petrochemicals, electronics, and precision work

1980s Capital intensive high tech

Computers & peripherals; electronic medical instruments; automotive components; specialty chemicals & pharmaceuticals; optical & photocopying equipment

Economic Strategy 1990s

Manufacturing and Services Transformation from a production-driven to innovation-driven economy Focus on education and human resources Film, media, and publishing, arts and entertainment, textile, fashion and design sectors Outsourcing of manufacturing to low-wage sites in Indonesia and Malaysia

Economic Strategy 2007

Global Hub for business and finance, logistics & distribution, communications and information
Key economic activities increasingly concentrated in a few strategic centers Hub services extended hinterland

Heavily investing in humans & infrastructure

Education, training, and industrial relations Airport, seaport, telecommunications network, biotech, financial and industrial facilities

Regional investment
Malaysia, Indonesia, China, India, Vietnam

THE ASIAN FINANCIAL CRISIS

(1997-1998)

In the early 1990s, flood of foreign capital flows into Asia. Short-term foreign currency-denominated loans were used to finance longer-term infrastructural projects. When current account deficits ballooned, MASSIVE CAPITAL FLIGHT force Asian currencies to devaluate while stock markets plummeted.
Exposed The WEAKNESS of

Singapore Fundamental Economics

Forced the GOVERNMENT to
Their Economics

Restructure, Liberalize and Reform

THE ASIAN FINANCIAL CRISIS

DECEMBER, 2001

THE ECONOMIC REVIEW COMMITTEE

CHAIRMAN : DEPUTY PRIME MINISTER (FINANCE MINISTER) MEMBERS
-The Chairman of the Economic Development Board, -The Secretary-General of the National Trade Union Congress, -The Chairman of the Singapore National Employers Federation, -Prominent CEO from Private Sectors

THE ERC REPORT

Singapores successful growth model of the past twenty years WASNT GOING TO BE SUFFICIENT for the future growth.

(Short-Term and Long-Term) Improve the relative COST POSITION OF COMPANIES OPERATING IN SINGAPORE Expanding ECONOMIC TIES WITH COUNTRIES IN THE WIDER REGION (India, China, Japan and Australia) to enhance Singapores economic growth.

RECOMMENDATIONS

GOVERNMENT ACTIONS (1)

Singapore signed FREE TRADE AGREEMENT with various countries (United States and other countries) Singaporean Government-Linked Companies (GLCs), including TEMASEK HOLDINGS, became more active investing abroad Established WORKFORCE DEVELOPMENT AGENCY to lead efforts to upgrade workers skills and THE SKILLS REDEVELOPMENT PROGRAM (SRP) tp subsidized employers cost of sending their workers for training. Launched NATIONAL RESEARCH FOUNDATION to further develop the countrys IT infrastructure and the use of e-services by government.

GOVERNMENT ACTIONS (2)

The Ministry of Information, Communications and the Arts (MICA) mounted a plan to transform Singapore into a VIBRANT GLOBAL CITY FOR INFORMATION AND THE ARTS.

Turn entire downtown MARINA BAY AREA into an exciting environment and became one of the most visible symbols of the economic transformation
Employers contribution to CPF cut to 9%-13%; monthly salary cap for computing contribution reduced from $6.000 to $4.500; Income tax rate reduced from 26% to 21%; Tax were shifted to a goods and services (VAT), from 3% to 7%; corporate tax was reduced to 20%; etc

IMPACT : SINGAPORE (2008)

Average real GDP was positive Labor productivity grew at compound average rate 1,5% Trade grew to $338 billion in exports (increase 88% relative in 2004) Inward FDI flows reached $22,7 billion in 2008 (up 13,3% from 2004)
47,940

50,000 37,500

GNI Per Capita, 2008 .

28,120

43,960

25,000

13,740
12,500 Singapore Malaysia Indonesia Thailand South Korea Hong Kong

3,830

5,990

SINGAPORE NEXT STRATEGY

Singaporean economy consisted of a PORTOFOLIO CLUSTERS that had evolved over time. Traditional strengths were in areas like : 1. Petrochemicals, 2. Transportation and logistics, 3. Finance, 4. Information Technology. Singapore Government develop new clusters : 1. Tourism, 2. Education, 3. Biopharmaceuticals OF

PETROCHEMICALS
The Chemical Process Technology Centre (CPTC) and the Institute of Chemical and Engineering Sciences (ICES), had been set up to provide staff training and research expertise in petrochemical. The petrochemical cluster had been a major part of the Singapore economy (top three oil refining centres in the world) since Sheel built the countrys first oil refinery in Jurong Island in 1961 and accounted for 10,3% of Singaporean industrial output and third largest manufacturing sector in Singapore

FINANCIAL SERVICE
The Financial Industry Competency Standards (FICS), Sept 2005 and June 2006, To increase the supply of skilled workers in the Financial Service Industry by scholarship programs. The Financial Service Industry accounted for 13% to Singapores GDP in 2008 but have had increasingly short supply for skilled workers.

TRANSPORTATION & LOGISTICS

The NOL, majority owned by Temasek Holdings, was among the largest shipping lines in the world (market share 3,6% in 2007), Changi airport rangked close to the top twenty by passanger volume.

INFORMATION TECHNOLOGY
The Infocomm Development Authority (IDA), regulating telecommunications and promotin ICT usage and The Media Development Authority (MDA), supporting content development across different media platforms, promoted investments in digital media and animation courses.

Information technology services and electronics manufacturing accounted for 8,9% of GDP.

NEW CLUSTER DEVELOPMENT

Biopharmaceuticals, had begun in Singapore in the 1970s. The EDB worked with multinationals to develop a 10years roadmap for development, including the contruction of an Academic Centre of Excellene for Discovery Research In Tourism, $100 million had been committed in 2003 to enhance infrastructure and market, by the campaign the Uniquely Singapore Become a global education hub. In 2004, the Singapore Education Service Centre was set up as a one-stop centre for foreign students in Singapore.

THE GLOBAL FINANCIAL CRISIS

(2008)

Singapore was the first Asian country to enter a recession as the result of global financial crisis. Established THE ECONOMIC STRATEGIES COMMITTEE (ESC), chaired by Minister of Finance and comprised of 25 members drawn from government, unions and companies. The OBJECTIVE was to provide recommendations on how to support sustainable future growth