Economic ProblemsEconomic Problems

Nature of problemNature of problem• Lacked natural resources, such as rubber, palm

oil, and minerals like tin & gold

• The economy was not well diversified, largely dependent on entreport trade. This was insufficient to ensure Singapore’s continued growth.

• High rate of unemployment due to the increase in population growth during the post-war years.

Actions taken by Actions taken by GovernmentGovernment

• Provided incentives to MNCs from Japan, Western Europe and USA to set up factories in Singapore.

• Put in place high standards of public service, such as in security, health, education, telecommunication and transportation.

• Engaged Dutch economist Dr. Albert Winsemius in 1960 to advise Singapore on areas to focus and develop its strengths.

• For example, to develop export-led industrialization faster and stay ahead of other countries in the region.

Actions taken by Actions taken by GovernmentGovernment

• To facilitate large-scale industrialization, the government provided the key infrastructure, including an efficient port and good communication and transport systems, and putting in place a sound banking and financial system.

• Positioned Singapore as a stable and low-cost manufacturing export centre to attract investing MNCs.

ResultsResultsWhat did the government do and was it

successful?

• Succeeded in providing more jobs for the unemployed.

• By setting itself apart from other countries in the region, SG was better able to attract foreign investors and professionals to invest and work in SG

ResultsResults

Infrastructure• Banks provided financial support needed to make

SG’s industrialization a reality. Provided much economic support.

• PUB set up in 1963. Coordinate water, electricity, gas supplies

• SG Telephone Board installed 10,000 telephones/yr. Made SG part of larger world. Promoted economic activities.

ResultsResults

• Jurong Industrial Estate (JIE)

• 300 factories. 21,000jobs

• SG’s focal point for developing SG’s manufacturing base

• Many joint ventures between local and overseas entrepreneurs from Asia. Opened the door for foreign investment

Reasons for successReasons for success• Attracting MNCs to invest here would increase jobs,

leading to economic growth , therefore Singapore positioned itself as a stable and low-cost manufacturing export-centre

• Singapore’s port infrastructure and skilled workforce – providing easier access to markets for both importing and exporting and skills needed to refine imports into exports. Singapore purchases raw goods and refines them for export.

Eg: Wafer fabrication industry& Oil refining

• The government had high standards of public service in health, education, etc, which set Singapore apart from other countries, attracting foreign investors and leading to economic growth

Reasons for successReasons for success• Singapore focused on export-led industrialization.

Its strategic port makes it more competitive than many of its neighbours to carry out such entrepot activities.

• The governments' free-market policies, coupled with strict fiscal controls, created one of the fastest-growing economies in the world.

• Strict fiscal controls Kept inflation low and the government had strict

control over money supply.

Evaluate effectivenessEvaluate effectiveness• Succeeded in creating jobs for the

unemployed – providing incentives to the MNCs to set

up factories in SG

• SG was able to attract foreign investors & professionals to invest & work in SG– Putting in place high standards of public

service

Plans for Singapore• Expanding external ties - embracing globalisation through the

multilateral trading framework of the WTO, regional co-operation as well as bilateral Free Trade Agreements.

• Maintaining competitiveness and flexibility - keeping the burden of taxes and the Central Provident Fund on the economy as low as possible, reviewing the labour market and wage system to make them more flexible, and pricing factors of production competitively.

• Promoting entrepreneurship and domestic companies - encouraging people to be innovative and improving the ability of firms to develop new ideas and businesses, tap new export markets and broaden the economic base.

• Growing manufacturing and services - upgrading these sectors by improving cost competitiveness, equipping the labour force with relevant skills, and developing new capabilities and industries.

• Developing human capital - investing in education, helping workers train and upgrade, and welcoming global talent to augment the indigenous talent pool

Plans for Singapore (examples)• a 10-year plan: "New Singapore." • to make the country more globally competitive and less dependent

on foreign investment for its prosperity • Boost tourism in Singapore (there fore economic increase)

• IR Project• to create a new economy amid stiff competition from China and

other Southeast Asian countries.• boosting growth of economy, creating jobs or raising revenues.• would make Singapore a more attractive place for tourists (tourism)• Go to this website. It has everything you need for the challenges

and plans of Singapore :D

http://app.mti.gov.sg/default.asp?id=545#5

Thank You!Thank You!