7/23/2019 Singapore's development and achievements over 50 years

http://slidepdf.com/reader/full/singapores-development-and-achievements-over-50-years 1/1

What will Singapore be like 40 yearsfrom now? I can’t tell you. Nobodycan. But I can tell you it must be atotally different Singapore because if

 it is the same Singapore as it is today,

we’re dead ... We have to remake Singapore – our economy, our education system, our mindsets, our city.

– Prime Minister Lee Hsien Loong (2005)

We can no longer prosper and progressthrough hard work alone.Our people have to masterdeep skills in every field, and

our enterprises have to bringnew ideas to the market.

– Deputy Prime Minister andFinance Minister TharmanShanmugaratnam (2015)

50 and beyond: Singapore’s economic transformation

BT Infographics

Source: MTI, DOS BT Graphics: Jennifer Chua & Ludwig Ilio

10

8.1

7.1

13.6

12.3

10.9

7.6

13.7

13.9

12.1

13.5

11.1

6.5

4.6

7.4

7.5

8.79.4

10

10.7

7.2

8.58.8

-0.7

-3.7

1.3

10.8

11.1

10.2

10

6.7

7.1

11.5

10.9

7

7.5 8.3

-2.2

6.1

8.9

-1

4.24.4

71,318

9.5

7.5

8.9 9.1

1.8

-0.6

6.2

15.2

3.4

4.4

2.9

KEY INDICATORS

UNIndustrialisationProgramme

New PM:Lee Kuan Yew

Singapore joinsFederationof Malaysia

EDBestablished

Singapore gainsindependence

Konfrontasiends

Singapore issuesown currency;Asean formed 

MASestablished

National Wages Council,National Productivity Boardformed

Stock Exchange

of Singaporeincorporated

Global oil crisis thwarts8-year run of double-digitgrowth; Temasek Holdingsincorporated

MTIset up

World hit bysecond oil shock

GIC – then knownas GSIC – formed

Singapore employers beginpaying a levy for foreign workers

Global economy shows

best performancein eight years

Singaporeplunges intorecession

Gulf War

GST introducedat 3%

Sars; Iraq War;GST increased to 4%

New PM:Lee Hsien Loong;

GST increasedto 5%

GSTincreased

to 7%

GlobalFinancialCrisis

Lee Kuan Yewdies

Asian

FinancialCrisis

Singaporeslumps intorecession

Local stock marketenjoys super bull run

Apecestablished

New PM:Goh Chok Tong

1965 19701960 1975 1980 1985 1990 1995 2000 2005 2010 2015

Quick economicrecovery, but

reboundshortlived

Singapore fallsinto recession

1979 – 1985• Rising wage costs,

tight labour market• Competition from

lower-cost developingcountries

GROWTH STRATEGIES• Shift to higher value-add

and skills-intensiveinvestments

• 1979: three-year wagecorrection policy to pushup wages, induceefficient use of labour

• 1981: First productivitycampaign, emphasising

manpower development,automation

OUTCOMES• Growth averaged

7.7% pa• Nominal value-added per

manufacturing workerrose by S$8,600 overperiod

• Skilled employmentdoubled to 22%

1985 – 1991• 1985-1986: First

recession sinceindependence

• Due to weakexternal demandand fundamentalinternal problems(loss of competitiveness, constructionslump, oversaving)

GROWTHSTRATEGIES1986 EconomicCommittee Report 

• Cost-cuttingmeasures: reduceemployers’ CPF rate,wage restraint

• Promote services –eg tourism & banking– as actively asmanufacturing

OUTCOMES• Quick rebound,

double-digit growthby 1987

1991 – 1997• More mature

economy, slowergrowth

• Faster rising costs,more bindingresource constraints

• Greater overseascompetition

• Relatively low-techbase

GROWTHSTRATEGIES1991 StrategicEconomic Plan• Growth Triangle

network of Singapore,Riau Islands, Johor

• Move to developedeconomy: enhancehuman resources &soft infrastructure;help local firms expandabroad

OUTCOMES• Growth averaged

8.5% pa• Direct investments

abroad shot up fromS$16.9b in 1990 toS$75.8b in 1997

1997 – 2001• 1997: Asian

FinancialCrisis

• Rise of China& India bringsopportunities,challenges

GROWTHSTRATEGIES1998CommitteeReport 

• Vision tobecomeglobally

competitiveknowledgeeconomy

• Manufacturingand services astwin enginesof growth

• Developgloballycompetitivelocal firms

• Governmentto be businessfacilitator

2010 – Present• New & volatile

global economicenvironment

• PM Lee Hsien Loongforms EconomicStrategies Committeeto build capabilities, maximiseopportunities, fostersustained andinclusive growth

GROWTH STRATEGIES 2010 Economic Strategies CommitteeReport 

• Raise productivity ofworkers in all sectors,with raising wages asend-goal

• Reduce reliance onforeign workers byraising leviesprogressively

• Budget 2010: NationalProductivity Fund setup, Productivity andInnovation Credit (PIC)introduced

In five decades, Singapore has weathered five recessions, clocked 18 years of double-digit growth, and transformed into a global hub for finance and commerce.Through all the swings and dips, one thing has remained true – the relentless push to stay competitive. The Business Times takes a look at Singapore’s economic transformation,and ponders on the strategies that may lie ahead. – By Kelly Tay and Andrea Soh 

Three main dimensions to future growth:

Industry contribution to GDP (%)

GDP per capita, population

1ADVANCEDMANUFACTURING

 Deep capabilities inwide spectrum ofdisciplines – electrical,mechanical, and

process engineering

Diverse portfolio ofindustries concentrat-ed in a city-state

New opportunitiesfrom technological

  trends

• Pervasive innovation inevery firm, industry

• Develop own products &

services• Become leading centre for

value creation in businessstrategies of foreigncompanies

FROM VALUE ADDITIONTO VALUE CREATION1

• Hone deep skills inevery vocation

• Learning at every

stage of life• Multiple pathways to

success

MASTERYOF SKILLS2 SINGAPOREAN

CORE3• High-skilled, innovative

teams in every sector• Good careers for

Singaporeans• Globally competitive

local companies

2 APPLIED HEALTHSCIENCES

Strong science

foundation, respectedhealthcare services,deep Asian consumerand market insights

 New demand fornon-traditional modelsof care, due to growingaffluence and rapidlyageing population inAsia and elsewhere

3 SMART &SUSTAINABLEURBANSOLUTIONS

 Countries in regionalready look toSingapore as a model

and pioneer ofsustainable citymanagement

 Growing urbanisationworldwide

4 LOGISTICS &AEROSPACE

Already Asia's

leading logistics hub,airport, and seaport

 Rising volumes oftrade in Asia

 Allow companies tocompete on factorsother than costs

5ASIAN & GLOBALFINANCIALSERVICES

Already among the topfive internationalfinance centres in theworld

 Rapid growth of AsianfinanceRise in areas likeinfrastructure funding,structured tradefinance, wealth

CITIZEN POPULATIONTOTAL POPULATION

0

1

2

3

4

5

6

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

20142010200520001995199019851980197519701965

20142010200520001995199019851980197519701965

 POPULATION (MILLION)GDP PER CAPITA S$, AT CURRENT MARKET PRICES

1960 – 1964• Small country, no

natural resources• Dependent on

entrepot trade,British militarybases

• Little industrialknow-how &domestic capital

GROWTHSTRATEGIES• 1960: First state

development planby UN team

• EDB set up to

spearheadindustrialisationeffort, attractforeign investments

• Import-substitutionapproach, tariffs onimports

OUTCOMES• Growth averaged

5.2% pa• Manufacturing’s

share of GDP grewfrom 11% in 1960 to13% in 1964

1965 – 1978• After separation from Malaysia, import

substitution no longer relevant• High unemployment of 10%, exacerbated by

closure of British bases which provided40,000 jobs

• Konfrontasi threatened trading post role

GROWTH STRATEGIES• Export-oriented approach• Attract foreign investors to grow manufacturing

and financial sectors• Investments in infrastructure, nationalised

companies in areas where private sector lackedexpertise

OUTCOMES• Growth averaged 10% pa

• Unemployment rate fell to 3.6% in 1978• Manufacturing’s share of GDP grew from 14% in

1965 to 24% by 1978 

63,49849,715

41,01835,346

23,139

14,92110,7146,0672,8321,580

2.1m 2.3m 2.4m2.7m

3m

1.9m 1.9m2.2m

2.6m2.8m

3.5m 3m

3.1m 3.2m 3.3m

4m 4.3m

5.1m5.5m

 JurongIndustrial

Estate JurongBird Park

SingaporeZoo

ChangiAirport

Gardensby the BayMBS

% GDP GROWTH (2010 MARKET PRICES)

FIVE DECADES OF TRANSFORMATION

As Singapore’s economy matures and enters a new phase, the

government is expecting slower but better-quality growth.

Expansion will be driven by deep skills and innovation, with

Singaporeans at the core.

In Budget 2015, five growth clusters of the future were identified. The aim is to build on existing

strengths, and to focus on areas with growing demand, and where Singaporeans can excel.

WHAT'S NEXT? 2015 AND BEYOND

Note:Citizen populationfigures for 1965,

1975 and 1985not available

SingaporeFlyer 

Merlion

Underwater World Esplanade

2001 – 2010• 2001: Singapore economy

contracts 1.2%; Dotcombubble; Sept 11 terroristattacks

• 2003: Sars crisis, tourism& entire economy suffer

• 2008/2009: GlobalFinancial Crisis

GROWTH STRATEGIES 2003 Economic ReviewCommittee

• Ensure competitiveness,cut corporate & income taxto 20% from 25%

• Flexible foreign worker

policies• National continuing

education & training bodyrecommended

OUTCOMES• Economy grew strongly, on

the back of strong inflows offoreign workers

• But reliance on cheapforeign labour led to lowerproductivity growth

• Infrastructural pressures

The question was, howto make a living? How to

 survive? This was not atheoretical problem in theeconomics of development. It

was a matter of life and deathfor two million people.

– Founding prime minister Lee Kuan Yew (1978)

   W   H   Y

   E   X   I   S   T   I   N   G   S   T

   R   E   N   G   T   H   S

18.4

17.5

15.85. 1

12.5

17.5

11.5

6. 914.3

23.6

9. 36. 24. 6

19.6

16.5

10.4

Others

Finance & insuranceConstruction

Business servicesTransportation & storage

Manufacturing

Other services industries

Wholesale & retail trade