History of Economic Growth in Singapore

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Economic challenges faced by Singapore after Independence

It can be argued that no country made the leap from Third World poverty to developed world affluence as quickly and completely as Singapore did. In the 1960s, Singapore was known for its opium dens, gang-ridden streets, fetid slums and racial tensions. Now its is known for its high tech industries, comfortable lifestyle and high-speed Internet penetration. Singapore emerged from being a tropical backwater and grew into one of Asia’s wealthiest nations in little more than 30 years. Gross domestic product per capita climbed from $516 in 1965 to $22,000 in 2004 to $50,123 in 2011. The per capita income in 2011 was or 48 times the level it was in 1960, according to government statistics.

Economic Problems

Singapore had no natural resources like tin, rubber or oil. It depended on entrepôt trade since the last century. By 1960’s, more ports near Singapore were developed and they faced competition from them. They traded directly with the countries instead of sending their goods to Singapore for re-export.

Population had been growing and jobs had to be created for people. British forces left Singapore and the people working in British bases lost their jobs.

Steps taken to solve Economic Problems

Consulted Dr. Albert Winsemius, a Dutch EconomistHe recommended that Singapore should focus on manufacturing low-value products like clothes, textiles, toys etc

  1. Economic Development Board (EDB) was set up Aug 1961. EDB was set up to encourage American, Japanese and European Companies to set up factories in Singapore. EDB had branches in America, Japan and Europe to provide information and assist international companies to set up factories in Singapore. Foreign Companies were given tax holidays – They didn’t have to pay taxes for a few years while they continued operations in Singapore
  2. Other Roles of EDB.
  • EDB helped small countries expand.
  • Provided loans to new industries
  • Conducted studies on new types of industries to be set up
  • To develop and manage industrial estates (Role was handed over to Jurong Town Corporation in 1968).

Support for Industries

Government continued to expand the international airport at Paya Lebar in the 1960s so that it could handle more cargo and bigger aircrafts. Port of Singapore Authority was set up in 1964 to supervise, manage and develop port operations. Late 1960s, a container port was built to deal with container ships arriving from other countries.

Building the infrastructure

Public Utilities Board (PUB) Established to co-ordinate the supply of water, electricity and gas to the people in residential and industrial areas in Singapore. Telecommunications were improved so people in Singapore could reach out to people overseas. This enabled business contacts overseas to be established. Banking facilities of 35 major banks were improved. Money were lent to businesses to start new factories. Competition, what should Singapore do? 1970s S’pore’s competitors for low-value products were Hong Kong, Taiwan and South Korea. S’pore switched to producing high-value products like.

Electronics industries that produces TV, calculators, medical instruments and computer parts. Aircraft industry that produced aircraft parts and components. Oil rig industries that built oil rigs. Workers needed very specialised skills to produce  these high-value products. Companies with technical know-how were encouraged to provide training to the workers. They were given tax holidays and other financial incentives in return.

External Developments and effects on Singapore

1960s world trade was flourishing and most international companies were willing to invest in Singapore. Our economy grew. 1970s rise of oil prices affected world economy. This resulted in world-wide recession. Singapore was able to pull through because of the hard work of the people and it had a strong economic foundation. Reasons for Singapore’s success in building a Strong Economy Contribution of older generation in Singapore -Hardworking, disciplined and willing to work together. Contribution of leaders in Singapore -Leaders were far sighted and made careful decisions.

Cite this paper

History of Economic Growth in Singapore. (2020, Nov 10). Retrieved from https://samploon.com/history-of-economic-growth-in-singapore/

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