57_G15_InFocus_Singapore

Global Issue 15

In Focus Singapore Singapore timeline 1819 British East India Company creates a trading post on Singapore Island 1867 Straits Settlements become a crown colony of the British Empire 1946 Singapore becomes a separate crown colony 1971 Last British military forces are withdrawn 1979 Singapore becomes world’s second busiest port 1998 Singapore slides into recession during the Asian fi nancial crisis 2003 Singapore becomes the fi rst Asian nation to sign free-trade deal with US 2005 The government approves a controversial plan to legalise casino gambling 2008 Singapore slips into recession again, thanks to the global fi nancial crisis 2009 Singapore emerges from its worst recession after the economy expands by 20 per cent between April and June 2010 Singapore is the best country in which to run a 1970 2000 2010 the World Bank 2012 Singapore business, according to experiences its fi rst strike since the 1980s over bus driver wages 2013 Large rally protests about government plans to boost the population, projecting a possible 6.9 million people in Singapore by 2030 Calvin Teo rectly with the developed world – America, Europe and Japan – and attract their manufacturers to produce in Singapore and export their products to developed countries. The second was “to create a First World oasis in a Third World region”. “We had one simple guiding principle for survival,” Lee Kuan Yew says, “that Singapore had to be more rugged, better organised and more effi cient than others in the region. If we were only as good as our neighbours, there was no reason for businesses to be based here.” He and his ministers set out to woo the US industrialists through a series of talks. The breakthough came when Texas Instruments started production of semiconductors – at that time a high-technology product – in 1968. National Semiconductors followed closely on its heels. Hewlett-Packard (HP) came onboard and General Electric set up six different facilities. By the 1980s, the country had become a major electronics exporter and by 1997 there were nearly 200 US manufacturing companies with over $19 billion-worth of investments. Shell and Exxon set up refi neries, spawning a thriving chemical industry and hundreds of manufacturing fi rms appeared to service the large multinationals and rapidly expanding economy. Britain had been persuaded not to destroy its facilities when it left, contrary to usual custom, and the dockyards at Sembawang and Keppel prospered under private management. The RAF Changi airbase was expanded through reclaimed land and developed to rank as one the very best airports in the world – and it is still expanding. Singapore’s rise as a fi nancial centre came about as a chance observation that the daily fi nancial world went to sleep when San Francisco closed in the afternoon until Zurich opened in the morning. Could Singapore fi ll in the gap and thus deliver a 24-hour round-the-world service in money and banking? It could and did. By the 1990s, Singapore had become the fourth largest fi nancial centre in the world after London, New York and Tokyo. Singapore was well on its way. The model that emerged consisted of, on the one hand, a tightly regulated planned economy and, on the other, one of the world’s most free market systems. That model continues to this day with each administration making adjustments to suit changing circumstances. For example, the education system has been upgraded from providing basic vocation-oriented scholarship to advanced secondary and tertiary learning. Singapore itself has become a major centre of learning for the Asian region. The government works with trade unions and employers to regulate the fl ow of foreign workers and thus control the labour market. Ironically, its policies to limit population growth in the 1970s, when unemployment was rife, worked too well and its current total fertility rate of just around 1.2 is the lowest in the world. In an effort to increase the fertility rate, premier Lee Loong introduced substantial bonuses for larger families in 2004. However, bowing to public pressure, he also raised the foreign-workers’ levy and cut back the number of foreign work permits, but this has added to manufacturing and services costs, which have been passed on to customers, fuelling a three to four per cent infl ation. Nevertheless, Singapore is determined to continue its march towards a knowledgebased economy and is upgrading both its high-end technical training and providing companies with subsidies to increase their rate of mechanisation. In 2000, it set up the Agency for Science and Technology (A*STAR) and it is devoting more of the budget to research and development, as well as the promotion of innovation, entrepreneurship and attracting foreign talent. The mega, three-phase One North scienceculture project is an important move to anchor Singapore in the higher reaches of the knowledge-based economy structure. As always, Singapore seems to be one step ahead of the world. The tear in Lee Kuan Yew’s eye seems to have turned into an enduring pearl. global thi rd quar ter 2013 www.global -br ief ing.org l 57


Global Issue 15
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