singapore’s early economic challenges

Singapore’s Early Economic Challenges

How did Singapore tackle Challenges in its Early Years of Independence?

Problems faced by Singapore

People of different races and religions living together

Need to develop a national identity Need to work towards the good of the

nation and work to protect and defend our achievements

Need to build a stable economy provide housing and education to the people

Economic Problems

No natural resources like tin, rubber or oil. Depended on entrepot trade for the last century. By 1960s, more ports near Singapore were developed

and we faced stiff competition from them. They traded directly with other countries instead of

sending their goods to Singapore for re-export. Population had been growing and jobs had to be created

for the people. British forces were leaving Singapore. The people who

had been working in the British bases lost their jobs.

Steps taken to solve economic problems

Consulted Dr. Albert Winsemius, a Dutch economist. He recommended

Singapore concentrate on manufacturing of low-value products like clothes, textiles and toys.

Go to - The Story of an Economic Miracle

Steps Taken

Attract Foreign Investors & MNCs A Peaceful & Skilled Workforce

Industrial Peace Labour cost & working conditions Technical education & skills training

Location of Industries Support Facilities

Transport & Communications Banking & Financial Services

Economic Development Board (EDB) Aug 1961

To encourage American, Japanese and European companies to set up factories in Singapore.

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 – did not have to pay taxes for a few years while they continued operations in Singapore.

Technological & Capital intensive companies too Shell Eastern Petroleum and the National Iron

and Steel Mills

Steps taken to solve economic problems

New factories were set up in Jurong, Redhill and Tanglin. Factories were equipped with ready

supply of electricity and water.

Go to:http://edb.gov.sg/edb/sg/en_uk/index/about_edb/our_history.html

Other roles of EDB

Helped small industries 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).

The JTC StoryWhy was

EDB

importa

nt?

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 (PSA) 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. Why were

these

importa

nt?

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. Why were

these

importa

nt?

Communication bt workers and employers

Industrial Relations Ordinance 1960 Arbitration Courts to settle

disagreements. New labour laws were introduced to

ensure fair treatment of workers. National Trade Union Congress

(NTUC) formed. Government helped to set up market

for sale of goods produced in Spore.Why was

this

importa

nt?

Competition. What should we do? 1970s our competitors for low-value products were

HK, Taiwan & S Korea. We switched to producing high-value products like electronics industries that produced 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.

Education New schools and vocational institutes

were set up to provide education and technical training.

Training institutes were jointly set up by the government and international companies. For example, the French-Singapore Institute and German-Singapore Institute.

The Polytechnics, National University of Singapore and Nanyang Technological University were expanded to provide training for technicians and engineers.Why was

this

importa

nt?

Jurong Industrial Estate (JIE) July 1960 Minister of Finance,

Goh Keng Swee Jurong as an industrial estate. Located away from any built-up

area and close to Malaysia, our hinterland.

Deep water suitable for building a harbour.

Was an area of jungles, swamp and old rubber estates as well as a small fishing village.

Communication lines were laid. Roads, railway tracks and a network

of telephone lines, a power station and a reservoir were constructed.

JIE Own port with wharves and

modern facilities so that ships from overseas could bring in raw materials and manufactured goods could be exported.

1963 The National Iron and Steel Mills was the first factory to be set up in Jurong. More factories followed.

1967 1st phase of development was completed.

1968 there were 300 factories and 21,000 workers in Jurong. Factories in Jurong produced clothes, textiles, toys, woods products and beverages.

Mr. Goh Keng Swee opening a woodwork factory in 1964.

JIE Jurong grew fast in the first 2 decades. It became one of the largest industrial

estates in Asia. End 1970 Jurong had 1400 factories,

providing jobs for 112 000 workers. By 1968 JIE and other industrial estates

came under newly formed Jurong Town Corporation(JTC).

JTC developed Kallang basin, Sims Avenue and Redhill which are near residential areas.

More on Dr Goh Keng Swee & JIE – A Tribute to Dr Goh

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 Our Success in Building a Strong Economy

Geographical position Located at the meeting points of the east and

the west.

Contribution of leaders in Singapore Leaders were far-sighted and made careful

decisions (Planning)

Contribution of older generation in Singapore Hardworking, disciplined and willing to work

together.