Singapore’s Early Economic Challenges

1. Singapore’s Early Economic Challenges How did Singapore tackle Challenges in its Early Years of Independence?

2. 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

3. 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.

4. 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

5. 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

6. 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

7. 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

8. 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). Why was EDB important? The JTC Story

9. 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 important?

10. 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 important?

11. 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 important?

12. 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.

13. 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 important?

14. 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.

15. 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.

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

17. 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

18. 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.

19. 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.