History-Chapter 10: To What Extent Did People's Lives Change After Independence?

How Did Singapore Address Its Economic Challenges?

Economic Vulnerability

1. Limited Access to the Malaysian Hinterland

• ^^Malaysia remained Singapore’s main trading partner^^ after Singapore gained Independence.

• ^^Trade^^ between the two countries ^^was limited^^ due to the ^^absence of a common market^^ and ^^direct access to the Malaysian Hinterland.^^

2. Threat of Unemployment

• Another economic concern was the ^^need to provide sufficient jobs^^ to ^^cater to Singapore’s rapidly growing population.^^

• In ==1975==, there were already ^^more than 70,000 unemployed persons^^ out of a total %%labour force%% of ^^over 700,000.^^

• There was also a ^^large number^^ of ^^young people finishing their schooling^^ and would be ^^in need of a job^^.

• If ^^no jobs were available to them^^, Singapore’s ^^unemployment rate would grow even more severe.^^

• The ^^entrepot trade,^^ which had been a ^^lifeline of Singapore’s economy^^ for ^^more than a century^^, had been ^^declining since World War II.^^

• Due to the ^^growing competition from the other ports in the region^^, its ^^importance as a source of job creation was diminishing.^^

• Since the ^^military bases^^ were a ^^major source of employment for Singaporeans^^, with the livelihood of over ^^40,000 people dependent^^ on ^^supplying goods and services^^ to British servicemen stationed there, the announcement in ==1967== ^^of the closure of its military bases affected Singapore’s economy.^^

• The government had to ^^diversify the economy^^, which meant ^^finding new and varied sources of economic growth instead of always depending on only one source.^^

• That would make it ^^more likely for the economy to grow steadily^^ and ^^ensure there were sufficient jobs available for the people.^^

  %%(Labour Force consists of all the people in a country who are either working or looking for work. Generally, the higher the percentage of a country’s labour force who are working, the better its economy is considered to be doing)%%

Economic Diversification

1.Development Of Export-Oriented Industrialisation

• Even ^^before^^ the ^^merger or independence,^^ the government believed ^^industrialisation^^ was ^^key^^ to ^^diversifying Singapore’s economy.^^

• In ==1961==, ==Finance Minister Dr Goh Keng Swee== ^^announced^^ the ^^establishment^^ of the ==Economic Development Board (EDB).==

• ^^EDB^^ was ^^to promote industrial development in Singapore.^^

• For example, ^^by attracting^^ ==multinational corporations (MNCs)== to ^^set up factories^^ here. ^^Goods^^ produced in these factories were ^^meant to be sold mainly^^ in ^^Singapore and the Malaysian Hinterland^^. However, this ^^became impractical^^ after independence.

• Thus, Singapore ^^adopted an export-oriented economic policy.^^

• The ^^majority^^ of the ^^goods produced^^ would ^^instead be exported worldwide.^^

• ^^Hundreds of MNC’s from^^ countries such as the ^^Netherlands, Britain, Japan and the US set up operations^^ in Singapore.

• The ^^MNCs included Shell, Seiko and Hewlett-Packard.^^

How ^^Singapore Benefitted from MNCs^^ Setting Up Operations Here:

• ^^Employment^^ for thousands of people

• ^^Valuable technical training^^ and ^^work experience for the local workforce^^, which ^^helped to build up local expertise^^ that would eventually ^^fill job vacancies previously filled by foreigners^^

• ^^Greater access to modern technology^^ to help ^^keep Singapore competitive globally^^

• ^^Increased exports^^ of ^^locally manufactured goods^^ to ^^more overseas market^^

• In ==1961,== the ^^EDB transformed almost 70 square kilometres^^ of land in Jurong ^^into Singapore’s first industrial estate.^^

• ^^Plots of land^^ across the country were ^^set aside for development into industrial estates.^^

• As Singapore grew more industrialised, the ^^task of managing industrial estates^^ became ^^more difficult.^^

• So, in ==1968,== the ==Jurong Town Coperation (JTC)== was set up to ^^take over the task of building and managing industrial estates.^^

• Which then ^^allowed the EDB^^ to ^^focus^^ on ^^attracting foreign investment.^^

• These ^^efforts^^ to diversify the economy ^^paid off^^, as ^^manufacturing activity^^ in Singapore ^^increased significantly.^^

• Almost ==150,000 jobs were created between 1967 and 1973 alone.==

• ^^So many jobs^^ were ^^created^^ to the point there was a ^^shortage of labour^^, such that ^^foreign workers had to be recruited to fill up the jobs.^^

• ==Up until 1973==, ^^Singapore’s economic growth rates exceeded 10 per cent every year.^^

• Some of the key Industries that developed SG: ^^Electronics, Petroleum Refining, Ship Building and Repair, Garments and Textiles^^

2. Development Of Infrastructure

• The government also ^^developed^^ the ^^proper infrastructure^^ in Singapore.

• This would not only help to ^^attract MNCs and other foreign investors^^, but also ^^facilitate the growth of Singapore’s manufacturing industries.^^

  ==-Telecommunications==

• To ^^boost connectivity^^ among ^^industries and household^^

• ^^New telephones^^ being ^^installed^^ at a rapid pace

• Took ==85 years== to install the ^^first 100,000 telephones^^

• Took just ==5 years== from ==1967 to 1972== to ^^double the network size to 200,000^^

  ==-Banking and Finance==

• Services were ^^expanded^^ to ^^meet the needs^^ of the ^^MNCs and other companies^^ in SG

• For example, ==Development Bank of Singaore (DBS)== was ^^established in^^ ==1968== to ^^finance industrialisation and other development projects^^

• Many ^^foreign banks^^ also ^^set up^^ operation in SG

  ==-Public Utilities==

• The ==Public Utilities Board (PUB)== was set up in ==1963==

• Responsible to ^^provide public utilities such as water, electricity and gas^^

• ^^Improved^^ both ^^operating conditions^^ and ^^people’s living condition^^

  TRANSPORT FACILITIES

  ==-Air Transport==

• ^^Paya Lebar Airport^^ was ^^expanded^^ in the ^^1960s and 1970s^^ to ^^handle more passengers^^

• ^^Insufficient space for future expansion^^ so the government ^^decided in^^ ==1975== to ^^replace^^ it with a ^^larger aiport^^

• ^^Changi Airport was opened in^^ ==1981==

  ==-Sea Transport==

• ==Port of Singapore Authority (PSA)== was ^^formed in^^ ==1964== to ^^manage port operations^^

• To ^^cater to the rise in cargo traffic^^, ^^port facilities^^ were ^^set up^^ in ^^Jurong, Sembawang, Tanjong Pagar and Pasir Panjang.^^

  ==-Land Transport==

• ^^Roads^^ constructed to ^^connect industrial areas to housing estates^^

• ^^Expressway^^ system built to ^^reduce travel time around the island^^

Impact of the 1973 Oil Crisis

• In ==late 1973==, a ^^conflict in the Middle East^^, a ^^major oil exporting region^^, caused a ^^shortage in global oil supply^^ and ^^oil prices jumped^^ by ^^almost four times^^ in ^^less than three months^^.

• This had a ^^significant impact on Singapore^^ since it ^^imported all its oil^^, which was ^^needed for its economy to run smoothly.^^

• Several ^^measures were implemented^^ to ^^help the people^^ deal with the effects of the oil crisis.

• ^^For example^^, the government took the lead in ^^increasing worker’s wages^^ to ^^help them cope with the inflation.^^

• While ^^Singapore^^ ==recovered by 1976,== this ^^crisis served as a reminder^^ that its ^^economy was vulnerable to external developments beyond its control.^^

1. ==-Increase in global oil prices== → @@Increase in petrol and electricity prices in SG@@ → $Increase in public transport fares$$$Increase in public transport fares$$ → %%increase in cost of living%%

2. ==-Increase in global oil prices== → @@Increase in petrol and electricity prices in SG@@ → ^^Increase in cost of producing and transporting goods^^ → Increase in price of goods → %%Increase in cost of living%%

3. ==-Increase in global oil prices== → @@Increase in petrol and electricity prices in SG@@ → ^^Increase in cost of producing and transporting goods^^ → Increase in price of goods → Decrease in demand’s for SG’s exports → Decrease in economic growth rate