Jagannath University

Department of Political Science

Assignment On: Economic Development in Singapore
Course Title: Governance and Politics of Southeast Asia
Course Code: POL-2104
Submitted To:
Rabeya Bosri Chandni
Lecturer
Department of Political Science
Jagannath University, Dhaka

Submitted By:
Group-H
Group Member’s IDs:
B180402062 B180402067
B180402063 B180402068
B180402064 B180402071
B180402065 B180402073
Department of Political Science
Jagannath University, Dhaka
Date of Submission: 30/06/2021
 Index
Total Name of Group Subtopics of
Members group Member’s ID each group
members member’s
presentation
Mohammad
1 Muhaiminul B180402067 Introduction
Haque

Md. Nasimul Background of

2 Haque
B180402071 Economy in Singapore

Economic
Farjana Development in
3 Siddique
B180402068 Singapore

Shadat Hossain Economic Policies of

4 Shamim B180402064 Singapore

Swapnashish Recent Economic

5 Gope
B180402073 Situation in Singapore

Shamima Growth of Economy in

6 Begum
B180402062 Singapore

Impact of Economic
Nafisa Maliha
7 Upama B180402063 Development in
Singapore

Bodruddoza
8 Khilzee B180402065 Conclusion
 Introduction:
Though 50 years ago, Singapore was confronted with severe unemployment, poor
infrastructure, and a housing shortage, today the city-state is ranked as one of the most
livable cities, boasting one the highest level of human capital development in the world. An
efficient and honest government, the friendly policies adopted by the government towards
foreign investments and the strategic location of the island, just suspended the Malacca strait
that guarantees the control on 40% of trading passes are the main three reasons behind the
economic development in Singapore. Besides, a strong education system is supporting the
economic growth in Singapore. Moreover, there are currently over 3000 multinational
corporations operating the country, accounting for more than two-thirds of manufacturing
output and direct export sales. Now- a -days, Singapore is considered as the economic model
of the world.

 Background of Economy in Singapore:

For over 100 years Singapore was under British Control and two years a part of Malaysia.
Singapore gained formal independence on August 9, 1965. Singapore was a small and
densely populated nation, with very few natural resources and little space to grow out words.
After independence, more than two-thirds of its population was living in slum. Over the
years, the economy of Singapore changed drastically .It is interesting to observe the change
of economical background in Singapore before independence and after independence.
1. Pre-independence period: During colonial times, Singapore’s economy was centered on
entrepôt trade. In the 1960s, the city-state of Singapore was an undeveloped country with a
GDP per capita of less than U.S. $320. But when the British were unable to protect the
colony from the Japanese during World War II, it sparked a strong anti-colonial and
nationalist sentiment that subsequently led to Singapore's independence. The removal of the
British further aggravated the unemployment situation. On August 31, 1963, Singapore
separated from the British crown and blended with Malaysia to form the Federation of
Malaysia. The two years Singapore spent as part of Malaysia were filled with social strife, as
the two sides struggled to coordinate with one another ethnically. Street riots and violence
became very common. The Chinese in Singapore outnumbered the Malay three-to-one.
Therefore, as a way of ensuring a Malay majority within Malaysia proper and to limit the
influence of communism, the Malaysian parliament voted to expel Singapore from Malaysia.
2. Post independence period: After independence, Singapore continued to experience
problems. Much of the city-state's 3 million people were unemployed. More than two-thirds
of its population was living in slums and squatter settlements on the city's fringe. The
territory was crunched between two large and unfriendly states in Malaysia and Indonesia.
Singapore lacked natural resources, sanitation, proper infrastructure, and sufficient water
supply. The most effective solution to Singapore's economic and unemployment woes was to
set on a comprehensive program of industrialization, with a focus on labor-intensive
industries. Unfortunately, Singapore had no industrial tradition. In order to attract investors,
 Singapore had to build an environment that was safe, corruption-free, and low in taxation. To
make this possible, the citizens of the country had to suspend a large measure of their
freedom in place of a more autocratic government. The country's strict, but business-friendly
laws became very appealing to foreign investors. Moreover, with its beneficial location and
established port system, Singapore was an ideal place to manufacture goods. As a result of
Singapore's steady climate, adjuvant investment conditions and the speedy expansion of the
world economy from 1965 to 1972, the country's Gross Domestic Product (GDP) enhanced
to annual double-digit growth. Today, Singapore is a modern, industrialized society and
entrepôt trade continues to play a central role in its economy.
Singapore's model of abandoning freedom for business is highly agitated and heavily argued.
Regardless of philosophy, its efficiency is indisputable. Now, Singapore is the 15th trading
partner with United States.

 Economic development of Singapore:

Fifty years before, Singapore was confronted with severe unemployment, poor infrastructure,
and a housing shortage. Today this city-state is ranked as one of the most livable cities,
boasting on the highest levels of human capital development in the world. Singapore rapidly
developed from a low-income country to a high-income country. GDP growth in the city-
state has been amongst the world’s highest, at an average of 7.7% since independence and
topping 9.2% in the first 25 years. Gross national income is US $54,530 as per capita till
2017.
 The country provides one of the world’s most business-friendly regulatory environments
and the biggest free market for local and foreign entrepreneurs and is ranked among the
world’s most competitive economies.
 Singapore is ranked first worldwide for the ease of doing business by the World Bank for
2012, consecutively for 7 years .Singapore is ranked the #1 in the most competitive
country in the world. Foreign exchange reserves ranked 10 out of 121 countries.
 As of 2020, Singapore is ranked as the fourth least corrupt country in the world and it
has low tax and business opportunity and also the highest per capita.
 Nominal GDP — IMF: ranked 36 out of 188 countries (2014), World Bank: ranked 36
out of 189 countries (2014).
 Nominal GDP growth rate 2014 estimate: ranked 99 out of 198 countries.
 Nominal GDP per capita - IMF: ranked 6 out of 186 countries (2015).
 GDP (PPP) per capita – IMF: ranked 3 out of 187 countries (2014), World Bank: ranked
3 out of 185 countries (2014).
 Singapore’s GDP was equal to Mexico and South Africa in 1965.
 Singapore’s GDP was equal to South Korea and Portugal in 1990.
 Prioritizing creativity, innovation, educational scholarship & technological support.
 Globalizing capital based company and introducing information revolution.
 The economic statistics of Singapore :
 GDP $379.071 billion(nominal,2021), $617.987 billion
(ppp,2021)
GDP rank 38th (nominal,2020), 37th (PPP, 2020)
GDP growth 3.4% (2018), 0.7% (2019), -3.5% (2020), 5.5% (2021)

GDP per capita $64,217(nominal, 2021), $104,691 (PPP, 2021)

GDP by sector Agriculture : (0.5)%, industry : 24.8%, services :
75.2%

 World Economic Forum: Travel and Tourism Competitiveness Index 2013, ranked 10 out
of 140 countries.
 World Tourism Organization: World Tourism rankings, ranked 29 out of all countries.

 Economic Policies of Singapore:

Singapore’s economic achievement is based on sound macroeconomic policies aimed at
maintaining a conductive environment for long-term investment. Its strong economy
performance reflects the success of it open and outward-oriented development strategy.
Many policies have been introduced .Some of them are-
1. Policies of Lee Kuan Yew: Former Prime Minister Lee Kuan Yew made some policies for
development which was long term. Meritocracy was his priority in his administration.
Including multi-racialism, English as a common language so that native people can
communicate and integrate with immigrant society for trading.
2. Introduction to EDB: Economic Development Board (EDB) constructs strategy and
government granted fund if local or any foreign investor’s project is good. The board creates
different business interest for the investors.
3. Attracting Multinational Companies: Singapore involves many multinational companies
for importing raw materials from countries like USA, Japan & Europe. Those countries
choose Singapore as industrial place.
4. Liberalizing banking sector & Privatization: Local banks compete and foreign banks get
assured because Singapore’s social permission and infrastructure. In 1990, liberalization of
banking sectors arise & small enterprises with the government help starts small & medium
business with multinational companies so that they can fulfill the need of raw materials.
Government sells shares one by one to the corporate & private companies to create
participation when the privatization starts.
5. Growth triangle: The Growth Triangle is a partnership arrangement between Singapore,
Malaysia & Indonesia that combines the competitive strengths of the three areas to make the
sub-region more attractive to regional and international investors.
6. Fiscal Policy: Singapore practices a prudent fiscal policy, which complements the monetary
policy in promoting sustained economic growth without inflation. Fiscal rules require a
balanced budget over the term of the government.
7. Monetary Policy: Monetary policy in Singapore is centered on the exchange rate. In the
small and open Singapore economy, the exchange rate is the more effective tool for
maintaining price stability.

 Recent Economic Situation in Singapore:

Singapore qualified as a well developed nation means that it should target GDP growth
around 2 to 3 %. The economic situation in Singapore has made quite an improvement year
after year. Some of the facts on the current situations are-
1. Singapore’s GDP growth rate in 2019 was 0.737% declined from the year 2018 which
was 3.44%. In 2017, the rate declined by 0.9% which was 4.34%. The growth rate in
2016 was 3.24% which increased by 1.09% in 2017 but decreased by 0.26% from the
year 2015.
2. Singapore’s economy expanded by 1.3% on a year in the first quarter, a reversal on the
2.4% contraction in the previous quarter seasonally adjusted basis the economy grew by
3.1%, extending the 3.8% expansion in the fourth quarter of the last year.
3. Currently there is no foreign debt, high government revenue on a consistently foreign
surplus in Singapore by exporting electronics, manufacturing and machinery, financial
services, tourism and the world’s busiest cargo.
4. Now the government of Singapore warned that “heightened uncertainties” arising from
the COVID-19 pandemic in the months ahead while maintaining its growth forecast at
4% to 6% for 2021.

 Growth of Economy in Singapore:

Singapore is one of the most prosperous nations with a rapid growth of economy. The
economy of Singapore tends to grow year after year as its growth at the first quarter of 2021
was 1.37 from the report of ministry .That’s so far the highest growth. The different sectors
which helped to grow the economy are given below –
 Industrialization: Singapore is a highly industrialized society & economic growth is
playing a key role. The port of Singapore is now the fastest transshipment port in the
world surpassing Hong Kong. In terms of overall cargo tonnage.
 Tourism: Singapore’s tourism industry is also attracting 10 million visitors every year.
The city having a zoo, night safari and a nature reserve Marina Bay Sands and Resorts
play a huge impact on the growth of Singapore economy.
 Medical Treatment: The country’s medical and culinary industry has also become quite
marketable, due to the cultural heritage and advanced medical technology.
 Banking System: Banking has grown significantly in recent years, and the biotech
industry is booming and oil refining continues to play a huge role in the economy.
 Manufacturing: Manufacturing expanded by 10.7% from a year ago, lifted by stronger
output in the electronics, engineering and chemical clusters. Construction contracted by
 22.7% year on year. Production industries shrank a slight 0.5% but recovered by
improving 4.7%.
 Education System: Singapore sets up many technical schools and provides international
corporations to train their unskilled people in technology.
Today, the Singapore’s economy is one of the most stable in the world. It has made the
most of its limited natural and human resources and the world’s fastest growing nation.

 Impact of Economic Development in Singapore (Positive & Negative):

During the period 1959-72, Singaporeans have experienced dramatic political changes and
economic improvement. This great change also makes a change in our society, polity,
lifestyle and other ways. Those changes are mostly positive. Now there will be some
description about impact of economic development in Singapore.
 Positive impact:
Economic development makes a planned economic objectives and criteria. It makes good
relationship with other countries specially the developed countries like USA. That also can
help to ensure the security. The growth of employment also rises for that. It also has one of
the highest income imparity among developed countries. The physical environment also
developed for it. The private housing, mils, factories, industries are also rising.
Transportation problem reduce for it. It is free from corruption for its proper structural
system. Within the next decades, the island-state will be able to provide to all her citizens
adequate work opportunities, reasonable wages, housing, education, medical care and
recreational facilities.
 Negative impact:
As Singapore is a global city state, it is badly influenced by various culture or lifestyle. That
is harmful for the societies sometimes. Drug addiction, alcohol addiction, pornography are
increasing. “Casino” is granted for recreation. Major economic benefits of increasing land
values be returned to society as a whole and not be appropriated by private individuals or
companies. Pollution problem increases for the transportation and industries which causes
greenhouse effect.

 Conclusion:
The extraordinary success of Singapore’s economic achievement since the 1960s has its roots
in the hard work of the government and the people of Singapore. The government and the
people of Singapore have realized that Singapore depends on its human resources and on the
resources of foreign investors. As such, both the government and the people have worked
together throughout the years to ensure that Singapore’s economy remains competitive.
Singapore has done well over the last forty years, turning its people into assets as the
launching pad of its economic development. The next couple of years present Singapore with
a totally different set of new challenges, and yet, the Singapore government is still optimistic
about the use of their human capital in their country as the goal for the near future.
 Reference:
Rahman, Dr. Tarek .S (2019) “The Government and Politics of South East Asia” Shova
Prokash (P.P-33)

‘Singapore Overview’ Retrieved from- https://www.worldbank.org/en/country/singapore

The economy of Singapore (1972-1977) Bank of America, Economic Department