Let us discuss the economic progress of Singapore as a nation in a nutshell in the last hundred years. Depending of three perspective. These are: namely the level, generation and distribution of income.
At first let’s discuss about the level of income of people basing on the gross domestic product leaving the gross national product. In earlier year it was not possible to find the GNI measure that we use now in our everyday life. In 1965, Singapore’s nominal GDP per capita was around US $500. In 1990, GDP per capita had risen to about US $13000 beating other countries like South Korea, Israel, and Portugal. Later on 2015 the GDP per capital income was US $56000 which was similar as Germany and the United States. And there is and intuition that the GDP per capital will reach US $95000 by the year 2040. Right now Singapore is already the top-ranked countries of the world and the it is among the top twenty five cities of the world. And it will become fifth highest among cities in the world by the year 2065.
Now coming to the generation of income. It is also very important as the level of income because it helps us to understand how we produce and what the resources that we use for the production. Now the output that we get for per hour work has increased. In 2015 it was seen that the people of Singapore worked for almost two thousands three hundred hours. Now this year lets are planning to work in only one thousands four hundred hours. The work hour is decreasing because the people of Singapore are getting more benefit now that before as its three times as much income as fifty years ago. The carbon intensity of Singapore has fallen sharply In 2015 Singapore was emitted 0.2 kilograms of carbon to produce one dollar of output and now they emit only 0.05 kilograms which has decreased.
Lastly the distribution of income. The distribution of income has become equal for the citizens of Singapore now and this credit goes to heavy investments in the making of human capital more skilled as well as the tax transfer system has become more fast and progressive comparing to the other previous years. Gini coefficient after taking account of taxes and transfers was 0.41 in the year 2015 and today it is 0.36. But the wealth inequality have stayed constant. Now the top one percent of wealth holders in Singapore own sixty percent of the total wealth which is a very big amount.
Export-led Industrialization through Multinationals
Very few expected Singapore to survive and have bright future when they left the Federation of Malaysia in the year 1965. Singapore’s first Prime Minister Mr Lee Kuan Yew said that the idea of an independent Singapore was a “political, economic and geographical absurdity”. And how it’s not that hard to see that scenario. In the year 1965 Singapore has no natural resources, no hinterland and so industry but an island of 580 square kilometers at a low tide. It was not only about food and energy but also water and the outside world. In Singapore the industrial strife was very common and the unemployment rate was close to nine percent. The Singapore’s birth pangs were traumatic. Separation from Malaysia meant the loss of not just a common market but a hinterland. Due to Indonesia’s Confrontation the southern hinterland of Singapore was cut off and also the fledgling nation’s traditional role as an entrecote trading post for the region. In 1968, the British government announced a withdrawal of its troops from Singapore, which left thousands of workers without a job and as much as a fifth of the economy at risk of coming to a halt. Surviving as a nation and creating a better life for the people were thus the over-riding priorities. And economic growth was seen as the principal means to help achieve this. The government made two strategic decisions – both sharply at odds with the conventional economic wisdom of the time. In favor of led export industrialization the first was to shift away from the import substitution. The second part was the global multinational corporations as vehicles to get the industrial growth. These two decisions were the most important decisions that actually helped played a very vital role in the making of the nation a successful one. Singapore got an advantage in the sector of promoting their Export and also promoting the foreign direct investment at the time when only few other countries were doing it. But there was an advantage as Singapore had to work very hard to realize the condition. The government developed industrial land, put in place infrastructure facilities, reformed labor laws to promote industrial peace, and invested in basic education with emphasis on technical skills relevant to industrialization. Sound fiscal and monetary policies ensured macroeconomic stability and underpinned investor confidence. The two strategies paid off handsomely. With the year 1975 Singapore had established a substantial industrial base by manufacturing a share of GDP raising to twenty two percent from fourteen percent in the year 1965. The economy at that time had full employment and it was very visible and clear the Singapore had to move up the value chain towards more capital-intensive and skill intensive activities. The compositional change within manufacturing was striking. Industrialization began within the Sixties with factories manufacturing things like matches, fish hooks and dipteran coils. By the way, for those unfamiliar, mosquitoes accustomed unfold severe diseases within the tropics in those days till the disease-causing ones were eradicated in 2033 by genetic modification. In any case, these labor intensive industries saw a gentle decline through the Seventies. By the late Seventies and early Nineteen Eighties, we tend to saw the emergence of sturdy clusters in higher worth supplemental natural philosophy, petrochemicals, part and preciseness engineering. Within the Nineteen Eighties, Singapore became the world’s leading producer of disk drives Associate in Nursing early sort of memory storage employed in computers at the time. The primary twenty years of Singapore’s economic history might be represented because the “take-off” section. It absolutely was the amount once the economic fundamentals of prudent public finances, sound financial policies, co-operative industrial relations, outward orientation, and market-based methods took root. The economy grew by a median of regarding ten every year throughout this era, and Singapore emerged as a freshly industrial economy at the forefront of developing countries.
Liberalization and the Rise of Modern Services
In 1985, the Singapore economy went into recession the sole time in our history the domestic economy narrowed whereas the worldwide economy was still growing. The 1985 recession exposed structural strains within the economy that had up to now been cloaked by robust economic process. Because the earlier part of “catch-up” growth came to Associate in nursing finish, resource constraints and decreasing returns to investment began to line in. the value advantage that Singapore enjoyed began to slender. The 1985 recession was a major milestone in Singapore’s development history. It light-emitting diode to an elementary review of the policies and techniques that prevailed at the time. The foremost four BIS central bankers’ speeches vital outcomes from that amount of review that continuing into the Nineteen Nineties were the structural reforms to be enhance wage flexibility within the labor market. Faucet a lot of resolutely into regional markets for trade and outward investment. Accelerate the pace of business upgrading. Promote innovation, enterprise, and entrepreneurship within the economy; and liberalize numerous services sectors admire finance, telecommunications, and utilities. In fact, the key story post-1985 recession up until the worldwide monetary Crisis of 2008 was the increase of contemporary services as a twin engine of growth aboard producing. The share of contemporary services in GDP accumulated steady, from 16 PF in 1965 to pure gold in 1985 and twenty eighth in 2010. Monetary services. Singapore was already a thriving regional heart since the Seventies. Within the late Nineteen Nineties and early 2000s, the insurance and securities industries were utterly liberalized and progressive steps were taken to open up the domestic industry to foreign competition. Business services. A broad vary of business activities accounting, law, advertising, and practice grew in importance, taking part in a crucial role in cementing Singapore’s standing as a regional hub. Info-communications services. The govt. commenced an idea to computerize the government officials within the early Nineteen Eighties. This helped to kick-start the info-communication services business, one in all the mainstays of the economy ever since. In 2005, the govt. determined to permit 2 casinos to control at intervals integrated resorts that conjointly enclosed leisure facilities, business and convention zones and high-end shops. This sparked the expansion of a thriving recreation services business over consequent few decades, attracting the burgeoning Asian bourgeoisie. This second part of our economic development primarily saw the transition of Singapore from Third World to 1st World. By 2010, Singapore was Associate in Nursing affluent society and a world town, at the cross-roads of international flows of trade, investment, finance and talent. Real GDP grew a median six.7% once a year throughout this era. It had been conjointly an amount within which the economy was tempest-tossed by one crisis when another: the Asian monetary Crisis in 1998. The collapse of the worldwide IT business in 2001. The unfold of the deadly respiratory illness virus in 2003; and therefore the world monetary Crisis in 2008. However the economy grew in resilience, rebounding sharply and rising stronger when every economic shock.
Demographic Slowdown and Economic Restructuring
The dominant theme within the third section of Singapore’s economic history was the overcoming of resource constraints through a big restructuring of the economy. Whereas Singapore had perpetually been in need of land and labor, these constraints came to a head within the 2010s. By 2011, annual growth within the total operating age population had declined to lower than three, and continued to fall steady over the last decade. Foreign labor, that had driven Singapore’s labor force growth since the late Nineteen Seventies, was already third of the whole work force. It absolutely was neither economically economical nor socially fascinating to permit the foreign work force to expand a lot of quicker than the native work force. By 2020, average total labor force growth was right down to I Chronicles once a year. The central thrust of economic ways within the 2010s and early 2020s was thus to shift to a productivity-driven growth model. The aim was to extend productivity growth to a minimum of 2 hundredth once a year, from the 1.4% averaged throughout the 2000s. The expansion of lower-skilled foreign labor was checked through will increase within the foreign employee levy and reductions within the foreign employee dependency magnitude relation ceilings. Monetary incentives got to companies to undertake capital deepening and adopt technology solutions to boost productivity. Programs were place in situ to assist Singaporeans develop and master skills in new growth clusters. Whereas the producing sector had frequently undergone restructuring and stirred up the worth chain within the preceding 5 decades, this was the primary time the complete economy was undergoing such a transition. It verified significantly difficult for several ancient domestically-oriented services like retail, cordial reception, construction, land, and social services, that had come back to be heavily obsessed on low-cost labor over the decades. Whereas several companies in these sectors with success upgraded themselves and have become a lot of economical, there was a considerable reduction within the size of those sectors by the first 2020s. This crystal rectifier to a spirited scheme that created jobs in areas from analysis and coaching to conventions for medical professionals each regionally and abroad, additionally to the big and various range of excellent jobs in hospitals. This third section of Singapore’s economic history marked the foremost vital decrease in Singapore’s economic process, with real value growing by three.6% once a year. However, it conjointly marked the painful however triple-crown economic transition towards productivity-led growth. By 2025, the economy had matured, with productivity growth accounting for just about all of economic process.
I have represented the expansion of our economy over the last one hundred years, principally from the angle of commercial developments, technological trends, and different world forces. It’s a story of continuous restructuring, created potential by a considered mix of the invisible hand of the market and therefore the visible hand of fine government. However the key non-economic issue that created this development journey potential is that the culture of our folks. It’s a culture of innovation. Today, we’ve an extremely productive and engaged force with deep skills, regularly learning and taking advantage of latest technologies, and building meaning careers. It’s this spirit of constant adaptation and long learning that has it’s conjointly a culture of resilience. Singapore has undergone numerous upheavals and crises over the last one hundred years – recession, terrorism, pandemic to not mention the dislocations and anxieties caused by economic process, technological advance, population ageing, and global climate change. Our strength has not been to insulate ourselves from crisis however to reclaim from it, stronger and a lot of resolute. Finally, it’s a culture of cohesion. we’ve come back this way as a result of we’ve worked along and stayed along, with people who have done well doing their half for the less lucky. it’s not solely a couple of disposition to pay higher taxes to support Associate in Nursing ageing population however the spirit of financial aid and volunteerism that has taken root in our society, particularly over the last fifty years. Our economic success couldn’t potential while not this deeper social cohesion that has control the state along.
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