Singapore has few natural resouces but the country's mix of economic ambition and industrial strategies have produced 50 years of continuous growth.
Lee Song Im Channel NewsAsia 10 Sep 15;
SINGAPORE: Skyscrapers and distinctive buildings dot Singapore's downtown financial hub. But 50 years ago, it was a different story.
Singapore’s independence in 1965 signalled the end of the dream of a Malayan common market and the beginning of a host of economic challenges.
"Our primary challenge was high unemployment rate – it was 14.5 per cent. With the British pulling out, there were 40,000 jobs at stake,” said Mr Yeoh Keat Chuan, managing director of the Economic Development Board (EDB).
Singapore was on its own to seek its own market and livelihood. With no industries and poor infrastructure, the only way to get the wheels of its economy moving was to attract foreign capital.
"(The foreign capital) already have clients, international clients. So that helped us - instead of starting from day one again, they've already brought along a market for us,” explained Associate Professor Toh Mun Heng from the Department of Strategy and Policy at the National University of Singapore Business School.
The government began to devise plans to bring in the multinationals. Labour laws were tightened, industrial infrastructures set up and government organisations like the Economic Development Board and Jurong Town Corporation established.
"We were developing generic industrial land, because we were trying to support industries of all kinds. So long as their investors were prepared to come in to build a manufacturing plant and create jobs, we were prepared to support them,” said JTC Corporation’s CEO Png Cheong Boon.
Foreign companies were soon attracted, lured by Singapore's favourable investment policies and its approach to industrial relations.
"Starting in 1979, Singapore changed its politics from more labour content-based to a more sophisticated approach, starting with IC production and computer production. It was perfect for us, because we're coming into an environment where we also find experts which can deal with such issues. That was perfect for setting up,” said Pepperl+Fuchs’ managing director Juergen Seitz.
By the 1980s, Singapore was one of the leading production centres of consumer electronics in Asia. However, the period also coincided with Singapore's first post-independence recession.
"Singapore started to look at specific industries that were key drivers of the economy, for example, we started to look at the semiconductor industry, as one of the key drivers, or chemical industry as one of the key drivers,” said Mr Png.
To support these sunrise industries, Singapore developed specialised industrial parks. One of the first and high-profile projects was the formation of Jurong Island.
"We reclaimed the land around the seven islands off the shore of Singapore to form Jurong Island to support the whole energy and chemical industries,” said Mr Png. “We have companies in the petrochemical chain, co-locating next to one another. It allows companies to operate more efficiently, because you get the feedstock from your supplier next door, and then you supply your product to your customer next door. And that's the logistic efficiency that helps companies to be more competitive."
Clusters of gigantic cylindrical tanks amid a maze of pipelines now dot Jurong Island. The project's success was extended to the growing number of the world's leading energy and chemical companies setting up bases on the island. To date, it has attracted investments in excess of S$35 billion.
For half a century, Singapore has enjoyed almost unbroken economic success, driven by rapid industrialisation. But with India and China emerging as great industrial powers in recent years, Singapore has made a conscious effort to redirect growth.
"A shift from not just value adding but value creating, developing new products, services and solutions for the Asian market and global markets as well,” explained Mr Yeoh.
Mr Png added: "We may have to develop more innovative space, such as our food hub, surface engineering hub, where we provide common facilities and shared infrastructure which will help companies to reduce their space requirement and to help them optimise their productivity."
Last year, in a bid to maintain its global edge, Singapore revealed plans to be the world's first Smart Nation – an initiative aimed at harnessing technology to improve urban life. To realise this vision, public and private sector efforts will be integrated across a range of regulatory frameworks and industries.
"You have to have a concerted effort together, manage the situation together. I look at it as Singapore's effort to continue, to manage our strategy – the industrialisation strategy – as a continuum, to suit and to accommodate our ambition. And also to give ourselves a continuity, to continue to be relevant,” said Professor Toh.
- CNA/xq
