1 INTRODUCTION
This paper will first describe how two nations sharing similar history went on their different paths in developing their economies. Then, this paper would describe three components that helps maneuver Singapore towards outstanding economic development based on 3 principles 1) leadership 2) strategy and 3) implementation. Thirdly, negative implications that may have been brought about by the development policies will be discussed in Section 4. Lastly, the conclusion would be underlined.
2 TEARY SEPARATION: SINGAPORE & MALAYSIA FATEFUL TWIST IN ECONOMIC DEVELOPMENT
Economic advantages have been the blessing for Singapore and Malaysia historically. At the time of separation, Malaysia’s abundant natural resources have ranked herself among the world’s leading producers of three valuable commodities, rubber, tin, and palm oil, and also a significant iron ore producer (Economic Planning Unit, 2014). These export industries gave Malaysia comparative advantage to invest in industrial development and infrastructure projects. Malaysia has embarked on the First and Second Malayan Plans (1956–1960 and 1961–1965 respectively) through state investment in industry and infrastructure; aimed to reduce Malaysia’s dependence on commodity exports and provide alternative sources of employment especially for rural Malay. Singapore on the other hand, faced issues of sovereignty, housing, education, lack of natural resources, land scarcity as well as pressing problem of unemployment which ranged between 10–12%. These deadly combination would be the potential trigger to civil unrest and bleak economic future of Singapore.
In light of these comparable circumstances of Malaysia and Singapore at the time of separation, one question that could b...
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The meaning of actual growth is that an increases in real Gross Domestic Product (GDP) by shifting an aggregate demand to the right. An increases in net exports which is exports minus imports, to the rest of the world raises aggregate demand, this in turn will leads to a more balanced increases in GDP via the multiple effect. Singapore is a countries that depend more on the exports for economic growth. Thus, net exports is make up the largest component of Singapore’s GDP. Hence, increases of actual growth can also help Singapore to achieve full employment or the alternatively low unemployment
The Singapore government attracts foreign business to invest in the country by offering trade agreement practices and their open economy. The advantage of having foreign business
One caveat to the strength of Singapore’s is the amount of foreign investments there. Its economy is not as diverse as the United States. Recently, the government has invested in diversifying the economy. As a result, the tourism, pharmaceutical, and many other industries have flourished. However, competition among financial institutions, particularly in banking, is significant and should be considered as it is one of Singapore’s core elements in its economy. PESTLE analysis also reflects this and others such as labor shortages, rising labor costs and a decline in
Malaysia is located in the south-eastern Asia, bordering Thailand and northern one-third of the island of Borneo, bordering Indonesia, Brunei, and the South China Sea, south of Vietnam. Due to its locations, it has been colonised since the late 18th centuries by many countries. Since 1965, Malaysia has had one of the best economic records in Asia, with GDP average of 6.5% growth for almost 50 years. The economical development especially boosted during 1981 and 2003 under the governance of Prime Minister Mahathir bin Mohamad. Malaysia succeeded in diversifying its economy from dependence on exports of raw materials to expansion in manufacturing, services, and tourism. Also, the current Prime Minister continues to pursue pro-business policies .
It all began in 1979, Malaysia’s Father of Modernisation, Tun Mahathir Mohamad, (then the Deputy Prime Minister of Malaysia), mooted the idea of establishing an automotive assembling and manufacturing industry in our country. It was Tun Mahathir’s dream to accelerate Malaysia’s industrialisation capabilities to match those of developed nations. His dream became one step closer to reality when the Cabinet approved the National Car Project in 1982.
Singapore has grown from being level with the rest of the world average in the 1950s and 1960s to a steady rise in growth starting in the 1970s all the way up to 2008. Singapore has rapidly began to close the gap between them and the United States as far GDP per capita is concerned, and with this begs the question to what is going on with Singapore’s economy? Mitchell states that Singapore has found that a “small government and free markets are a recipe for strong growth and rising levels of prosperity”. Singapore has found this as the best way for them to thrive and they have taken this to full advantage as they have slowly climbed to the tops of the charts of the worlds’ economies and have not looked as though they have turned back. (Mitchell
Malaysia has one of the highest standards of living in Southeast Asia and a very low unemployment rate (3%). A large income of Malaysia comes from exporting palm
The last was the welcoming of the education. In the early days of Singapore, the country was doing a lot of manufacturing and assembling goods. This particular industry grew stagnant around 1960’s at around 12% of the GDP. Also during this time the post-war baby boom and free immigration policies resulted in a population growth of around 4.4% annually and that got paired with an unemployment rate that grew to 9.2% around 1966. This made the government realize that rising unemployment rate was a problem that needed solving urgently. Because of the lack of resources, the government also knew that human capital was going to be its biggest resource and thus in order to shift to an export economy an education system had to be put in place.
U.S. Department of State. (2010, October 9). Background note: Singapore. Retrieved April 4, 2011 from http://www.state.gov/r/pa/ei/bgn/2798.htm
Singapore acts as a role of an entrepôt for Southeast Asia due to their strategic location, port infrastructure and highly skilled workforce. Singapore also purchases raw materials from other country and then refine the product into a better product to re-export. The reason for Singapore to do this is because of the lack of human and natural resources.
Singapore as a country has had various transformations throughout its history, however the period 1950 and 1970 was quite critical. Much of these changes had a lot to do with the development of trade and manufacturing. This is without forgetting the financial sector where the intention was to come up with a financial hub that could be used in economic development. Looking at the case of Singapore, we would say that it is a productive economy with a very high market competition. This observation has been further clarified by the Swiss International Institute for Management Development, going with their report that they released in the year 2001 (Chellaraj & Mattoo, 2009). In this study, we intend to evaluate the case of political economy of development in Singapore and examine the tensions between the state and various economic institutions. In additions to examining this institution, we would also like to examine how these variables have contributed towards the attainment of favorable growth rates and economic prosperity.
As Singapore’s current replacement in fertility rate is 1.24, the chances of increasing the population growth to a consistent number is slim. Therefore, the only option to keep up with the growing workforce is to accept a larger pool of migrants which Singaporeans have to adapt to. Overall increasing the productivity rate of the country, which helps to bring in more revenue. But the setbacks are that the government may be viewed as not being for its people, but instead, only for the interest of foreign talents entering the country. Overall, it was mostly successful towards benefiting Singapore’s man power and productivity as a whole, as well as, increasing the
Singapore gained its independence in 1965.It has been growing gradually and increasingly in the economy. I is now included among the world’s most competitive economies. This was made possible by being an public business globally, with a good business environment and a substantial political market, making it a popular country to invest in globally.
Using Singapore to debate has an interesting point of view. After it separation from Malaysia at 9 of August 1965. The nation became an independent state. Singapore was on her own, a tiny island lack of natural resource such as oil and rubber plantation, and on the other hand Singapore own a strategic harbour location.
The oil and petroleum industry in Malaysia operates under an oligopolistic market structure. Both PETRONAS and Shell are renowned firms that produce and sell petroleum in Malaysia. Incorporated on 17 August 1974, PETRONAS is Malaysia’s national oil company, assigned with complete ownership and control of the petroleum resources in Malaysia. Throughout the years, PETRONAS grew into a “completely integrated oil and gas corporation and is ranked among FORTUNE Global 500® largest corporations in the world” (PETRONAS, 2014).