Transcript Slide 1

SINGAPORE
Path to Development
Prof. Stephen Lawrence
Leeds School of Business
University of Colorado
Singapore Skyline
Southeast Asia
Malaysian Peninsula
http://www.fsas.upm.edu.my/~masdec/web/straits.html
Singapore Island
Singapore Today
• Population – 4.5 million
– Fertility rate of 1.07 children (3rd lowest in world)
– Gov’t planning growth to 6.5 million by 2020
• Size – 270 sq. miles (704 km2)
– World’s second most dense country
• Ethnic background of population
– Chinese (75%), Malay (14%), Indians (9%)
• Official languages
– English, Mandarin, Malay, Tamil
Downtown & Singapore River
Singapore River at Sunset
Early History
• Second Century AD – First evidence of human
settlement
• Became an important trading post
– Sumatran Srivijaya empire 1000-1400
– Called “Temasek”
• Declined after 1400
• Sacked in 1613 by Portuguese
• Reverted to a fishing village with few inhabitants
until 1819
History from 1819
• 1819 – Britain established a trading post on
Singapore Island
– Sir Thomas Raffles, East India Company
– Free port (no tariffs) – largely entrepôt port
– Spices, rubber, palm oil; goods from China,
Indonesia, Malaya
• Quickly become an important trading port in
SE Asia
– Principal British presence in SE Asia
Sir Thomas Raffles
Raffles Plan for Singapore (1822)
Singapore Riverfront (c. 1890)
Boat Quay 1929 and Today
World War II
• British believed in “Fortress Singapore”
• Japanese invaded Malaysia on 8-Dec-41
– Leap-frogged down Malay Penisula
– Light tanks and bicycle infantry
• Singapore surrendered on 14-Feb-42
– Harsh 3½ year Japanese occupation
– 5-25,000 Chinese Singaporean’s executed
• Japanese surrendered on 15-Aug-45
– British returned to Singapore on 9-Sep-45
Fall of Singapore & Surrender
Post-WWII Events
• 1955 – Partial internal self-government
– Increasing social unrest, anti-colonial feelings
– Hock Lee bus works strike and riots (1955)
– Chinese Middle School riots (1956)
• 1959 – Full internal self-government
– People’s Action Party (PAP) sweeps elections
to Legislative Assembly (41 of 53 seats)
– Lee Kwan Yew becomes Prime Minister
PAP Initiatives (early 1960’s)
• Trade unions consolidated into one
– National Trades Union Congress (NTUC)
– Strong government oversight
• Education system revamped
– Create a skilled workforce
– English chosen as language of instruction
• High-rise low-cost housing blocks
– 25,000 apartments in first 2 years
Singapore Housing Blocks
Singapore Economics
Per Capita GNP Growth
http://www.pacificbridge.com/publication.asp?id=8
GDP per Capita (2005)
Singapore is 23rd ($26,836)
World GDP 2005 – Top 20 Nations
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita
Ranking Singapore
http://www.sedb.com/edb/sg/en_uk/index/why_singapore/singapore_rankings.html
Economic Strategy 1819-1950’s
• Regional entrepôt
• Natural, deep harbor,
• Strategic location between SE Asia and
Europe
• Free-port policy
• Imported European manufactures to region
• Exported regional commodities to Europe
• Ancillary storage and warehousing,
shipping, and banking services.
Economic Strategy 1960-80’s
• 1960’s – Focus on low-cost manufacturing
• 1970’s – Focus on labor skills & technology
– Machine tools, petrochemicals, electronics, and
precision work
• 1980’s – Capital intensive high tech
– Computers & peripherals; electronic medical
instruments; automotive components; specialty
chemicals & pharmaceuticals; optical & photocopying
equipment
http://www.nationsencyclopedia.com/Asia-and-Oceania/Singapore-ECONOMIC-DEVELOPMENT.html
Economic Strategy 1990’s
• Manufacturing and Services
• Transformation from a production-driven to
innovation-driven economy
• Focus on education and human resources
• Film, media, and publishing, arts and
entertainment, textile, fashion and design sectors
• Outsourcing of manufacturing to low-wage sites
in Indonesia and Malaysia
http://www.nationsencyclopedia.com/Asia-and-Oceania/Singapore-ECONOMIC-DEVELOPMENT.html
Economic Strategy 2007
• Global Hub for business and finance, logistics &
distribution, communications and information
– Key economic activities increasingly concentrated in
a few strategic centers
– Hub services extended “hinterland”
• Heavily investing in humans & infrastructure
– Education, training, and industrial relations
– Airport, seaport, telecommunications network,
biotech, financial and industrial facilities
• Regional investment
– Malaysia, Indonesia, China, India, Vietnam
Maritime Shipping
• Port of Singapore is busiest in world
– 24 million TEU’s in 2006
• PSA owns 26 ports in 15 countries
http://www.internationalpsa.com/factsheet/map.html
Global Shipping Routes
http://www.mts.gov.eg/comesa/English/maps/some_major_world_shipping_l.jpg
Largest Container Ports 2005
Singapore
Hong Kong
Shanghai
Shenzhen
Busan
Kaohsiung
Rotterdam
Hamburg
Dubai
Los Angeles
Long Beach
Antw erp
Qingdao
Port Kelang
Ningbo
Tianjin
New York/New Jersey
Tanjung Pelepas
Laem Chabang
Tokyo
0
5,000
10,000
15,000
20,000
25,000
TEUs (000)
http://en.wikipedia.org/wiki/List_of_world's_busiest_container_ports
Port of Singapore Today (2007)
Air Shipping & Passenger Hub
• Singapore Changi Airport
– Two terminals, third under construction
• SE Asian hub for passenger & cargo (2006)
– 35 million passengers
– 1.9 million tonnes
of cargo
• 25 “best airport”
awards (2006)
Singapore Exchange
• Formed 1999
– Merger between the Stock Exchange of
Singapore & Singapore International
Monetary Exchange
• 72% securities, 28% derivatives
• Strategy to be Asian gateway exchange
– Agreements signed with India & Abu Dhabi
– Agreements with London & Tokyo in works
Singapore Biopolis
• Campus for biomedical sciences
• Constructed 2003 to 2006 (two phases)
• Site for biomedical
science, research,
entrepreneurship
• 45+ companies
in residences
Top Singapore Companies
1. Caltex (energy)
2. Flextronics (manufacturing)
3. SingTel (phone company)
4. Singapore Airlines
5. Neptune Orient (shipping)
6. Keppel Corp (various)
7. DBS (development bank)
8. Fraser & Neave (food)
9. Singapore Technologies
Engineering (defense)
10. NatSteel (metals)
11. WBL Corp (various)
12. Singapore Press (media)
13. APRIL (wood & paper)
14. Asia Mobile (telecom)
15. Creative Tech (equipment)
16. Far East Group (real estate)
17. JBS Singapore (energy)
18. Kalama Services (energy)
http://www.transnationale.org/countries/sgps.php
Temasek Holdings (2007)
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•
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State-owned investment company
Portfolio = $100 billion
Revenues = $50 million
Invests in 100’s of companies
– SingTel, DBS Bank, Singapore Airlines, PSA
International, SMRT Corporation, Singapore Power,
Neptune Orient Lines
• 75% in Singapore companies
– Goal to reduce to 25% in time
• 18% annual return over 33 yrs of business
http://www.temasekholdings.com.sg/
Singapore Education 2006
• ~20% of national budget
devoted to education
• Literacy = 95.4%
• Annual budget = S$7.0 billion = $4.3 billion
• Total students = 532,225
• Budget/student/year = $8,142/student
• Students wear school uniforms
Singapore Education
• Principles
– Meritocracy
– Bilingualism (English + mother tongue)
– Financial assistance
• Higher Education
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–
–
–
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16 junior colleges
5 polytechnics
10 institutes of technical education
4 universities
10 specialized tertiary schools (e.g., business schools)
International Education Scores
Countries:
(sample)
Global
rank
Maths
Science
Score
Rank
Score
Rank
Singapore
1
643
1
607
1
Japan
2
605
3
571
3
South Korea
3
607
2
565
4
Czech Republic
4
564
6
574
2
England
18
506
25
552
10
Thailand
20
522
20
525
21
Germany
22
509
23
531
19
France
23
538
13
498
28
United States
24
500
28
534
17
Source: 1997 TIMSS, in The Economist, March 29th 1997
Average scores of 13 year old students
Government
• PAP dominant party for 40+ yrs
– PM Lee Kwan Yew 1963-1990
• Leadership based on Confucian principles
– Paternal authority; duty to take of people;
leadership by moral example
• “Soft” authoritarianism & incorruptible leaders
– Dissent and opposition stifled
• Democracy, but not in US/European sense
• “The city that works”
Haas (ed), “The Singapore Puzzle,” Praeger, 1999
Why Singapore has Worked
• Strong, incorruptible leadership
• Government-directed & involved economic
development and strategy
– Leverage natural advantages
• Focus on education & human capital
– Move up the food chain with prosperity
• Steadily increasing standards of living
– Citizens patient with government
Questions?