10 econ challenges

Question 1

1. Economic Vulnerability: Limited Access to Malaysian Hinterland

Answer 1

Elaboration: After Singapore became independent, Malaysia remained its main trading partner but there was limited trade due to the lack of a common market and direct access to the Malaysian hinterland. Malaysia reduced exports of raw tin and rubber to Singapore, preferring to process and export them directly. Explanation: Absence of a common market led to Singapore-made goods being taxed, increasing prices and reducing demand. Limited trade reduced job availability, posing a challenge for Singapore’s growing population.

Question 2

2. Economic Vulnerability: Threat of Unemployment

Answer 2

Elaboration: In 1965, 10% (70k out of 700k) of the labour force in Singapore was unemployed. Urgent need for job creation due to: (1) Large number of young people/school-leavers joining the labour force. (2) Decline in entrepot trade amid regional competition. (3) British troop withdrawal affecting over 40,000 jobs linked to goods and services for British servicemen. Explanation: Creating jobs was crucial to avoid discontent and instability. Failure to address unemployment could disrupt industrial peace and confidence in the government.

Question 3

1965 nominal GDP per Capita

Answer 3

US$500 (same level as South Africa & Mexico)
By 1990, GDP per capita had risen to about US$13,000, surpassing South Korea, Israel, and Portugal.

Present day: US $82,800

Nominal GDP per Capita: Real GDP per capita is a measurement of the total economic output of a country divided by the number of people and adjusted for inflation per year.

Question 4

Economic Vulnerability: Declining Entrepot Trade

Answer 4

Entrepot Trade: Type of trade where goods are imported from one country and re- exported to another country without undergoing significant change in form or quality
For more than a century, Singapore had been dependent on entrepot trade
However after WWII, entrepot trade began declining as competition with other ports grew Jobs which depended on entrepot trade hence depleted

What did Singapore hope to achieve with the setting up of the common market?
The setting up of the common market would remove tariffs on Singapore-made goods
This would have reduced competition between Singapore and Malaysia, which is richer in resources
It would have also created demand for Singapore-manufactured goods and jobs for locals

There was also rising nationalism throughout SEA, which led countries to seek to protect local industries by imposing high tariffs on imports from other countries.

Neighbouring countries also began choosing to refine their own raw materials and trade with the world via their own ports instead of going through Singapore.

Question 5

2 commodities SG made huge profits from importing from Malaya, processing then exporting in early 20th century?

Answer 5

Tin and rubber
Neighbouring countries also began choosing to refine their own raw materials and trade with the world via their own ports instead of going through Singapore.

Question 6

SOVEREIGNTY & INDEPENDENCE

Answer 6

SOVEREIGNTY

INDEPENDENCE

The authority or power of a state to govern itself.

Includes the power to make laws and control resources without being forced by other nations.

The state of being free from external control or support.

Allows the state to make its own decisions without interference and support from external nations.