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EG0001 > Economic / industrial development in SG > Flashcards

Economic / industrial development in SG Flashcards

1
Q

What happened to Singapore’s economy over the past 55 years?

A
  • A lot of economic development
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2
Q

What is Singapore’s economy?

A

Highly developed, trade oriented economy

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3
Q

What is Singapore’s economy known for in the world?

A
  • Least corrupt
  • Most pro-business
  • Most open and globalised in the world
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4
Q

What is the ranking of Singapore’s container port?

A

3rd busiest in the world

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5
Q

Who is Singapore’s current biggest trading partner?

A

China

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6
Q

What are the 6 phases of ECONOMIC DEVELOPMENT STRATEGY OF SINGAPORE

A

Phase 1: Import substitution (1959-65)
Phase 2: Export orientation (1966-78)
Phase 3: Industrial restructuring (1979-84)
Phase 4: Economic diversification (1985-92)
Phase 5: Further restructuring (1993-99)
Phase 6: Knowledge-based economy/KBE (>2000)

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7
Q

What happened during Phase 1: Import substitution (1959-65)

A
  • self-governance to a federal state
  • Malaysia episode (a bigger hinterland)
  • UN Report (1961) & the Winsemius Plan
  • open-door policy to attract foreign
    investment
  • 14% unemployment in 1959
  • pioneer status for labor intensive industries
  • setting up of EDB in 1961 to promote
    industrialisation - protectionist policies using tariffs to shield
    local industries from foreign competition
  • unemployment remains high - 14% in 1965
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8
Q

What happened during Phase 2: Export orientation (1966-78)

A

Since independence in 1965:
- import substitution failed due to small domestic
market (no more hinterland) & no economy of scale
- British withdrawal compounded problem of
unemployment (loss of 38,000 jobs - 20% of workforce)
- adopted export-orientation approach through
industrialisation
- tariffs removed, export grew, balance of payment
improved, unemployment reduced
- full employment by early 1970s
- still a low-wage producer, attractive to MNCs as a
low-cost production base
- EDB granted investment incentives
- oil crises in mid-1970s cushioned (no recession)
- low-wage, labour-intensive industries threatened by
regional competitors (resource-rich neighbours) - restructuring began in late 70s for hi-tech, high value industry

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9
Q

What happened during Phase 3: Industrial restructuring (1979-84)

A
  • take-off to hi-tech, skill-intensive industries
    (higher value-added per worker, predecessor
    of knowledge worker today) - to computerise, automate & mechanise
    operation, using capital-intensive equipment
    and technology-based processes
  • EDB-MNC Training Centres established for
    skilling the workforce
  • increased emphasis on R&D
  • high-wage producer, levy on unskilled
    foreign workers
  • develop high value-added services
  • wage increases» productivity growth,
    precipitating first Singapore recession in
    1985 (minus 1.5% GDP growth)
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10
Q

What happened during the 1985-1986 recession?

A

1985-86 Recession
The recession in 1985/86 was triggered by the
collapse of world commodity prices including oil.
Weaknesses of our earlier development model:
- lack of diversification of source of growth,
- over reliance on manufacturing especially
electronics & construction,
- poor labour productivity gains relative to wage
costs, amplified the downturn in our main export
markets of US and Japan.

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11
Q

What is the role of the economic committee?

A

chaired by Lee Hsien Loong, the Minister of Trade and Industry.

brought together public and private sectors and union leaders to craft immediate remedial action.

1986 marked a shift in economic strategy.

Economy broadened to include services as a pillar of growth to complement manufacturing.

Immediate wage freeze and CPF cuts to restore competitiveness.

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12
Q

What happened during Phase 4: Economic diversification (1985-92)?

A
  • First economic recession in Singapore in 1985 - Economic Committee chaired by BG Lee - a more broad-based economic profile targeted
  • towards more diversified growth
  • series of cost-cutting measures (including CPF)
    implemented
  • economy recovered in 1986 (V-shaped growth)
  • EDB promoted total business concept with support
    services of R&D, design, product development,
    technical servicing, marketing, distribution and fund
    management to complement hi-tech manufacturing
  • “Not to put all eggs in same basket”
  • upgrading of local firms through partnering with MNCs - growth triangle of Singapore-Batam-Johor in 1989 - unemployment fell to record low of 1.7% in 1990
  • by 1990, Singapore became a Newly Industrialised
    Economy or “Asian Tiger” (with Hong Kong, South Korea
    & Taiwan)
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13
Q

What happened during Phase 5: Further restructuring (1993-99)

A
  • Restructuring domestic sectors
  • relocating low value-added industries overseas
  • promote new economic activities to become an
    international business hub
  • emphasise capital market development and VC
    (Venture Capital) industry
  • Regionalisation & globalisation - Government-linked companies (GLCs) taking lead (into China, India & ASEAN)
  • Grooming promising local companies (PLCs)
    to become regional MNCs (those with annual
    turnover >$100m) - Fears of hollowing-out, compounded with Asian financial crisis (1997)
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14
Q

What happened during Phase 6: Knowledge-based Economy (>2000)?

A
  • Into the borderless world of knowledge-based
    economy (KBE)
  • globalisation (WTO) & hyper-competition
  • liberalising telecoms, banking & services industries
    (healthcare, education, tourism etc) - Develop manufacturing & services clusters
  • enlarge external economy (grow the GNP) - further diversify FDI destinations to non - traditional
    countries like Middle East, Latin America, Eastern Europe, (South) Africa etc. - integrate domestic & external economies for bigger GNP (M&As by GIC, Temasek, Singtel, PSA, DBS, CapitaLand)
  • continue to attract foreign talents in IT, AI, life-sciences,
    environment technology, electronics, digital services
    (media, commerce and finance, data analytics,
    cybersecurity etc) and other knowledge industries
    (creative, venture capital etc.) - maintain economic resilience, spearhead economic redevelopment & reduce vulnerability
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15
Q

What happened during the 2009 recession?

A

t was more severe and triggered by the collapse of banking and financial system in the US initially spreading to Europe and other parts of the world.

All major regions of the world were experiencing
economic decline at the same time, which makes
this the first global recession in the post-war period

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16
Q

What principles does the government adopt in economic development?

A

Adopts principles of free market and outward orientation

17
Q

What economic environment does the government provide?

A

Provides stable macro-economic environment of

  • political stability & pro-business legislations
  • favorable tax incentives
  • harmonious industrial relations & disciplined workforce
18
Q

What soft infrastructure does the singapore government provide?

A

Education system

19
Q

What are the key challenges facing Singapore’s economy?

A

• Lower workforce growth due to decline in fertility rate
and aging population
• Lower workforce productivity
• Higher rental and business cost (higher property prices,COEs and manpower cost etc)
• Lack of certain skills in identified growth sectors
(banking and finance, FinTech, healthcare, biomedical and pharmaceutical, clean energy, digital media, tourism and hospitality etc)

20
Q

What was included in the economics strategy report in 2010?

A
  • Higher productivity growth 2 to 3% per year.
  • Improve skills and less reliance on cheap foreign labour.
  • Increase spending on R&D to 3.5% by 2015.
  • Help SMEs grow. Doubling SMEs with revenue > $100m to 1000 by 2020.
  • Distinctive Global City – new waterfront city; underground space; a cultural capital and home to diverse talents.
21
Q

What are the 3 main potential threats and opportunities for Singapore’s economy?

A
  1. Developments in global economy, including structural changes in China and US, and technological disruption, will bring upheaval in next few years.
  2. China’s move away from an export – and investment-driven economy to a consumption and services economy, and policy uncertainties from the US
  3. Asia is expected to remain the fastest-growing
    region of the world despite the global slowdown, and Singapore is in a good position to be part of the growth if it seizes the opportunity
22
Q

What is the Committee on the Future Economy (CFE) 2015?

A

Make Singapore a vibrant and resilient economy with sustainable growth that creates value and opportunities for all in a VUCA world (volatile, uncertain, complex, ambiguous).

CFE will build on and update the Report of the Economic Strategies Committee of 2010 and address five areas of Singapore economic development.

  • future growth industries and markets
  • corporate capabilities and innovation
  • jobs and skills
  • urban development and infrastructure
  • connectivity

The CFE has completed its work by February 2017.

23
Q

What are the 7 strategies to fulfil CFE vision?

A
  1. Deepen and diversify Singapore’s international connections
  2. Acquire and utilize deep skills
  3. Strengthen enterprise capabilities to innovate and scale up
  4. Build strong digital capabilities
  5. Develop a vibrant and connected city of opportunity
  6. Develop and implement Industry Transformation Maps
    (ITMs)
  7. Partner each other to enable innovation and growth
24
Q

How do we intend to achieve CFE 1. Deepen and diversify Singapore’s international connections

A
  • Press on with trade and investment cooperation
  • Set up a Global Innovation Alliance (GIA)
  • Deepen knowledge of our markets
25
Q

How do we intend to achieve CFE 2. Acquire and utilise deep skills

A

• Facilitate acquisition of deeper skills
• Strengthen nexus between acquisition and
utilisation of skills

26
Q

How do we intend to achieve CFE 3. Strengthen enterprise capabilities to innovate and scale up

A

• Strengthen our innovation ecosystem
• Support enterprises to scale up
• Catalyse the private sector to provide more growth
capital

27
Q

How do we intend to achieve CFE 4. Build strong digital capabilities

A

• Help small and medium enterprises (SMEs) adopt
digital technologies
• Build deep capabilities in data analytics and cybersecurity
• Harness data as an asset

28
Q

How do we intend to achieve 5. Develop a vibrant and connected city of opportunity

A 
• Invest in our external connectivity
• Continue to plan boldly for growth and city
rejuvenation
• Build partnerships for a vibrant city
• Develop exportable capabilities
29
Q

How do we intend to achieve 6. Develop and implement Industry Transformation Maps (ITMs)

A

• Tailor ITMs for each industry
• Adopt a cluster approach to maximise synergies
across industries

30
Q

How do we intend to achieve 7. Partner each other to enable innovation and growth

A
  • A greater role for TACs (Trade Associations and Chambers) and unions
  • Create a regulatory environment to support innovation and risk-taking
  • Use Government lead demand to support the development of promising industries
  • Review and reshape Singapore’s tax system
  • Create a sustainable environment
31
Q

WHAT ARE THE CHARACTERISTICS OF THE FUTURE ECONOMY OF SINGAPORE

A

• A globalised economy, a key node in global network, linked to all major economies and emerging regions
• A creative and entrepreneurial nation, taking risks to start new businesses
• A diversified economy, powered by twin engines of
manufacturing and services
• A growing global footprint- intensifying overseas investment and growth of Singapore-based companies
• Singapore companies complement MNCs, new start-ups coexist with traditional businesses, exploiting new and innovative ideas

32
Q

ROLES OF ENGINEERS/PROFESSIONALS IN

SINGAPORE’S ECONOMIC DEVELOPMENT

A
  • Infrastructure development
  • Hi-tech, value-added manufacturing & services
  • Support services to MNCs
  • Technopreneurs & SMEs
  • R&D & innovations
  • International ventures
33
Q

Net Investment Returns Contribution (NIRC)

A

NIRC is the sum of contributions from the investment returns of our reserves and is made up of two components:
• Up to 50% of the expected long-term real return of the
relevant assets specified in the Constitution, and

• Up to 50% of the net investment income on the remaining assets.

EG0001 (12 decks)

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