Chp4newest 21 Century

Chapter 4: Sustaining Singapore’s Development in the 21st Century

Lesson Objectives:

You will learn- the need for sustainable development- the strategies for sustaining Singapore’s development

NE Message:We have confidence in our futureUnited, determined and well-preparedWe shall build a bright future for ourselves

Limited Land

Shortage of water

Shortage of Skilled Labour

RacialVulnerability

EnvironmentalPollution

Small and OpenEconomy

Dependence On ImportedTechnology

External Factors That Affect Singapore

Economic Slowdown In Other Countries

1997-98 Currency CrisisThe Currency Crisis resulted in a recession in Southeast Asia

Regional Impact:

Hanbo Steel, a large Korean chaebol,  collapses under $6bn in debts - first bankruptcy of a leading Korean conglomerate in a decade.

Somprasong is first Thai Company to miss payments on foreign debt

A series of debt laden companies in Southeast Asia resulted in the selling of Southeast Asian Currencies (devaluation)

External Factors That Affect Singapore

Economic Slowdown In Other Countries

International Impact:

Our economy is mainly an export oriented one. Our main customers (importers of our goods) are United States, Japan and the European Union.

If they decided to reduce the amount of goods and services that they import from us, our economy will suffer greatly.

During 1997-8, these countries reduced their demand for electronic goods. As such Singaporean workers in electronic goods were retrenched.

Socio-Political Unrest In Other Countries

Events in the region and the rest of the world can affect Singapore’s economy and society.

Examples:Vietnam war in 1970s and 80s, many Vietnamese tried to enter our country illegally to seek better life. As Singapore has limited resources, we cannot possibly support a large influx of refugees.

What do you think are the possible consequences of illegal immigrants in Singapore with regard to our society and economy?

Recent events in Indonesia has repercussions on Singapore as well. Our businesses in Batam and Jakarta were forced to cease operations temporarily due to the unrest in Indonesia.

Environmental Issues

Forest Fires:Forest fires in Indonesia in 1997 caused major pollution in Singapore. The haze that developed became a health hazard to Singaporeans. Elderly and asthmatics had to stay indoors. Tourists avoided Singapore and hence tourism revenue dropped.

The haze also affected Malaysia’s agricultural produce and hence prices for vegetables imported into Singapore was increased significantly.

Large scale oil spillsAs Singapore is an island state surrounded by sea, we are affected by major oil spills that resulted from tankers collision.

In 1997, 30 000 litres of oil spilled into the sea after the collision of 2 tankers off Singapore’s waters. Islands like Pulau Hantu and Pulau Sudong were severely polluted.

Summary of What You Learnt So Far!

1. Singapore has internal constraints which it needs to tackle.

2. The economics, socio-political and environmental problems of its neighbors may affect Singapore.

3. We live in a global world and need to be aware of what is going on in other countries. We are not alone!

8 Economic Strategies for Sustaining 8 Economic Strategies for Sustaining GrowthGrowth

•Moving Towards a Knowledge-Based Economy

•Improving Worker’s Employability

•Promoting Manufacturing and Services as Twin

Engines of Growth

•Building an Information Technology Infrastructure

•Going Regional and Global

•Developing Local Entrepreneurship and Techno-preneurship

•Promoting Research and Development

•Attracting Foreign Talent

Moving Towards a Knowledge Based Economy

Knowledge Based Economy >> This is an economy where information and knowledge drives economic

activities

In the 1990s, Singapore upgraded its machinery and skills of workers in order to compete with countries in the region.

During the 1997 Currency Crisis, Indonesian rupiah fell by 70%, Thai baht by 40-50% and Singapore by 20%. Our neighboring states now have lower labour cost than us.

Singapore realized that in order to compete, we needed to be more skilled and innovative.

A knowledge based economy requires the labour force to learn, process and apply knowledge in manufacturing and service activities. Singapore has started to focus her efforts in knowledge intensive industries e.g. electronics and Information Technology.

Improving Worker’s Employability

From the 1960s-80s, Singapore’s growth was driven by machinery and labour. Now we are shifting towards knowledge as the new driving force

Students are being taught to be more creative and resourceful in schools. Workers are encouraged to retrain and upgrade their skills. National Trade Union Congress pays 80% of such training costs for retrenched workers.

1998, Bukit Merah Skills and Development Centre (government run and funded) was set up to train workers in office, computer and industrial skills.

In the late 1990s, about 700, 000 Singaporean do not have an ‘O’ level certification. They had a hard time trying to find jobs. They were low skilled in a time when demand was for highly skilled workers

In response to this, the Ministry of Manpower created a job matching service. Low skilled workers were matched with high skilled jobs with companies who were willing to train them

The government also encourages employers to retrain workers instead of retrenching them. Employers were given grants by government to conduct such training. This way, the work force will be well prepared to handle more businesses when the economy recovers.Employees are encouraged to retrain whether he is a

professional or a blue collared worker. Engineers need to go for professional courses to upgrade their knowledge. A national centre for training and certifying taxi drivers was set up. This help to improve the quality of service provided by the drivers.

Workers also needed to be trained in IT skills in order to perform their tasks more efficiently . For KBE to succeed, workers have to be more competent and innovative to come up with new ideas and better solutions. Workers must take initiative for making changes beneficial to their work.

Workers initially resisted government’s call to retrain. However, with the 97 crisis, many realized that in order to employable, they needed to upgrade their skills.

They are now convinced that with retraining and upgrading they can keep and maintain their jobs.

Promoting Manufacturing and Services as Twin Engines of Growth

High Technology manufacturingRegional Service

Centre

We are developing into a world class university education and training, and health care services.In 1999, world renowned

institutions like John Hopkins Medicine and Georgia Institute of Technology opened education centre in Singapore.

We are also bringing in top academics and researchers to improve the research and education quality of Singapore.Singapore firms are encouraged

to combine their resources and expand their resources to be competitive I.e. DBS merger with POSB

Singapore continues to promote technology intensive, higher value added manufacturing services in the electronics and engineering fields.

We are venturing into Life Sciences which involve the study of genetics and development of new medical treatment I.e. gene therapy, new drugs and new food products.

We are trying to get more companies to use Singapore as their regional headquarters from which they will do business with other countries

Building An Information Technology (IT) Infrastructure.

The new era of technology requires a new infrastructure that will facilitate and support the use of IT

The IT infrastructure is an invisible network linking different parts of Singapore through computers

A highly efficient IT structure would encourage foreign companies to use Singapore as a Business and Industrial centre.

We have our IT 2000 plan. Singapore ONE, the world’s first nation-wide network was launched in 1996.

An IT infrastructure would support scientific research, innovation and business.

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Going Regional and Global (I)

Singapore has limited land and resources. We have to look beyond our national boundary to further our industrialisation programme.

There is a need to invest in our neighbors in the region. They have abundant land, low labour cost and new markets.

Singapore government and Singapore based companies will provide the infrastructure, expertise and money to develop the industrial parks in host countries. In return, the host country can provide us with land and labour.

The Economic Development Board (EDB) helps local companies as well as MNCs to go regional. They offer tax incentives for companies going overseas to set up factories. The government also helps by co investing with the private companies.

Going Regional and Global (II)

When our region was badly hit during the 1997 crisis, Singapore decided to go global. We started looking at China and South Asia.We also invested in new markets like Latin America, Africa, and Central and Eastern Europe.The Trade Development Board (TDB) gave grants for companies to enter into new markets. This is to encourage them to venture abroad.Government also set up funds to help companies to go global. PM Goh’s visit to South Africa resulted in a US$100 million S. Africa Investment Fund.However there is a danger that we may lose our people who “uproot” themselves and migrate overseas.

Developing Local Entrepreneurship and Technopreneurship

Entrepreneur: A person who displays skills such as risk-taking and initiative displayed in starting or running a business.

Developing Local Entrepreneurship and Technopreneurship

In order to sustain Singapore’s economic development, we need to have more entrepreneur. People who uses high technology to improve their goods and services and develop them into profitable business are known as technopreneurs.

Strengths of Singapore:Conducive environment, the right infrastructure.Our workforce is well educated Our people have strong foundations in Science and

Engineering

Government Support:One stop centre to assist technopreneurs in areas like

accounting, technical consultancy and business networking.

Provides grants to subsidise approved business expenses and R&D for 2 years.

Developing Local Entrepreneurship and Technopreneurship (II)Government Support: In the past bankrupt cannot do business but this

law has been changed to accommodate risk taking and allow those who failed to try again.

Entrepreneur are allowed to use their homes as a business office in order to help them cut cost.

Government recognises the contribution of local enterprise. Help is provided to groom promising companies in the area of financial help, manpower training and contacts for developing businesses in Singapore and overseas.

Courses/Education: Courses on technopreneurial skills are taught to

students Professionals in manufacturing industry come and

teach as well as to share their experience. NUS and NTU are conducting such programme

Promoting Research and Development

If Singapore wants to move towards KBE, we need to start developing our own technologies and talent pool. Relying on imported technologies is not a good strategy.

As such, R&D is becoming increasingly important in this 21st century.

Local enterprises are encouraged to partner with universities and national research institutions. In this way, we hope to come up with new ideas, methods and products which can be sold to the world market.

International partnerships are formed to promote science and technology exchanges of resources and information. Currently, we have science and technology agreement with countries like China, Germany and India.

Attracting Foreign Talent

Singapore’s population is decreasing and as such we need to import foreign talents to meet our manpower needs.

As of now, foreigners help to fill immediate needs in some high technology economic activities such as petrochemical and wafer fabrication. This is because we don’t have enough trained Singaporean to handle these jobs.

Singapore has about 3600 local Research Scientists and Engineers (RSEs) and 700 RSEs from Overseas. By 1997, we have a total of 11,300 RSEs of which 2300 were foreign RSEs.

Singapore is continuing to train and develop its local R&D talent pool.

Foreign talent has an advantage of overseas business contacts. As such they can create more business opportunities and jobs in Singapore.

We have already set up information centres in London, Los Angeles, Perth and Hong Kong to give more knowledge about Singapore. We also actively bring in foreign students to raise the level of competition for the local students.

Environmental Strategies for Sustainable Development

Improving the Infrastructure for Waste Disposal

Using Improved TechnologyPreserving

Nature Sites

Increasing Public Awareness

Promoting Regional and International Co-operation

Improving the Infrastructure for Waste Disposal

As Singapore becomes more developed, people tend to consume more and in the process more waste is produced

Singapore has 6 existing plants for treatment of human waste. These structures usually take up a lot of valuable space in land scarce Singapore.To make matters worse, they emit a foul smell. It is thus necessary to keep a buffer zone of 1 kilometre around the sewage plants.

We are building compact, covered structures to 1) save space, 2) reduce emission of foul smell and 3) process waste more efficiently.

At present, garbage is collected and burnt at the incineration plants in Ulu Pandan, Tuas and Senoko. The burnt ash is dumped at landfill sites.

Improving the Infrastructure for Waste Disposal(II)

These plants also produce less residue and will take up less space.

The heat from the burning of garbage can be used to generate electricity. They also extract useful materials from the ash for reuse in steel mills.

Using Improved Technology

We are using technology to help reduce the pollutant we emit.

We use natural gas in our power stations to produce electricity. As a clean fuel, it gives out less pollutant.

Senoko Power Station uses a special type of machinery that is high in power generation efficiency but low in pollution.

A power station

Using Improved Technology(II)

Industries are encouraged to cut down on pollution and waste. Monetary rewards are given to industries who cut down pollution and waste and those that install pollution control equipment.

Mass Rapid Transit and Light Rapid Transit are part of the transport system that aims to be energy saving and less pollutive. Rebates are given to motorists who buy electricity-powered cars from early 2001.

LRT in action (Click to learn more)

Mission Statement

The Company's mission is to provide mass rapid transit passenger service along major high density travel corridors in Singapore in order to satisfy the needs of the travelling public for a safe, reliable and user-friendly MRT system at competitive fares. SMRT aims to secure reasonable returns for its shareholders. The Company also strives to provide its staff with development opportunities, remuneration and service conditions commensurate with community standards and to promote a culture whereby staff will be productive, motivated and loyal.

Using Improved Technology(III)

Singapore is trying to develop into a regional centre for environmental technology. Research and Development is necessary to focus on areas such as harnessing of solar energy, industrial waste reuse, gas powered vehicles and recycling technology.

The Environmental Technology Institute was established to assist local industries in developing ‘green’ technologies in June 1996.

Scholarships were given to people in the private sector who seek to study higher degrees and conduct local and overseas research programmes in development of ‘green’ technologies.

Preserving Nature Sites

Singapore has set aside 5% of it land to be nature sites, despite our limited land resources

Our nature sites include primary forests to mangrove swamps

We believe that the variety of wildlife has potential as grounds for recreation, educational and scientific research

Chek Jawa at Pulau Ubin

Increasing Public Awareness

In order for Singapore’s effort in preserving the environment to be successful, we believe that education the youths in school and members of the public to be the key factor.

Programmes such as Clean and Green Week is held annually since 1990. Exhibitions, seminars and workshops, beach cleaning and trees planting are organised to heightened public awareness.

Awards like the Green Leaf Awards are given to individuals and organisations, in recognition of their achievements in preserving the environment.

DPM Lee giving our the Green Leaf Awards

Promoting Regional and International Co-operation

Singapore believes that environmental responsibility among all countries is important.

At the regional level, we have worked with ASEAN to combat the haze that affected the region. We provided satellites to help Indonesia detect the location of forest fires and haze. ASEAN has work up an action plan to be implemented to prevent the recurrence of the problem.

At the international level, we have signed agreements with other countries to phase out the use of harmful ozone depleting substances. By 1st Jan 1996, Singapore has completely phased out the use of chlorofluorocarbons (CFCs). Our efforts were highlighted in UN in 1988.