sg_ec_2012_1 - For Far East and Australasia 2012 Singapore...

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For Far East and Australasia 2012 Singapore Economy Tilak Abeysinghe Introduction Singapore’s ascent from `third world’ to `first world’ status has been spectacular, particularly in view of the lack of natural resources; the island’s only assets have been its relatively minuscule population and its excellent geographical location. In terms of annual real per caput income, measured on the basis of purchasing-power parity at 2005 constant prices, Singapore reached the level of Switzerland by mid 1990, earlier than predicted, and by 2009 Singapore reached an income level of US $47,000, about US $7,000 more than the Swiss level. This stood in stark contrast to the situation in 1965, in which year the per caput income of Singapore was about US $4,700, compared with about US $22,000 in Switzerland. In 2010 Singapore’s indigenous gross national income per head was about US $42,000. . Owing to the 2008/09 global economic downturn, per caput income declined to about US $35,800 in 2008 and US $32,300 in 2009. In 2009-8 per caput household net wealth stood at about US $200,600. Even in terms of other development indicators, the country’s progress since 1965, when Singapore left the Malaysian Federation and acceded to independence, is unsurpassed. The infant mortality rate, which was above 26 per 1,000 live births in 1965, had declined to 2.0 per 1,000 by 2010, among the lowest in the world. Between 1965 and 2007 the proportion of people living in and owning publicly provided housing units increased from 4% to 80%, with total home ownership exceeding 90%; the adult literacy rate improved from 73% to 96%; the number of participants in the labour force educated to secondary level increased from 14% to 50%; the labour force with tertiary education went up from 2% to 36%; and life expectancy at birth improved from 66 to 81 years. When questioned about the success of Singapore, the response of the founding leader, Lee Kuan Yew, was: `there was no secret; we had no choice but to take a chance and sail into rough waters’. The Government’s development ideology has been growth-driven, purely pragmatic and adaptable to changing circumstances. As a result, a uniquely Singaporean system has emerged, which may not be easily emulated by other countries. On the one hand, Singapore is a tightly regulated, planned economy; on the other hand it stands out as a `beacon’ of the free market system. The pioneering economic architect of Singapore, Goh Keng Swee, described Singapore as `a socialist economy that works’. The present-day Singapore may be described as a `market-driven guided economy’. Singapore is not without its critics. The contention arises primarily with regard to the lack of political freedom and the uncompromising approach that the Government has adopted in handling political opponents and dissenting views. The racial riots, political turmoil and bloodshed that was witnessed in other newly independent countries such as India and Sri Lanka, and Singapore’s own turbulent beginnings, emphasized to the island’s leaders the importance of political stability for the achievement of economic progress. In the words of Goh Keng Swee: `The role of government is pivotal.
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