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Singapore: a center for global trade and business.

ONCE REGARDED exclusively as an exotic port city, today's Singapore is also a bustling, hi-tech business center. Gleaming modern high rises juxtapose picturesque ancient temples, a sign of the cultural diversity that is Singapore's hallmark. This gentle, spotlessly clean city-state of 2.7 million people offers its visitors a taste of Asia's ancient culture, yet has one of the most technologically advanced and rapidly growing economies in the region.

In effect, this tiny island located on the southern tip of Malaysia boasts perhaps the greatest economic development story in the Asia-Pacific region. Singapore's strategic location led to its becoming an international trading hub for goods and cargo in Asia. Singapore's Ministry of Information and the Arts reports that in 1990, more than 45,000 vessels came into the country; in terms of shipping tonnage, Singapore is the world's busiest port, providing top quality shipping facilities and technology for refueling, repair and trade operations.

More than a hub, Singapore contributes significantly to the global economy and promises to set the standard in the region for manufacturing, telecommunications, oil refining and financial services. Since achieving independence from Britain in 1958, Singapore's government has developed programs for the modernization of the nation's infrastructure and actively encouraged outside investment to build up domestic industries. Many foreign companies, such as Exxon, Dupont, Hewlett Packard and Apple, are lured by the quality of Singapore's work force and its favorable economic and financial policies.

The symbiotic relationship between the government and private industry has been the key to Singapore's economic success; the government helps establish policies and plans to nurture and shape the growth of the nation's businesses. The fruits of this government-business partnership are tangible indeed: According to the Singapore Economic Development Centre Board, in 1990 the economy grew by 8.3 percent, followed by 8 percent growth in 1991. At the same time, exports totaled $95 billion, compared to $10 billion in imports in 1990. The government has even managed a budget surplus, even though there are no sales or capital gains taxes, and income tax rates are comparatively low.

In the 1990s, Singapore is seeking to establish itself as a strong economic power by advancing the nation's technology industries, which experienced phenomenal growth during the past decade. To accomplish this, the government created the National Science and Technology Board (NSTB) in 1991 to oversee and promote research and development in technology industries. The NSTB also directed the development of research institutes focusing on information technology, computer-integrated manufacturing, molecular and cell biology, and manufacturing and systems science.

Although the public sector will play a role in this drive to foster greater technological growth, private industries will assume the majority of new research and development activities in an attempt to transform Singapore into one of the world's most sophisticated technology centers.

Singapore is also planning to use its technological capabilities to become the world's first fully automated society. This vast and ambitious project, called "IT2000," aims to integrate technologies such as robotics, teleconferencing and artificial intelligence into a single informational network that will link the nation's schools, businesses, governmental agencies and homes. According to the Harvard Business Review, Singapore has already achieved a major step toward becoming an electronically linked island: In 1989, it became the first nation to achieve 100 percent application of integrated services digital network (ISDN), which allows many of the nation's businesses and governmental agencies to operate on network.

Singapore is also one of Asia's primary management and distribution points for financial services, including commercial banking, fund management and the financial futures market. In order to achieve this objective, Singapore is striving to deregulate its banking and financial services industries and has already raised the limits of foreign ownership in banks to entice overseas investment. Singapore's sophisticated communications and technology systems will facilitate the nation's drive toward a stronger financial services sector; already, financial services can be conducted with incredible speed and ease due to the nation's highly developed information technology systems.

The continual education and development of the nation's work force has been a chief component in Singapore's economic strategy. This emphasis on education and training has paid off handsomely; according to the Business Environmental Risk Service, Singapore's work force has been rated the best in the world for each of the last 10 years. Over the last three years, per capita income has grown between 15 percent and 18 percent to approximately $12,500. Indeed, Singapore's residents enjoy the second-highest standard of living in Asia, following only Japan.

Singapore's government has also created policies aimed at meeting the material needs of the nation's people; these policies are based on the view that secure, prosperous citizens will make better and more efficient workers. An example is the government's public housing policy. In 1960, the Housing and Development Board was created to provide low-cost public housing to the nation's citizens. The Ministry of Information and the Arts reports that 87 percent of the population now lives in these apartments, and 79 percent of the units are owned by the people themselves.

The Lion City Roars

The story of how Singapore got its name is told in an ancient legend: A 13th-century prince from Sumatra landed on the island during a rough storm. He then spotted a lion that he wrestled and finally defeated. Triumphant, the prince declared himself king and named the island Singa Pura, which is Sanskrit for "lion city".

Although Singapore's earliest history is shrouded in mystery, by the seventh century A.D., a Malay empire called Srivijaya had established a trading post in the area. With the opening of Asia to Western trade markets, Singapore became an important strategic location. In the early 19th century, the British, in search of a secure trading settlement on the Malay Peninsula, assigned the task to Sir Thomas Stamford Raffles, an employee of the British East india Co. In January 1819 Raffles landed on Singapore and founded a port that, by the end of the century, thrived as a commercial shipping port -- earning it the name "gateway to the East."

Singapore remained under British control until the Japanese lay siege to the city during World War II. After the war, Britain regained control of the island, but a new spirit of independence gripped the populace. Britain gradually reduced its hold on the nation and in 1948 allowed elections for the first time.

In the 1950s, several fledgling political parties formed and contended for preeminence. In 1958, the British finally agreed to let Singapore govern itself, so elections were set for the following year. The People's Action Party (PAP), which was founded and led by an Oxford-educated lawyer named Lee Kuan Yew, swept the nation's first general elections in 1959, establishing Lee as Singapore's first prime minister. Over the next 30 years the nation enjoyed rapid economic growth; by 1970, Singapore's gross national product tripled to more than $6 billion.

In late 1990, Lea Kuan Yew, Singapore's first and only prime minister since his election in 1959 and the primary figure behind the nation's transformation into a modern, hi-tech state, announced his retirement. Lee handed over the reins of power to his former first deputy, Goh Chok Tong. Goh's administration has thus been charged with the responsibility to transform Singapore from a regional into a global power. In light of the nation's considerable economic accomplishments, it seems highly likely that Singapore will make great progress toward these objectives throughout the 1990s.
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Title Annotation:Special Section; includes related article on Singapore's history
Publication:Risk Management
Date:Sep 1, 1992
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