RISE OF RISE OF SINGAPORESINGAPOREFrom WWII ashes to a great PhoenixFrom WWII ashes to a great Phoenix

PO371PO371 SOUTHEAST ASIAN AFFAIRS SOUTHEAST ASIAN AFFAIRSNOV 22, 2012

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Group: 28Group: 28

Keynote Agenda• Politics• Reliance on human resource• Education• Healthcare service• Economic development• Sustain economic development• Provision of housing• Singapore foreign relations

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The

Politics

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Political Background

• Received independence in 1965• Democratic system – similar to United

Kingdom• Parliamentary republic, also know as unitary

multiparty parliamentary republic – 99 members of the parliament

• Executive power relies on Cabinet, President, and led by prime minister

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Political Background(2)

• 7 presidents(6 years a term)– Incumbent Tony Wan Keng Yam

• 3 prime ministers(5 years a term)– Lee Guan yew(1959-1990)– Goh Chok Tong(1990-2004)– Lee Hsien Loong(2004-present)

• People's Action Party has ruling for 50 years as a single-wining election

• 4 vulnerable opposition party

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From Third World to First World

• On foreign policy• On economic policy• On social policy• On education policy• Single-ruling administration

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Criticism on Lee Kuan yew regime

• Deceitful democracy• Single-party system• Repressive regime• A deficiency in Checks and Balances

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Reliance on

Human Resource

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Facing the future threats ofageing population

• Singapore population growth 1950 – 2000– Confident of a better tomorrow, people were

encouraged to carry on the Asian tradition of having large families.

• Problems – The resources available at that time were inadequate

to provide the large population with a reasonable standard of living.

– Unemployment, shortage of houses, inadequate healthcare and education services.

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Facing the future threats ofageing population (cont.)

• Policies to reduce population growth– 1966 Singapore Family Planning and Population Board

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• Sources: Poster on family planning, Family Planning / Sterilization information service, The National Health Education Department, Ministry of Health.

Facing the future threats ofageing population (cont.)

• Slow population growth

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Number of babies born in Singapore, 1960 – 2000Source: yearbook of statistics Singapore 2001, Singapore department of Statistics.

Average age at first marriage was 30.7 for grooms & 27.6 for bridesSource: The population in Singapore by Saw Swee Hock 1999, Institute of Southeast Asian Studies, and Department of Statistics.

Facing the future threats ofageing population (cont.)

• Problems of population growth • Shortage of man power fewer of young worker.• Poor development. • Policies to increase population growth (1987)• Promoting larger families to have more children's. • Attracting foreign talent. • Create more job and increase productivity.• More MNCs come to invest in Singapore.

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Singapore population size and growth, 1980 – 2000.Sources: yearbook of Statistics Singapore 2001, Singapore Department of Statistics.

* Average annual growth rate

Year Total population (million)

Resident population (million)

Total* population growth (%)

Resident population (%)

1980 2.41 2.28 1.5 1.3

1990 3.05 2.74 2.4 1.8

2000 4.02 3.26 2.8 1.8

Singapore’s ageing population • Quick fact

– In 2000, only one in 14 Singaporeans was aged 65 and above. By 2030, one in five will be aged 65 and above.

– By 2030, these Singaporeans will be among those aged 65 years and above.

– The proportion of young people is shrinking in 1970, this resulted in a relative increase in the proportion of senior citizens.

– Singaporeans are living longer than before. • Why the population is ageing?

– Good healthcare and service and protection for its people. – High standard of living.

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Singapore’s ageing population (cont.)

• Impact of an ageing population– Demand for healthcare and social services more

community based services. – Strain on working people.– According to the Prime Minister Goh Chok Tong: “It would

be a disaster if companies and young workers have to be taxed heavily to support the large number of senior citizens in Singapore.”

• Preparing for an ageing population – Many helping hands approach.– Individual responsibility.– Family care.– Community help.– Government support.

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The

Education

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Education in Singapore

• Human resource as the most important resource

• Value education as development of the resource

• Challenge for 1960s to 1970s – availability of infrastructure / fostering social cohesion

• Problem of language barrier – mother tongue• Solution? Transition to English as medium of

instruction

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Education in Singapore (2)

• Common Examination (PSLE) – centralization of syllabus first

• 1960 “Integrated school” – different races in the same school

• Promote interaction• Secretly, what is the true intention of the

government???? Let’s get Realist

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Education in Singapore (3)

• See the movement here……in 1966, bilingualism was compulsory

• Reduced role of Mother tongue languages• Positively – development without forgetting its

root• Singapore “Asian value” – obedience• Exhibited in “Caning” • Syllabus to suit the country’s demand – use as

people as tools?

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Education in Singapore (4)

• School dropout problems – ‘wastage’• Adjusting to the learning needs – 1980

Streaming in primary 4• Hierarchy even in education?• Seen to be premature/ limit capabilities’

development• Useful and Useless students Questions

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Education in Singapore (5)

• 1993: change the streaming to be conducted at secondary 1

• Cultivating nationalism – preventing emigration

• Community Involvement Program (CIP) – social responsibility

• Stress! Stress! Stress!• Do you want to study there????

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Education in Singapore (6)

• Improvements• Integrated Program (IP) – can move on to sit

for GCE ‘A’ level without taking ‘O’ level before began in 2004, now considered under experimental stage’

• Quality Assurance Framework, especially towards independent schools

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HealthcareService

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Health care service

• Initial stage – 1960s “Keep Singapore Clean” campaign

• Instability of autonomy under the British• 1970s – specialization – replacing traditional

dispensaries• Say “No” to being Welfare state• “Horror” of British welfare state – “Why

Work attitude” and “National Burden”

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Health care service• The government will help, but not entirely provide

medical care.

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• Three schemes Medisave (compulsory) - 6-8% from salary = forced saving

Medishield (voluntary) - insurance plan

• Can secure votes without taking away people’s incentive to work

Economic Development

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Quest for development strategy• Geographical factor: located on international marine time trade (Malacca

strait) give the competitive advantage for logistic of goods and services. • Poor fundamental factors in term of

– small land resource and too low quantity of resource mean• limitation of development for agriculture sector and heavy industry sector.

– small number of population = limited domestic market (small market). • Policy for export-oriented (for economic of scale) and investment incentive:

– Government subscribed to policies which promote:• macroeconomic stability (sound fiscal, low inflation rate, positive real

interest rate)• low intervention in price of goods and service (liberalized foreign trade

policies and exchange rate policy which avoid adjustment for irrational value that would easily cause damage).

– Another essential element for increasing investment incentive included educated human capital (high capacity human resource) and tax incentive policies.

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Tax Policy• Surplus budget (except 1986, 1987 and 2009) and High RPE (relative political extraction)• Ratio of total tax revenue to total revenue continue to decline from 72% (1960) to 58%

(2011)• CPF (Central Provident Fund) saving & reduce of social security spending.

Deficit (-) or Surplus(million S$)

Total Government Expenditure(million S$)

Total Government Revenue(million S$)

Total Tax Revenue(million S$)

Total TaxRevenue / Total Revenue %

1960 67.90 243.40 311.30 224.30 72.051970 199.20 1019.90 1219.10 857.10 70.311980 320.70 5170.70 5491.40 4087.00 74.431990 3167.60 13257.10 16424.70 10354.00 63.042001 7442.70 51065.40 43622.70 25108.90 57.562008 24100.10 89434.40 65334.30 37518.60 57.432009 -4357.60 47094.20 51451.80 35272.40 68.552010 15433.60 79522.20 64088.60 40662.20 63.452011 26624.80 105705.60 79080.80 46171.80 58.39

Source: Singapore Year Book of Statistic, Singapore Department of Statistics

The Selective Economic Indicator of Government Sector: Singapore 1960, 1970, 1980, 1990, 2001, 2008-2011

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Tax Policy (con.)• Tax reform and tax incentive program

– lower the rate for corporate tax & Customs/excise• Changes in revenue from total tax revenue

– Lower customs / excise: 45% (1960) to 4% (2011)– Higher income tax (but stagnant): 33% (1960) to 45% (2011)– Rapidly Higher GST (Goods & Service Tax) or VAT: 0% (1960) to 18% (2011)

Source: Singapore Year Book of Statistic, Singapore Department of Statistics

IncomeTax

AssetTaxes

Motor VehicleTaxes

Customs/excise

StampDuties

Otherduties GST Betting Tax

1960 33.90 4.30 2.90 45.90 1.60 11.30 - -

1970 29.30 13.70 7.00 33.30 2.70 14.00 - -

1980 46.40 13.60 11.90 16.40 4.00 7.60 - -

1990 47.40 10.70 12.90 12.60 6.30 11.70 - -

2001 53.62 6.75 9.85 7.33 3.33 4.84 8.02 6.27

2008 49.47 7.71 5.34 5.55 4.90 4.63 17.68 4.74

2009 47.87 5.68 5.07 5.90 5.64 6.15 18.80 4.89

2010 44.95 6.39 4.65 5.14 7.62 7.10 18.93 5.21

2011 45.43 8.26 4.05 4.56 7.06 6.26 19.31 5.07

The percentage of taxes in total tax: Singapore 1960, 1970, 1980, 1990, 2001, 2008-2011

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Tax Policy (con.2)

• Tax option for government as GST allow government to gain more revenue from tax and also able to avoid the side effect of taxation toward private sector investment, purchase of technology and export oriented industry.

• Thus, consumption for investment in productive capacity of producer side would be except from GST. By having GST also widen the taxation payer’s base and avoid the potentials of tax escaping.

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Fiscal Policy• There’re 2 types of macro-economic policy:

– Short run policy as stabilization tool (to respond toward aberration from desire rate of growth)

• Limited role due to real balance effect– large amount of wealth was stagnated in CPF (Central Provident Fund) =

government spending owned narrow scope of effect.– Increasing bond & surplus budgetary = shortage of money supply

• Effective role in area of stable currency– Large amount of foreign reserve

– Long run policy as economic growth stimulus tool (to stimulus the growth of output)

• ‘Saving aspect’: Fiscal policy has been focus on building domestic revenue while restrict expenditure.

• Spending on capital project: focus on future return of capital gains and revenue from investment.

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Sustain

Economic Development

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in 21st cen.

8 Economics strategies1. Diversify the economy.2. Shifting from technology base towards a knowledge

based economy.3. Promoting manufacturing and service as dual engines

of growth.4. Building an IT infrastructure.5. Moving toward regional and global.6. Developing local talents: entrepreneurship and

technopreneurship.7. Promoting research and development (R&D)8. Attracting foreign talents

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Provision of

Housing

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Housing Program and role of state

• Housing is considered as the basic need for people. Proper housing for population can also be considered as essential element in the role of state.

• It’s government that functions as land allocator for proper use of land for citizen welfare and efficiency allocation.

• Public housing program would be an important tool to maintain the social harmony and stability of country.

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Destitute physical condition of Singapore Island

• Population: 5.3 million people• Area of 697 sq. km (with land of 687 sq. km). • Population density: 7792.56 persons per

square km.• With this high of population density, land

resource becomes rare.

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HDB and Public housing program

• After PAP (People’s Action Party) won the election of 1959 with campaign on new public housing policy.

• The Housing & Development Board (HDB) was found in 1960.

• HDB is the government body that takes care of housing and improving the living conditions for the population.

• High-rise flats: enable most efficient use of land.• "new town“: composes of most separate facilities that

can provide you from education to job (industrial estates).

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Home ownership and financial security

• Home ownership as a must for economic development: ownership of house becomes essential factor for each individual financial security.

• From rental purpose only toward Home Ownership Scheme: allowed and encouraged Singaporean citizen to gain their ownership of their HDB flat unit by giving the incentive for poor citizen with discount price (from CPF and government subsidies).

• Nowadays, the successful of HDB was highlighted by the highest-ownership at 92%. (WDR 2009)

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Singapore

Foreign Policy

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Singapore Foreign Policy• Diplomatic relations with 175 countries• Member of United Nation(117th), the Common

Wealth(22nd) Non-aligned movement, ASEAN, WTO, APEC, etc.

• International cooperation with countries in several sorts of relation in shapes and forms such as military, trade, and etc.

• Most importantly, ensuring that its actions do not exacerbate its neighbors' insecurities.

• Aim at maintaining friendly relations with all countries

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Foreign Relations on individual state and international organizations

• Toward UN• Toward neighboring countries

– Indonesia– Malaysia– others

• Toward China• Toward United States

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The role of Singapore on ASEAN

• A co-founder of ASEAN in 1967• has played an active and constructive roles in

ways, shapes, and forms such as supporting of ASEAN free trade agreement, solving the conflict by peaceful settlement, and so forth

• Former prime minister Goh Chok Tong proposed the idea of founding of ASEAN economic community(AEC) in 2007

• Is the strongest supporter of AEC formation.

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There is no law of nature which provides that life will

get better for Singapore next year. We have to work

to make it better.

‘’PM Lee Kuan Yew

May Day Message, 1986

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Q & A46

RISE OF RISE OF SINGAPORESINGAPOREFrom WWII ashes to a great PhoenixFrom WWII ashes to a great Phoenix

PO371PO371 SOUTHEAST ASIAN AFFAIRS SOUTHEAST ASIAN AFFAIRSNOV 15, 2012

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