week 5: developmental state and

economic policies

1. economic transformation
2. physical landscape and tabula rasa approach

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1. economic transformation
-economic sectors
entrepot
↓
export manufacturing (EOI),
transport+communications,
financial+business services

•British gov develop Sg as an entrepot economy

•After SG independence, still part of the game plan due to the strategic location
•Sg develop its maritime transport
•Most of the goods in the world transported through shipping
•Airport  boost tourism
•Communication  Telecomm
•Developing sg as a hub of financial and business services (1980s)

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source: W.G. Huff 1994: 303

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source: W.G. Huff 1994: 323
Types of manufacturing

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mainly: Indonesia, Malaysia, Thailand;
Middle East
cf “Houston of the East”

SG don’t produce but service the primary

producer countries
Sg play an important role for being port of
transit
Sg important in refine petroleum (import
crude oil  refine to different types of
product)

source: W.G. Huff 1994: 310

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-pro-foreign entry + state-centred
“… we imported entrepreneurs in the form of multinational corporations and the government
itself became an entrepreneur in a big way…” - Goh Keng Swee, 1989.
i. “foreign investment driven”
incentives: tax holidays + reductions, 100% foreign ownership; cf other postcolonial regimes
government facilitation
Economic and Development Board EDB (1961): “one-stop shop” for MNCs
Jurong Town Corporation JTC, Development Bank of Singapore DBS (1968)
SG gov encourage foreign direct invest
Government (rely heavily esp manufacturing) & the gov very much at the centre engaging capitalist
Gov provide incentives (tax holiday)  eg develop company in SG 5 years no tax if this is the sector they wanna develop
might even extend the tax holidays
SG Allow 100% foreign ownership (very attractive esp in post recolonize world) as long as they bring in money  other
country may request for local participation
Most country need visit Ministry of Finance, then go other department etc but EDB shorten the time for the foreign investor
(other country may need 3 months for paper work but EDB just may need 1 month)
EDB set up 2 bodies  JTC & DBS DBS was previously set up to help the foreign investor to assist them, not being a private
bank in the beginning

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source: W.G. Huff 1994: 415

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 ii. public (government) enterprises, GLCs
Port of Singapore Authority (1964)
shipyards: Keppel (1968), Jurong (1963), Sembawang (1968)
also: SIA (1972), Neptune Orient Lines (1968), Intraco (1968), TAS (1974) later Singtel
defence-related companies (since 1967), later ST Holdings
funding sources
a. personal savings = <10% (1964), ~40% (1983); esp CPF, POSB
b. public sector savings = surpluses from national budget + statutory boards
esp – HDB, JTC, PUB, PSA, URA, Sentosa (7 key stator board that earns a lot of $ for SG)
• Personal saving (including CPF)  gov don’t really have to borrow $ from foreign
bank just borrow from their own citizen
• In the pivotal year, POSB is a very key source of fund (to provide infrastructure) cuz
the interest is lower (set by gov itself)
• Gov rely funds from public sector savings (when gov set a certain budget but got
extra, the extra will go to help fund gov project)
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source: W.G. Huff 1994: 333

CPF contributes no less than 20% of GNS over the years

Corporate and personal savings decline over the years

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Temasek Holdings (1974), managed as private companies
by 1981, Government of Singapore Investment Corporation GIC; OFDI (Overseas Foreign Direct
Invesment), “external wing”
by 1990, ~70 statutory boards, >1,000 state-owned companies
capitalist, heavy state intervention; “developmental state”
clearing spaces
cf British colonial era:
not “invisible hand” but “long arm” of the state;
not free market but “state dependent capitalism” – Linda Lim 1983

• No country in the world will see so many state involvement

• Last time british  free market approach (invite ppl who want to do business they
just let them do)
• For Sg gov approach is more state dependent capitalisma
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2. physical landscape and tabula rasa approach
2i. 1950s, 1960s
-1955-1958 master plan – “black belt”, “green belt”
“black belt”: squatters, inner city suburbs, severe overcrowding
dilapidated buildings; poverty, despondency, diseases/epidemics
SIT  HDB (est. 1960)
postwar targets: slum clearance (Primary aim)
~100,000 slum dwellers; colonial loan £28M
1950s: Queenstown, Toa Payoh; also Woodlands, Bulim, Yio Chu Kang
Bukit Ho Swee (1961 fire)
• British in 1950s still have master plans to develop SG
• Black belt  Sg river area (overcrowding) if without proper space or sanitation  prone to disease
• British has limited budget esp after the WWll  so they target the more critical area
• 1920s  Sg improvement trust
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incipient industrialization
Jurong
Japanese planners, 1961-66
2,700 acres of factories, deep-water harbor, railway link
satellite town (250,000 people)

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2ii. 1971-1991
-1971 Concept Plan (for the next 20 years of SG)
Singapore “survival”: economic above others
Urban Renewal Unit, HDB (1964)  Urban Redevelopment Authority URA (1973)
Land Acquisition Act; in the name of patriotism, “public spirit”
“the success and failure of the nation [was] the responsibility of all”
“economic nationalism” at work
slum clearance  farm clearance
cf town/hinterland concept, recreated the whole island as an urban complex
total makeover: “displace, destroy, replace” (Fumihiko Maki 1964)

• URA buys up any land that they deem economic development possibilities of SG
 empower force purchase (Sporean got no choice but to sell it to the gov)
• Major city last time  near the SG river
• Town hinterland is abandoned
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i. HDB public housing
>500,000 units by 1984
new towns: Bedok (conceived, 1971), Clementi (1974), Yishun (1975), Tampines (1977)
1961-1984: 230,000 households “resettled”; close to 90% population

clearing farmland: ecologically rich, environmentally sustainable

cf Singapore was approaching food self-sufficiency
1964: pigs, poultry, eggs - 100% (supplied by SG); vegetable 50%, fish 30%
1982: pigs 95%, chickens 70%, ducks 70%, eggs 100%, vegetables 25%, fish 25%
2013: eggs 35%, vegetable 4.2%, fish 5.6%, pigs 0

•Around SG independence, Sg was actually approaching food self-sufficiency

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ii. “garden city” (1963, LKY)
a "certain subtle way" to convince investors that Singapore was an efficient and effective
place (The Straits Times Life Supplement: Aug 1st 1996:2)
“I thought that the best way to convince [visiting CEOs to invest in Singapore] was to
ensure that the roads from the airport to their hotel and to my office were neat and
spruce, lined with shrubs and trees. When they drive into the Istana domain, they
would see right into the heart of the city a green oasis, 90 acres of immaculate rolling
lawns and woodland. . . . Without a word being said, they would know that
Singaporeans were competent, disciplined, and reliable, a people who would learn
the skills they required soon enough. American manufacturing investments soon
overtook those of the British, Dutch and Japanese.” – Lee Kuan Yew. 2000. From
Third World to First
“First World City in the Third World region”
farming: pollution, dirty; “embarrassment” in national memory
Garden city  economic logic  convince investor as a efficient and effective place

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iii. themed natural environments
the Jurong Bird Park (1969), Sentosa (1970), Singapore Zoo (1973); “Merlion”
tourist $
Chinese and Japanese Garden complex (1973-75)
ecological losses, eg Kranji mangrove reserve and farmlands for Kranji Reservoir (1973);
also Pandan mangroves

the “gardener state”: constant weeding, endless bulldozing

Mangrove  prevent the seawater fm washing away the coasting area  also
important place for the fish to breed

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