Singapore Economic Conditions Analysis

1309 Words6 Pages
GES1010 ESSAY 2

Merissa Boh Tsue Jynn
A0143176H
Tutorial Group GO1

1244 Words

The transformation of Singapore’s economy after independence saw Singapore become less dependent on its neighbors, and at the same time, more affected by international economic conditions. Discuss.

Intro

Singapore, founded in 1819 as a trading post, attained initial economic success as an entrepôt because of the island’s strategic location, harbor, and free port status. Thriving on international trade, rubber and tin were the mainstays of Singapore’s economy, half of this demand came from Malaya and another half from Indonesia, her neighboring countries. Singapore’s economy was hence very much dependent on its neighbors, and fluctuated
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Having lost a hinterland, Singapore’s southern hinterland was also cut off from the Indonesia’s Confrontasi, which further undermined the nation’s role as an entrepôt trading post. Additionally, the British government’s withdrawal of troops from Singapore left thousands of workers unemployed, which was a main problem. The Singapore government saw that the only way to tackle this problem of unemployment was through “extensive growth in its manufacturing…show more content…
As one of Asia’s newly industrializing economies, Singapore had become a manufacturing center with one of the highest incomes in the region. International banking and financial services sector was one of the fastest growing sectors of Singapore’s economy as Singapore’s “political stability and top-notch infrastructure were important attractions for international bankers and investors”. Due to Singapore’s vibrant trade relationships with countries, coupled with the fact that it was actively attracting investors, her dependence on the international economic conditions grew and hence, declining foreign demand dealt as an inevitable blow to Singapore. For example, recession in 1985 saw the nation under a year of negative growth (-1.5 percent). Furthermore, “worldwide slumps in petroleum-related and marine-related sectors were reflected in reduced demand for Singapore’s goods and services”. These reveal that even though Singapore’s economy was developing, the transformation in the economy has caused her to be more vulnerable to international economic conditions as seen from the reduced demand and

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