Abstract
This paper is an economic study of industrial development and a case study of industrialization in Southeast Asia. The fundamental purpose is to explain the character of industrialization to study the specialities by studying the background and process of industrial development in Singapore.
Singapore Island, the smallest and newest independent country in Southeast Asia, has grown into the entrepot trade center in the area since the beginning of the 19th century, and this island has had the importance as a strategic and political center to govern the British colonies in Asia.
Although, after the World War II, Asian colonies achieved their independence, Singapore was still a “Crown State” in 1958. In 1963 it participated in the birth of Federation of Malaysia, and in 1965 it became a “New Independent Country” separated from Malaysia.
Since the 18th century, many Chinese and Indians have filled the gaps between the colonialists and the natives. These immigrants have become new rulers after European colonialists left. In Singapore they have also become political rulers.
In the past decade, the growing sentiments of economic nationalism experienced in the newly independent states of Southeast Asia have together with their economic development slowed down the growth of entrepot trade in Singapore. The stoppage of trade with Indonesia also adversely affected Singapore's entrepot trade.
Up to this time, manufacturing industry in Shingapore was secondary to tertiary industry. Singapore being a free port, manufacturing industries were unable to make goods better in quality and in price than imported ones.
The uncertainty of her future entrepot trade and the rapid increase in her labour population were contributing factors in Singapore's choice to develop by expanding her processing trade. It is interesting to note that this change was undertaken not to increase but to maintain her present standard of living.
The Government enacted the “Pioneer Industries Ordinance 1959” and decided to exempt industries from income tax. Under the First (1961-1964<1965) and Second (1966-1970) Development Plans, Singapore began to build industrial estates at nine places.
The structure of manufacturing industry in Singapore, before the industrialization policy started, had been characterized by concentration on the food, beverage, printing and ship-building industries. Almost all of them were on a small scale, many of them home industries except shipbuilding. The same premises served for processing, selling and family residence.
Some foreign enterprises have been located in this island and they included cigarette making and packing, oil refining and motor cycle assemblage plant…etc.
Total output of industries, however, was less than the output of rubber processing…processing grading, and packing until 1963. Singapore is the biggest collecting center for the rubber materials from Malaya and Indonesia, which are then re-exported to the world market.
Since 1961, 177 firms were granted pioneer status, of these 95 firms were in operation (as in 1965). The main industrial establishment among these firms is oil refining, which ac-counts for 55 percent of total output of pioneer firms, followed by food, metal and machinery groups.
The foreign companies and joing enterprises awarded pioneer certification numbered 69, amongst them 18 firms from Japan, 15 from Hong Kong, 13 from Taiwan, and 9 from U. Kingdom……
The development of pioneer industries was below the target set up by the Government, in particular the rate of operation was only 27 percent of the production capacity. Total out-put of pioneer industries is still unable to compensate for decrease in rubber processing (as in 1964).
