In this essay we look in-depth on how government strategies and economic policy play a crucial role in the success of High Performance Asian Economies (HPAEs) during 1960 to 1990 (World Bank 1993).There are eight countries within HPAEs: South Korea, Taiwan, Hong Kong, Singapore, Thailand, Malaysia, Indonesia and Japan. Its economic development has significantly rise that it was name ‘East Asia Miracle’ (World Bank, 1993).
Out of the eight country, Singapore, Hong Kong, Taiwan and South Korea were known as “Asia’s Four Little Dragon” along with Japan has modern it industry in rapid growth after World War II, (Ezra F, 1991).
To understand the success behind Asia’s Four Little Dragon, the government economic policies and strategies is debatable.
The role of a Government plays a crucial role in its nation economic market, ensuring macroeconomic stability and planning long term plan is the fundamental requirement for the nation growth. Macroeconomic sum up the nation income, output performance and global economies.
Using Singapore to debate has an interesting point of view. After it separation from Malaysia at 9 of August 1965. The nation became an independent state. Singapore was on her own, a tiny island lack of natural resource such as oil and rubber plantation, and on the other hand Singapore own a strategic harbour location.
How did Singapore government make fully use of it? How did a third world country become to the Singapore we known today? It economic growth was recognized as a miracle and was an economic role model in Asia.
We will find out how Singapore manage to raises it economic development in such rapid growth aftermath of war and separation.
Economic Crisis in 1960s
During 1960s Singapore population has 1.5 million, it’s consider minor domestic market and faces critical issues of poverty and high unemployment rate of 14%. The nation GDP (Gross Domestic Product) per captia was below US$320.
Singapore Second Deputy Prime Minister Goh Keng Swee was known as The Chief Architect of Economic Policies work along First Prime Minister Lee Kuan Yew. They consulted Dr. Albert Winsemius a Dutch economist that formulate a 10 year economic development strategy plan. (Leipziger, Danny, 1997)
The 10 years plan was to make Singapore into an entrepôt trade pot in the heart of industrialization and manufacturing. (Leipziger, Danny, 1997) With foreign corporation invest on Singapore as manufacturing plants build it will create more job vacancies for the local and solving the unemployment rate.
The Government established Economic Development Board (EDB) during 1961, its key focus is to encourage huge corporation and attract foreign investor to set up manufacturing plants in Singapore. The government approve EDB to grant 5 years tax relief that allows prime foreign corporations in Singapore to set up manufacturing plant. Thru this act increasingly of foreign investors calculated production fee lowered and...