Figure 1. Singapore, 1989

The world's busiest port, the modern nation of the Republic of Singapore, was founded as a British trading post on the Strait of Malacca in 1819. Singapore's location on the major sea route between India and China, its excellent harbor, and the free trade status conferred on it by its visionary founder, Sir Thomas Stamford Raffles, made the port an overnight success. By 1990 the multiethnic population attracted to the island had grown from a few thousand to 2.6 million Singaporeans, frequently referred to by Prime Minister Lee Kuan Yew as his nation's greatest resource. If Raffles had set the tone for the island's early success, Lee had safeguarded the founder's vision through the first quarter-century of Singapore's existence as an independent nation, providing the leadership that turned it into a global city that offered trading and financial services to the region and to the world.

Modern Singapore would be scarcely recognizable to Raffles, who established his trading center on an island covered with tropical forests and ringed with mangrove swamps. Towering skyscrapers replace the colonial town he designed, and modern expressways cover the tracks of bullock carts that once led from the harbor to the commercial district and the countryside beyond. Hills have been leveled, swamps filled, and the island itself expanded in size through extensive land reclamation projects (see fig. 1). Offshore islands are used for recreation parks, oil refineries, and military training bases. Despite the scarcity of land for real estate, the government has worked to maintain and expand the island's parks, gardens, and other green spaces. By housing 88 percent of its population in mostly multistoried public housing, Singapore has kept a rein on suburban sprawl. In Raffles's town plan, separate areas were set aside for the various ethnic groups of the time: Malays, Chinese, Arabs, Bugis, and Europeans. Government resettlement programs begun in the 1960s broke up the former ethnic enclaves by requiring that the public housing projects--called housing estates--that replaced them reflect the ethnic composition of the country as a whole. As a result, modern Singapore's three main ethnic groups--Chinese, Malays, and Indians--live next door to each other and share the same housing development facilities, shops, and transportation.

Despite efforts to maintain an ethnic balance in housing, however, the stated goal of the nation's leaders is not that Singapore become a mini-melting pot, but, rather, a multiethnic society. Of the country's 2.6 million inhabitants, about 76 percent are Chinese, 15 percent Malay, 6.5 percent Indian, and 2.5 percent other. There are, however, mixtures within this mixture. The designation Chinese lumps together speakers of more than five mutually unintelligible dialects; Singaporean Malays trace their forebears to all of the major islands of the Indonesian archipelago, as well as to the Malay Peninsula; and the ancestral homes of Indians include what are the modern states of India, Pakistan, Bangladesh, and Sri Lanka. Out of this diversity, the government leadership has attempted to establish a what is calls "Singaporean identity," which would include certain unifying and modernizing elements but yet retain essential variations, based on Asian culture and values. One of the unifying factors is the English language, selected as the medium for educational instruction both because of its neutrality in the eyes of the three dominant ethnic groups and because of its position as the international language of business, science, and technology. In order not to lose touch with their Asian heritage, however, Singaporean school children are also required to study an appropriate "mother tongue," designated by the government as either Malay, Tamil, or Mandarin Chinese--a vast oversimplification of the polyglot of Singaporean native languages.

Singaporean identity, as envisioned by the country's leadership, calls for rugged individualism with an emphasis on excellence; the government constantly exhorts its citizens to be the best they can be. Education, home ownership, and upward mobility are all considered appropriate goals. Although Singaporeans are expected to be modern in their outlook, they also are encouraged to retain a core of traditional Asian values and culture. In a society in which all share a common education system, public housing, recreation facilities, and military training, the government considers it important to highlight the uniqueness of the three official ethnic groups--Chinese, Malays, and Indians-- through the setting aside of national ethnic holidays and the sponsorship of ethnic festivals. Singaporean ethnic differences are usually maintained, however, not so much by these somewhat self-conscious displays of ethnicity but rather by membership in ethnically exclusive associations. Usually religious, charitable, or business in nature, many of these associations had their origins in colonial Singapore and represent finer distinctions of ethnicity than those supported by the government. Chinese trade associations, for example, are usually restricted to speakers of a particular dialect. Hindu temples are sometimes associated with worshipers who trace their heritage to a particular region of India.

Singapore is multireligious as well as multiethnic. Major religious preferences reported in 1988 were Buddhism (28 percent), Christian (19 percent), no religion (17 percent), Islam (16 percent), Daoist (13 percent), and Hindu (5 percent). Singapore's nineteenth-century immigrants valued the social as well as religious aspects of their congregations, and their descendants are more likely to concern themselves with social activities centered around their temples and mosques than with elaborate ritual or ceremony. The government, although secular, views religion as a positive force for instilling moral values in the society. At the same time, it keeps a watchful eye out for social or political activism within religious groups. Muslim fundamentalists and over-zealous Christian proselytizers alike are kept under careful scrutiny, lest they upset the religious and ethnic harmony of the country.

Singapore closely resembles developed countries in terms of its low birth rates, high life expectancy (73.8 years at birth), and major causes of death--heart disease, cancer, and stroke. Although in the early years of independence the government mounted campaigns to lower the country's high birth rate, it became concerned in the 1980s when the rate dropped below the replacement level. Campaigns and incentives were instituted to encourage those who could afford it to have more than two children. College-educated women were especially encouraged by exhortations and incentives to marry and have children.

In terms of public health, Singapore also closely resembles developed countries. Although some observers criticize the country's modern, sanitized environment and mourn the loss of the old port's charm, they probably either have forgotten or never knew the open sewers, tuberculosis sanatoriums, and opium dens of colonial Singapore. Whereas the manufacture and sale of opium continued to be a major source of revenue for the colonial government up until World War II, the government effectively combats drug use in modern Singapore through antidrug campaigns, rehabilitation centers, and a mandatory death penalty for trafficking. The government heavily subsidizes services in order to make them affordable to all and sets aside 6 percent of the monthly income of each worker into a personal Medisave account, which can be used to pay hospitalization costs for any family member. The Medisave account is part of the Central Provident Fund, which is Singapore's compulsory national social security savings plan. Contribution rates due to be phased in in the early 1990s mandate a contribution of 40 percent of the gross wages of employees under fifty-five, with employee and employer sharing the burden equally. Singaporeans can use these funds to invest in approved securities, to purchase homes in government housing projects, or to pay for hospitalization and retirement. By 1990 some 88 percent of Singaporeans lived in Housing and Development Board apartments, a vast public housing and urban redevelopment project initiated in the early postwar years. Under the program, which began in earnest after independence, Singapore's slums and ethnic neighborhoods gradually were replaced with modern housing estates, self-contained units providing shopping, restaurant, and recreation facilities as well as apartments of various sizes, scattered outward from the old central city. A network of superhighways and a state-of-the-art mass rapid transit system connect Singapore's housing estates with commercial and industrial areas.

Although Singapore's founder and other nineteenth-century residents would no longer recognize the island, they would at least be able to identify with certain aspects of its modern economy. The principle of free trade laid down by Raffles was still largely in effect in the late 1980s, with only a few revenue tariffs levied on such things as tobacco and liquor. Trade continued to be the island's lifeblood; in 1988 the value of Singapore's international trade was triple the total of its gross domestic product (GDP). Although some aspects of the trade have changed, others remained the same. The island's initial success resulted from its role as a conveniently located and duty-free entrepôt for the three-way trade among China, India, and various parts of the Malay Archipelago. This trade was an ancient commerce, and trading posts probably had flourished intermittently at that favored location for two millenia. In early colonial times, silks from China, manufactures from Europe, incense from India, and spices from the Moluccas all were shipped on the various seasonal trade winds to Singapore, where they were bought, sold, traded, or stored for a future customer. By the late nineteenth century, however, the British overlords of Singapore had extended their influence or control throughout the Malay Peninsula, and the port acquired a large hinterland rich in resources. Singapore became the outlet for Malaya's tin and rubber, as well as the gateway through which were funneled supplies and workers for the peninsula's mines and plantations. Tin smelting and rubber processing were added to the list of services that Singapore provided--a long list that already included wholesaling, ship repair and provisioning, warehousing, and a host of banking and financial services.

In 1990 the economy of modern Singapore was still based on the same services that were performed by the colonial port, although most of these services had been greatly expanded or modified and new ones added. The major sectors of the economy were the regional entrepôt trade, export-oriented manufacturing, petroleum refining and shipping, production of goods and services for the domestic economy, and a vastly expanded services industry.

When independence was suddenly thrust upon Singapore in 1965, its economic prospects looked bleak, if not precarious. In the aftermath of World War II, Singapore had faced staggering problems of high unemployment, slow economic growth, inadequate housing, decaying infrastructure, and labor and social unrest. Separation from Malaysia meant the loss of its economic hinterland, and Indonesia's policy of military Confrontation directed at Singapore and Malaysia had dried up the entrepôt trade from that direction. Moreover, with the announcement in 1968 of Britain's departure from the island's bases, Singapore faced the loss of 20 percent of its jobs. These problems led Singapore's leadership to take a strong role in guiding the nation's economy. The government aggressively promoted export-oriented, labor-intensive industrialization through a program of incentives designed to attract foreign investment. By 1972 one-quarter of Singapore's manufacturing firms were either foreign-owned or joint-venture companies, with the United States and Japan both major investors. The response of foreign investors to Singapore's favorable investment climate and the rapid expansion of the world economy at that time were factors in the annual double-digit growth of the country's GDP during most of the period from 1965 through 1973. By the late 1970s, however, government planners had adopted a policy of replacing Singapore's labor-intensive manufacturing with skill- and technology-intensive, high value-added industries. Information technology was particularly targeted for expansion, and by 1989 Singapore was the world's largest producer of disk drives and disk drive parts. In that year, earnings from manufacturing accounted for 30 percent of the country's GDP.

Although Singapore lost its former hinterland when it separated from Malaysia, its northern neighbor remained the leading source of primary imports and a major destination for Singapore's manufactured exports. Malaysia was Singapore's third largest overall trading partner in 1988, and Singaporean companies were major investors in Malaysia's southern state of Johor. The entrepôt trade with Indonesia had long since revived following the end of Confrontation in 1966. By the late 1980s, Singapore was the world's third largest petroleum-refining center as well as third largest oil-trading center, serving the needs of oil-rich Indonesia and Malaysia. By 1988 Singapore had nosed out Rotterdam as the world's busiest port in terms of tonnage. Some 700 shiplines used its modern facilities each year, including Singapore's own merchant fleet, which ranked fifteenth worldwide. Four major shipyards employed about 70,000 workers, about 40 percent of whom were from neighboring Asian countries.

One of the fastest growing sectors of the economy was Singapore's international banking and financial services sector, which accounted for nearly 25 percent of the country's GDP in the late 1980s. Historically, Singapore served as the financial services center for Southeast Asia, and in the late 1980s it ranked with Hong Kong as the two most important Asian financial centers after Tokyo. The government provided incentives for the continuing diversification and automation of financial services, and Singapore's political stability and top-notch infrastructure were important attractions for international bankers and investors. Trade, manufacturing, and international financial services were closely linked in Singapore, which in 1990 hosted more than 650 multinational companies and several thousand international financial institutions and trading firms. Singapore's reliance on the international economy, over which it had little control, provided incentive for the government to play a strong role in regulating domestic conditions. Soon after independence, the government brought under control the serious labor unrest of the 1950s and early 1960s in order to present a more favorable climate for foreign investment. Discipline imposed on the labor force was counterbalanced, however, by provisions for workers' welfare. While the booming economy of the late 1960s and 1970s brought new jobs to the private sector, government provision of subsidized housing, education, health services, and public transportation created jobs in the public sector. The Central Provident Fund, built up by compulsory contributions by both employer and employee, provided the necessary capital for government projects as well as for the country's comprehensive social security scheme.

Singapore, Inc., as some observers refer to the country, spent the first twenty-five years of its independence under the same management. Led by Lee Kuan Yew, the country's first and only prime minister, the People's Action Party ( PAP--see Glossary) won all or nearly all of the seats in parliament in the six elections held between 1959 and 1988. Based on a British parliamentary system, with free and open elections, the Singapore government was recognized for its stability, honesty, and effectiveness. Critics complained, however, that the government's authoritarian leadership reserved for itself all power of decision making and blocked the rise of an effective opposition. A small nucleus of leaders centered around Lee had indeed closely guided the country from its turbulent preindependence days and crafted the policies that led to Singapore's economic development. During the 1980s, however, a second generation of leaders was carefully groomed to take over, and in early 1990, only Lee remained of the first generation leaders.

In late 1989, Lee announced that he would step down in late 1990 and that his successor, First Deputy Prime Minister Goh Chok Tong, had already largely taken over the day-to-day management of the government. However, based on the prime minister's own assertions that he was not yet ready to relinquish all control, observers speculated on just what powers Lee would continue to hold. Goh acknowledged in late 1989 the growing sophistication and rising expectations of younger Singaporeans, who want a greater participation in the country's political life, and noted that he expected the opposition to claim a larger share of seats in parliament in the 1990s. In contrasting his leadership style with that of Lee, Goh stated that Lee "believes in firm government from the center . . . whereas our style is a little more consultative, more consensus-building." Behind Goh in the Singapore leadership queue was believed to be Lee Kuan Yew's son, Brigadier General Lee Hsien Loong, who served in the cabinet as minister for trade and industry and second minister for defence. His meteoric rise in the late 1980s through the ranks of bureaucratic and political responsibility was regarded with interest by both foreign and domestic observers.

The transition to a new generation of leaders was a phenomenon not unique to Singapore. In neighboring Malaysia and Indonesia, the independence generation was also rapidly dwindling, and the 1990s will surely mark the passing from the scene of Prime Minister Mahathir Mohamad and President Soeharto as well as Lee Kuan Yew. The close relationship between Singapore and both its neighbors had been built to a large extent on personal ties between Lee and his counterparts in Malaysia and Indonesia. Nonetheless, the new leadership of these countries will very likely continue to build on the foundation laid by their predecessors.

In late 1989, Goh discussed the prospect of Johor State, the nearby Indonesian island of Batam (currently being developed), and Singapore forming a "triangle of growth" within the region in a cooperative rather than competitive effort. There were also signs of increased military cooperation among the three countries. Singapore, for example, conducted bilateral land exercises for the first time with both Malaysia and Indonesia in 1989. Bilateral air and naval exercises had been conducted with both countries during most of the 1980s. All three countries (along with Thailand, Brunei, and the Philippines) were members of the Association of Southeast Asian Nations ( ASEAN--see Glossary), formed in 1967 to promote closer political and economic cooperation within the region. The invasion of Cambodia by Vietnam in 1978 brought increased unity to the organization throughout the 1980s, as it sought to find a peaceful solution to the Cambodian problem. Although there was considerable bilateral military cooperation among ASEAN states, the organization was not viewed by its members as a military alliance. However, Singapore and Malaysia, along with Britain, Australia, and New Zealand, were also members of the 1971 Five-Powers Defence Agreement, which provided for consultation and support by the latter three nations in the event of an attack on Singapore or Malaysia. Cooperation under the agreement diminished during the 1970s, but by the late 1980s extensive military exercises involving all five participants were again being held.

In August 1989, Lee Kuan Yew created a stir within the region by stating that Singapore was "prepared to host some United States facilities to make it easier for the Philippines to host the United States bases there." Malaysia reacted negatively to the announcement, and other ASEAN countries expressed some dismay. In October, however, the Singapore foreign ministry clarified the issue by stating that an increased use of Singapore's maintenance and repair facilities by United States ships had been agreed on by the two countries, as had short-term visits by United States aircraft to Singapore's Paya Lebar Air Base. The agreement followed a period of somewhat strained relations between the two nations, during which the United States had been critical of Singapore's use of its Internal Security Act to detain dissidents indefinitely, and Singapore had accused Washington of meddling in its internal affairs. The United States, however, was Singapore's largest trading partner and foreign investor, and the relationship was one that neither country was eager to upset.

By the last decade of the twentieth century, the former colonial port of Singapore had become a global financial, trading, and industrial center that continued to live by its wits in the world of international trade, just as it had done in the nineteenth century. Singapore's leadership and its people have always managed to adapt to the changing demands of the world economy, on which so much of their livelihood depended. In the coming decade, however, a new generation of leaders will take full control of the nation's government and economy. Before them lies the task of reconciling the need to steer a steady course in the nation's continuing development with the people's growing aspirations for an increased share in political and economic decision making.

March 17, 1990
Barbara Leitch LePoer

Data as of December 1989