Singapore's economic development history is quite interesting and shows the country's progressive development over the years. The economy of Singapore grew at a rapid pace between periods of heavy government intervention (the 1960s) and the periods of economic liberalization initiated by the mid-1990s. In recent years, Singapore has experienced an economic boom. Singapore's economic growth history can be categorized into five periods:
A high degree of economic liberalization initiated in the early 1950s was one of the driving forces behind Singapore's rapid economic growth. A rapid growth in knowledge-based industries such as technology and electronics initiated a flurry of investment in education and research, which led to a sharp increase in education levels and a flood of new educational institutions and universities. As a consequence, Singapore became a well-equipped research hub for the world, with its well-trained scientific workforce and an increasing number of specialists from developed countries coming to work in the country.
The introduction of a free economy into the global market started to pull the economy of Singapore up out of its slow period. The opening up and liberalization of the economy boosted competition and set the wheels in motion for economic reform and reforms across the country. These included the removal of price and exchange controls on imported goods, liberalizing the foreign currency trade, liberalizing the internal passport policy, liberalizing the licensing procedures for businesses, and liberalizing the restrictive copyright laws. All these allowed the country to open up its economy to international trade, and the result was a boom in exports and imports that made Singapore a main exporter of goods internationally.
From the 1950s Singapore experienced economic growth that has been tempered by the global recession. However, the global recession did not affect the competitiveness of the country's domestic economy, as cheap labor and a favorable exchange rate made the country a major exporter of labor and raw material. Over time, Singapore gradually returned to its earlier growth rates, and today is one of the fastest-growing developed countries in the world.
The key to Singapore's economic miracle has been its open and free economy. The government has pursued an aggressive policy of foreign direct investment (FDI) to boost the economy. Besides promoting trade and facilitating access to cheap labor, the government has also eased restrictions on the transfer of labor and other services to and from abroad. Free and easy access to labor are one of the main reasons why the population continues to grow at such high rates, while the birthrate remains low.
Singapore is also a major exporter of crude oil and natural gas, contributing largely to its economy. A major part of its exports is sent to China, the US, Japan, and several European countries. Some of the petroleum products that Singapore receives are gasoline and diesel, and also textiles. Because Singapore is located in the Malayasia region, its exports to Asian countries are primarily based on the cost of transportation. . . . . . . The low cost of transportation means that goods and services here can be very competitive.
As a nation, Singapore has always had the reputation of being a city-state with great commerce. And it is true that the country is home to some of the world's most valuable possessions – the likes of the Sentosa Island and the Malayian mainland. But this does not mean that Singapore will necessarily only become another commercial center for other nations. The current economic growth history of Singapore clearly shows that despite the influx of large numbers of tourists, the nation is also a thriving island nation where people continue to live a comfortable and relatively normal lifestyle. Singapore's economy is based on innovation and resourcefulness, and even though the country has faced many challenges, it continues to strive forward.
While Singapore's economic growth history is one of the most impressive in the world, it is also saddled with several disadvantages that dampen the overall performance. One of these is the country's high dependency on imports from other countries. Another is the high level of taxes as well as the high level of government regulation. However, these problems seem to be gradually fading away as the nation continues to liberalize its economy and attract more foreign investments.