1965 To 1979
After gaining independence abruptly, Singapore sensed the need for immediate international recognition of its sovereignty. The Konfrontasi was ongoing and some UMNO factions strongly opposed the separation; Singapore faced the danger of being attacked by Indonesian military or forcibly reabsorbed into Malaysia on disadvantageous terms. With the support of the Malaysian, British and New Zealand governments, Singapore became a member of the United Nations on 21 September 1965, and the Commonwealth in October that year. A new foreign ministry was established and was headed by Sinnathamby Rajaratnam who helped to assert Singapore's independence and established diplomatic relations with other countries. The participation in international organizations also helped to boost trade through cooperation. Singapore later co-founded the ASEAN on 8 August 1967, joined the Non-Aligned Movement in 1970, and later the World Trade Organization.
As a tiny island, Singapore was seen as a nonviable nation state, much of the international media was skeptical of prospects for Singapore's survival. Besides the issue of sovereignty, the pressing problems were unemployment, housing, education, lack of natural resources and lack of land.
The unemployment rate ranged between 10–12% and it threatened to create civil unrest. The loss of the access to the Malaysian hinterland market and the lack of natural resources meant that Singapore had no solid traditional sources of income. A large portion of the population lacked formal education, even when this statistic counted Chinese schools which the British did not recognize. Entrepot trade, the main use of Singapore's port and the original reason for Singapore's success in the 19th century, was no longer sufficient to support the large population.
Singapore invested heavily to promote economic growth. The Economic Development Board was set up in 1961 by Goh Keng Swee, and with the assistance of Dutch economic advisor Dr Albert Winsemius, national economic strategies were formulated to promote Singapore's manufacturing sector. Industrial estates were set up, especially in the reclaimed swampland of Jurong, and government ministers toured the world in order to try to attract foreign investment. The government offered new investors tax holidays of 5–10 years. Singapore's port gave her an advantage over her neighbouring countries, being a favourable spot for efficient exports of refined goods and imports of raw material. This meant that industries in Singapore found international markets easily, and cheaper prices for raw goods. Singapore's growing industrialisation meant that entrepot trade had been extended into processing of imported raw materials into exported finished products — leading to higher value-added goods which brought more income to the island. This ended up being a suitable alternative to a common market to the Malaysian hinterland, although later a form of it ended up being formed with the creation of ASEAN. The service industry also grew at this time, sparked by demand for services by ships calling at the port and increasing commerce. This progress helped to alleviate the unemployment problem. With Winsemius's help, Singapore attracted big oil companies like Shell and Esso to establish oil refineries in Singapore which became the third largest oil-refining centre in the world by the mid-1970s.
The new direction that Singapore took demanded a skilled labour force to engage in her revised role of refining raw goods, as opposed to the traditional natural resource extraction industries of her neighbours. Its leaders decided early on that the population would need to be fluent in the English language, as they would be communicating and cooperating with expatriate employers or business partners abroad, and English was adopted as the medium of education for all schools. The education system was designed to be rigorous and intensive, with emphasis on immediately practical, rather than intellectual, applications, such as on technical sciences as opposed to political discussion or philosophy. A large portion, around one-fifth of Singapore's budget, was devoted to education to facilitate a large and competent workforce upon graduation. The government of Singapore currently maintains it at this level.
There was a lack of good housing and a proliferation of squatter settlements. Combined with the high unemployment rate, this led to social problems from crime, a low standard of living, and unrest. The other deleterious effect of squatter settlements, was that many of these were built of highly flammable materials, were poorly constructed and thus posed a high fire risk. A prominent example in this case is the Bukit Ho Swee Squatter Fire that broke out in 1961. In addition, there was poor sanitation, which led to the spread of infectious diseases.
The Housing Development Board set up before independence continued to be largely successful under Lim Kim San. Huge building projects sprang up to provide cheap, affordable public housing to resettle the squatters, hence removing a serious social problem. 25,000 apartments were built in the first two years. It was remarkable that, within a decade, the majority of the population had been housed in HDB apartments. Possible explanations for the otherwise seemingly impossible success was the determination of the government, the large budget allocations, and efforts to eliminate red tape and corruption. In 1968, the Central Provident Fund (CPF) Housing Scheme was introduced to allow residents to use their CPF savings to purchase HDB flats, which gradually increased home ownership in Singapore.
Another problem facing Singapore was the lack of national identity and unity among most of the population. Many people were born in foreign lands and still identified themselves in terms of countries of origin, rather than being Singaporeans. This posed possible problems of loyalty, reliability and the possibility of further racial riots. In order to resolve racial tension, a policy to create national identity through education in schools and flag raising and lowering ceremonies was implemented. This is constantly re-emphasized within the curriculum and "National Education", a compulsory program of which the main goal is to inculcate students with a sense of "national fraternity". The Singapore National Pledge, written by Sinnathamby Rajaratnam, was introduced in 1966 emphasizing unity among the people "regardless of race, language or religion."
The system of justice and law in Singapore was reformed and the government implemented several measures to overcome labour unrest and disputes. Strict labour legislation was passed to provide better protection to workers but yet allow for greater productivity by permitting longer working hours and reducing holidays. The labour movement was further consolidated under the National Trades Union Congress with close oversight by the government. By the end of 1960s, the number of labour strikes was significantly reduced. Singapore took the step of nationalising companies that would not survive on their own, or could otherwise be detrimental for Singapore if they were not closely in line with government policy because they were a public service. Singapore Power, Public Utilities Board, SingTel and Singapore Airlines (SIA) are prominent examples. Such companies that were nationalized were often infrastructure or utility companies, companies meant to lay out services such as electricity or transport for the benefit of other companies. The extension of power infrastructure, for example, led to an increased attraction of foreign investors. Recently, the government has taken steps to privatize these previous monopolies - SingTel and Singapore Airlines are now publicly listed, limited liability companies, even though the government still holds large shares in them.
The other major issue brought up around this time was national defence. Following independence, the British were still defending Singapore, but had announced they would be withdrawing by 1971, due to pressures at home and military commitments elsewhere in the world. This caused considerable alarm locally, particularly among those who remembered the Japanese occupation when Singapore had been defenceless during World War II. In 1965, Goh Keng Swee became Minister for the Interior and Defence, and initiated the formation of a national defence force, called the Singapore Armed Forces, which was to be established by the time of the British withdrawal. The British agreed to postpone the withdrawal for half a year, but no longer. Singapore consulted international experts from West Germany and Israel to train their armed forces and equip them. As a small country surrounded by larger neighbours, Singapore allocated a large portion of its budget, around 19%, to defence and this still continues today, having the fourth largest per capita military expenditure in the world, after Israel, United States and Kuwait.
Singapore was especially interested in Israel's model of national service, a factor in its decisive victory in the Six-Day War over its Arab neighbours in 1967. This led to the implementation of Singapore's own national service programme starting in 1967. All eighteen-year-old males would be required to participate in national service and train full-time for two and a half years, and then required to repeatedly come back each year to maintain their skills in order to carry out an effective mobilisation at any time. This policy meant that Singapore could quickly mobilise enough defence forces to deter any invasion, especially against Indonesia during the Confrontation, when the British withdrew in September 1971. Females were left out of national service — the explanation being that, during a time of war, they would be required to support the economy while the men were fighting. This policy is sometimes questioned as being sexist and has been discussed in the mass media a number of times together with the length of training involved. The creation of the national service policy is thought to aid the strengthening of national and racial ties since there is a sense of unity when training as a youth with peers of other races.
Read more about this topic: History Of The Republic Of Singapore