chapter two

governance in singapore
1. Four Guiding Principles of Governance

1.1. Leadership is Key

 Good leaders are needed to maintain stability in the government
 Good leaders will help to make the right decisions for the country
 Leaders must also be honest and upright
 If leaders are corrupted, it could lead to disaster
 For example, good leaders can help to provide opportunities for local talents to
collaborate with their international partners
 This will allow them to learn from their peers and their needs will be taken care of

1.2. Anticipate Change and Stay Relevant

 The government needs to expect changes to the future, and be forward-looking
 This will allow them to plan ahead to meet future needs
 Leaders must have the vision and creativity to come up with the right policies
 They must also be willing to take risks
 For example, Newater was introduced to ensure Singapore is self-sufficient
 Also, Integrated Resorts were established so the tourism sector can remain
competitive

1.3. Reward for Work and Work for Reward

 This policy rewards people based on hard work and talent
 Meritocracy helps to give everyone an opportunity to achieve their best and be
rewarded, regardless of race, language, religion or socio-economic background
 When people are rewarded based on hard work, they will be motivated to do well
 For example, Edusave awards are given to students who perform well in their studies
 Singaporeans also receive rewards in the form of Progress Package if they have
helped the economy to do well

1.4. A Stake for Everyone, Opportunities for All

 This policy allows people to have a say in decision-making
 Singaporeans will then feel a sense of belonging to the country
 Every community is treated fairly so the interests of various communities are kept in
balance
 For example, feedback sessions are conducted for Singaporeans to voice their
concerns
 Policy decisions can be made after considering the peoples’ concerns

social studies notes | page 1

2. Measures to control Traffic Flow

2.1. Area Licensing Scheme (ALS)

 This was introduced to manage traffic flow in the Central Business District (CBD)
 This scheme ensured that all motorists have to pay to use certain roads in the CBD
 These areas were marked as Restricted Zones
 Motorists had to buy ALS labels to enter these Restricted Zones
 Gantries were set up to monitor traffic flow and ensure motorists have ALS labels
 This system was expensive and labour-intensive
 However, it succeeded in decreasing the number of vehicles in the CBD during peak
hours

2.2. Electronic Road Pricing (ERP)

 This system used up-to-date technology to control traffic flow
 This enabled the government to stay relevant with the times
 Motorists have to pay to use certain roads during peak periods
 This allowed peak hour traffic to be successfully controlled
 By using technology to monitor and regulate traffic flow, it increased efficiency
 ERP later replaced ALS as it was also more cost-effective

2.3. Park-and-Ride Scheme

 This was introduced at the same time as ALS to control traffic flow in the CBD
 This scheme allowed motorists to park their vehicles at specific car parks outside the
CBD
 Motorists were then encouraged to use public transport to enter the CBD during peak
hours
 However, this system was not successful
 Motorists used the regular bus services instead
 Some even drove into the CBD before the ALS started
 Therefore, the government lost a lot of money from the unused car parks
 Bus companies hired to shuttle these passengers were also unable to survive

2.4. Vehicle Quota System (VQS)

 This scheme was introduced as there was a sharp increase in the number of car
owners in the 1990s
 The government saw an urgent need to control the car population in Singapore
 LTA restricted the number of new motor vehicles allowed for registration
 The COE system was introduced to ensure the number of new cars does not exceed
the quota set by LTA
 This limits the number of new cars that can be purchased
 Car buyers must bid for the COE before purchasing a car
 COE only entitles the motorist to own the car for 10 years

social studies notes | page 2

3. How the government promoted Population Growth

3.1. Graduate Mothers Scheme

 This policy was introduced as it was found that graduates were marrying later
 Also, graduate women were not having enough children
 Based on research, it was believed that the education level of parents directly
affected the performance of their children in school
 The government encouraged marriage among graduates
 It also encouraged them to have more children, where incentives will be given
 The less-educated felt this scheme was unfair as it neglected them, and it was also
bias towards them
 This policy was removed after one year as many people reacted negatively towards it

3.2. Three or More if you can afford it (Three-child Policy)

 Singapore was experiencing a slow population growth as families were not having
enough children
 Families were also starting to feel that it was too expensive having many children
 Parents were encouraged to have three or more children, if they can afford it
 The government introduced incentives to encourage more births
 Families were helped financially as government allowed them to use Medisave to pay
for delivery charges
 However, this policy was not very successful as Singapore still has one of the lowest
birth rates

3.3. Pro-family measure scheme

 In 2004, the government introduced many measures to help families have more
children
 There were many concerns with the high cost of raising children, as well as the lack
of suitable childcare arrangements
 These measures encouraged people to marry early and become parents:
o Equalised medical benefits
 both parents can now make medical claims for their children from their
employers
o Grandparent caregiver relief
 families will be given an income tax relief if they live with their parents
who can look after their grandchildren
o 5-day work week for the Civil Service
 families will be able to have a work-life balance, and they can spend
more time with each other
o Extended maternity leave
 mothers will be able to care for their newborn for a longer period of
time

social studies notes | page 3

3.4. Attracting foreign talent
 The government wanted to encourage foreigners to work and live in Singapore, and
also to increase its population
 It hopes that the foreigners will take up permanent residence or citizenship
 The government relaxed its immigration policy to allow more foreigners to work in
Singapore
 The government also gave subsidised housing and attractive education packages for
children of these foreigners
 It was believed that the foreigners would also be able to help Singapore stay
competitive through their skills and talents
 Singapore has therefore become more cosmopolitan

4. How the government met the Challenges of an Ageing Population

4.1. Senior Citizens as assets to society

 The government wanted to encourage senior citizens to be more independent
 It wanted to ensure senior citizens continue to contribute to society
 Senior Citizens were encouraged to add value to the public and private organisations
by imparting their skills, knowledge, talent and work experience
 This will enable the senior citizens to be seen as valuable members of the society

4.2. Many Helping Hands Approach

 This policy encourages everyone to play a part in preparing for an ageing population
 This ensures that the individual, family and community all play an important role
 Through shared responsibility, the government does not have to be fully responsible
for looking after the senior citizens
 People do not have to worry about taxes being increased
 Government resources can be used more efficiently to meet other needs

4.3. Individual Responsibility

 Individuals are encouraged to be independent and look after their own needs
 By maintaining a healthy lifestyle, senior citizens will not fall sick so often
 This would ensure they are not troubled by high medical fees
 Singaporeans are also encouraged to have early financial planning
 This enables them to have enough money for their old age

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4.4. Family Support
 Families are encouraged to maintain strong bonds
 This will help give the ageing population emotional, social and financial support
 The government also encourages families to appreciate the elderly through
Grandparents’ Day
 People are also encouraged to have a positive attitude towards ageing and the
elderly

4.5. Community Help

 The community is encouraged to enhance the well-being of senior citizens
 It is believed they can give social and emotional support
 They can also provide healthcare and social services
 Welfare organisations will receive government support so they can run healthcare
services for the senior citizens
 Senior citizens can also receive free health checks through these organisations
 This ensures that senior citizens remain physically, mentally and socially active

4.6. Government Support

 The government has a responsibility to take care of the senior citizens
 The introduction of CPF will ensure senior citizens have money for their old age
 They can also use their savings in these accounts for medical expenses
 Families looking after their elderly can also claim income tax deduction
 This enables families to feel less financially burdened
 First-time buyers of HDB flats are also given a housing subsidy if they apply to stay
near their parents
 This further ensures the ageing population are cared for

social studies notes | page 5

 chapter three
managing healthcare
1. Healthcare Approaches in Singapore

1.1. The Role of the Individual

Self-reliance
 Singaporeans should not depend on the government for our healthcare
 Healthcare is a shared responsibility
 Medisave and Medishield allow us to pay part of the medical expenses
 Helps us to share the costs of healthcare with the government
 Also helps to lighten the government’s burden of paying for healthcare
 Government will not have to raise taxes to pay for rising healthcare costs

Maintain good health

 Singaporeans need to be personally responsible for their own health
 Maintaining a well-balanced diet and regular exercise will keep people from falling
sick
 We spend less on medical expenses if we maintain good health

1.2. The Role of the Government

Keep healthcare affordable
 It is the government’s duty to provide basic healthcare services
 However, government cannot be fully responsible or healthcare will become a burden
 Schemes are introduced to help individuals save on medical costs
 Subsidies are given to government hospitals and polyclinics
 Especially helpful for lower-income families as they have higher subsidies
 Medifund also helps needy patients who do not have enough in their Medisave

Promote healthy lifestyle

 Medical costs are rising
 Government encourages Singaporeans to maintain good health so they spend less
on medical treatment
 Programmes in schools and workplaces emphasise the importance of a healthy
lifestyle
 Bad habits such as smoking and drinking are also discouraged

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1.3. The Role of the Community
Provide healthcare and support services
 It is not possible for government to run all healthcare services
 Government gives voluntary organizations some money to run community hospitals
and nursing homes
 Some organizations provide specific healthcare support services to help certain
groups of people, or people with a specific type of illness

2. Managing Healthcare in Britain

2.1. Manage Government Spending

 British Government was spending too much money on welfare benefits
 If healthcare costs increase, the government must collect more taxes
 In the 1980s, the government spending on healthcare decreased
 People were encouraged to be more responsible for their own welfare
 In 2000, the government increased spending on healthcare to improve the NHS
 In 2003, the British public contributed more money to the national insurance to
support the NHS

2.2. Increase Efficiency

 Britain experienced an increase in demand for healthcare as there were more elderly
 NHS expanded but there were still insufficient resources to cope with the demand
 Privatisation was introduced to reduce government subsidies, save costs and make
NHS more efficient
 Private companies took charge of non-medical services to allow hospitals to focus on
providing good quality medical services
 Patients were given more choices and hospitals had to improve their services
 British people were also encouraged be more responsible for their own welfare and
health so they do not abuse the services offered by NHS
 NHS became more efficient as a result

2.3. Provide Quality Service

 People felt the NHS had poor service
 Patients had to wait for a long time before receiving medical treatment
 People were given more information to help them decide on their own treatment and
care
 NHS introduced an Improvement Plan so patients can access their own healthcare
records, choose their own healthcare provider and call NHS Direct to get medical
advice on minor illnesses
 NHS managed to save time and resources and focus on providing quality service

social studies notes | page 7

 chapter four
conflicts in multi-ethnic societies
1. Conflict in Sri Lanka

1.1. Causes of Conflict

1.1.1. Citizenship Rights
 Sri Lanka only granted citizenship to a few Tamils
 Many Tamils who had been working in the tea plantations found themselves stateless
 The Sri Lanka government did not keep to the agreement with India to grant
citizenship to all Tamils
 Stateless Tamils felt discriminated as they could not vote, even though they had
contributed to the economy

1.1.2. “Sinhala Only” Language Policy

 The government made Sinhala the official language of administration
 Tamils found it difficult to get jobs
 Tamils were upset and felt they were treated unfairly
 Tamil was declared a national language in 1978 but it was never widely used or
accepted

1.1.3. University Admission Criteria

 Favoured the Sinhalese and was unfair towards Tamils
 Tamils had to score higher marks to enter the same course
 Fewer Tamils were admitted to the university
 Tamils could not gain better education
 Tamils became unhappy as they were treated like second-class citizens

1.1.4. Resettlement
 The government relocated large numbers of Sinhalese to the Tamil areas
 Government did this to provide land for Sinhalese who had no land
 Tamils were unhappy because Buddhist monks and Sri Lankan army also moved to
the Tamil areas
 Tamils had less land for their own use

social studies notes | page 8

1.2. Consequences of Conflict
1.2.1. Political
 Armed Conflict
o LTTE was formed to demand for a separate state
o They resorted to violence and became terrorists
o LTTE attacked Sinhalese and Tamils who did not support them
o Many lives were lost and property was destroyed
o Tamils and Sinhalese started to hate and distrust each other, and even
became hostile towards each other

 Foreign Intervention
o India tried to help solve the situation but failed
o India interfered by sending food and supplies to Tamils
o Indian Air Force also violated Sri Lankan airspace
o Indian peacekeepers retreated after fighting with LTTE

1.2.2. Economic
 Unemployment
o Riots caused people to lose their jobs because it was unsafe to go to work
o Jobless people started to vandalise, steal and cause more damage to Sri
Lanka
 Loss of investors
o Political instability caused companies to stop investing
o Investors did not have the confidence in the country
 Fall in number of tourists
o Tourists felt it was too unsafe to visit the country
o There were not enough funds to develop facilities, housing and transport for
people
o No one wanted to visit, so the economy was affected

1.2.3. Social
 Large groups of people were driven out of their homes
 Many Tamils escaped to India and are refugees, living in overcrowded conditions

social studies notes | page 9

2. Conflict in Northern Ireland

2.1. Causes of Conflict

2.1.1. Divided Loyalty
 Protestants saw themselves as British, Catholics saw themselves as Irish
 Both groups do not see themselves as part of the same country
 Protestants believe a Catholic government will not tolerate their beliefs
 Catholics want to reunite with Ireland as they cannot stand the way the British
government is treating them
 Their divided loyalties to different countries caused hatred towards each other

2.1.2. Unequal Housing Allocation

 City council decides who gets public houses
 Council is made up of government, who are mostly Protestants
 Catholics have to wait a long time before they get houses
 Sometimes, more houses are given to Protestants instead of Catholics
 Catholics are angry that priority is given to Protestants, as they have to wait very long
before they are given a house

2.1.3. Unequal Employment Opportunity

 It is more difficult for Catholics to find jobs, especially government jobs
 Catholics feel they are not getting the same job opportunities even though they have
the same qualifications as Protestants
 More Protestants hold senior positions, compared to Catholics
 The discrimination caused the Catholics to be very upset

2.1.4. Lack of Voting Rights

 Before 1969, Protestants had more votes than Catholics
 Only those who owned houses and business could vote
 More Protestants owned houses and businesses, so more Protestants could vote
 Catholics were upset as the voting rights were unfair and biased against them
 After 1969, voting became fair because anyone who is a British citizen and above 18
years old was given one vote

2.1.5. Lack of Opportunities for Social Interaction

social studies notes | page 10

  Education System
o Protestants go to government schools, Catholics go to private schools
o Both schools taught different things to the children
o The children did not get to mix with each other and this caused them to hate
and distrust each other even more
 Separate Residential Areas
o Protestants and Catholics live in different areas
o This caused them to have very few opportunities to mix with each other,
causing more misunderstanding and hatred among each other

2.2. Consequences of Conflict

2.2.1. Armed Conflict
 IRA was formed to fight for Catholics’ rights, but they used violence
 This caused a lot of chaos and deaths, and the country became more divided
because of religion and different loyalties

2.2.2. Social Segregation

 People decided to separate themselves in terms of school and residential areas
 They became more prejudiced towards each other
 They blamed each other for the violence
 They started hating each other more, and did not trust each other

2.2.3. Declining Economy

 Properties were destroyed because of the conflict
 Tourists and businesses were afraid to visit and invest in the country
 The economy became weak as it did not have enough income

2.2.4. Political Reform

 Northern Ireland kept reorganising the government to improve the system
 Government became weak as Catholics and Protestants refused to share power
 However some positive changes occurred (e.g. voting system was improved)

social studies notes | page 11

 chapter five
bonding singapore
1. Challenges of a Multi-Ethnic Society
1.1. Racial Issues
 Race is a sensitive topic because Singapore is a multi-ethnic society
 Must promote racial harmony to maintain peace and prevent social and political
chaos
 E.g. Racial riots in 1964 caused a lot of deaths and destruction
o UMNO provoked Malays in Singapore to fight for their rights
o Increased tension between Chinese and Malays caused riots

1.2. Religious Issues

 Religion is a sensitive topic because Singapore has many religious groups
 Must promote religious harmony to maintain peace and prevent riots and distrust
among
 various groups
 E.g. Maria Hertogh riots in 1950 caused a big conflict between Muslims and
Christians
o Maria was raised a Muslim but had to return to her Dutch parents
o Muslim community was upset and riots were started

1.3. Threats from External Forces

 Harder to control because they are external problems, not internal problems like
Racial and Religious issues
 Terrorism can affect Singapore’s economic progress
 Tourism industry is affected because people stop traveling for security reasons
 E.g. Bali bombings
o Hotels were almost empty and tourists took some time before they felt it was
safe to travel to Bali again
 Terrorism can also affect Singapore’s racial and religious harmony
 Terrorists can use race and religion to cause fear and create conflict among
Singaporeans
 E.g. JI almost attacked Singapore but were caught in time

social studies notes | page 12

2. Managing Ethnic Differences in Singapore

2.1. Building a National Identity

 Multi-racialism
o Promotes racial harmony and religious freedom
o Every community is treated fairly in Singapore
o No community is favoured or at a disadvantage
o Recognises and uses four official languages so communities can keep and
develop its own language and culture
 Bilingualism
o Taught in schools
o Compulsory because English is used for communication while Mother Tongue
is used to impart values and traditions
o Helps Singaporeans to develop national identity
o Also enhances responsibility and commitment to the family, community and
country
 Common practices
o Carried out by all Singaporeans to build a sense of belonging and national
pride
o Flag raising, pledge taking and singing national anthem encourages loyalty
and nation building

2.2. Safeguarding the Interests of Minority Groups

 Minority representation
o Achieved through Presidential Council of Minority Rights (PCMR) and Groups
Representation Constituency (GRC)
o Each GRC must have at least one member of minority group
o Ensures minority groups have a say in governing the nation
o Also ensures the government knows the needs of minority groups
 Self-help groups
o Various races form their own self-help groups to improve education and
employment status
o E.g. MENDAKI (for Malays), SINDA (for Indians), CDAC (for Chinese) and
Eurasian Association
o Give moral support to members of their own community
o Also helps improve social and economic positions

2.3. Developing Common Space

 Events and programmes organized by grassroots organization
o Caters to the needs and interests of every Singaporean
o Allows participants to gain a better understanding of the cultures and customs
of other races
 Education system

social studies notes | page 13

 o Provides opportunities for Singaporeans to interact with each other and foster
better social bonding
o Teaches everyone to respect and appreciate each others’ culture
o National Education was introduced to help students foster stronger bonds
among themselves
 Common living space (Public Housing)
o More opportunities for races to mix with each other in a common public
housing area
o Residents get to know each other when they participate in activities organized
by the Resident Committees (RC)
o Singaporeans will become more tolerant and understanding of different races
and religions
 National Service
o All 18-year-old males are called up for full-time service so they can be trained
to defend the country
o Young men share experiences that strengthen bonds and creates friendship
with people of all races and religions

social studies notes | page 14

 chapter six
deterrence and diplomacy
1. Causes of Conflicts
1.1. Competition Over Territory
 Countries fight for power and resources
 Having more territory can help countries in terms of defence and increase national
pride
 E.g. China and India fought over border around Aksai Chin and NEFA
o Border was not clearly drawn
o Tension increased when China built a road in Aksai Chin
o India felt the area belonged to them
o War broke out in 1962, but did not last long
o The border conflict has not been solved, but India and China have signed an
agreement to address the issue in a fair way

1.2. Competition Over Natural/Scarce Resources

 Some countries have more resources than others
 Countries fight for survival and economic growth
 E.g. Iceland and Britain fought over fish
o Iceland had a lot of fish but Britain kept fishing in their area
o Both sides blamed each other whenever their ships collided
o Iceland broke off diplomatic ties with Britain
o The conflict was settled when they signed an agreement in 1976

1.3. Competition Over Ideological Differences

 Countries have different values and beliefs
 They fight when they see their ideological beliefs being threatened
 E.g. Korean War between North and South Korea
o North Korea is communist, South Korea is democratic
o Both countries were divided after World War 2
o North Korea invaded South Korea
o USA and her allies, and the UN helped South Korea as they did not want
communism to spread
o A demilitarized zone was created in 1953 and both Koreas signed an
agreement to stop the fighting

social studies notes | page 15

2. How Singapore practices Deterrence
2.1. Citizen Armed Force
 Singapore needs our own defence force because Japanese Occupation, Racial Riots
and Indonesian Confrontation taught us we have to fight for ourselves
 All 18-year-old males will be trained full-time so a trained army force is always ready
to defend Singapore
 Helps to ensure economic resources and manpower are not wasted

2.2. 3rd Generation SAF

 Creates an intelligent defence force
 Uses modern technology to maximize defensive capabilities
 Equips soldiers with better weapons and technology to fight more effectively
 Air Force, Navy and Army operate together to provide early intelligence which will
help to destroy the enemy early

2.3. Defence Industry

 Helps to prevent or resolve conflicts as we have an independent defence industry
 Set up to ensure we have a supply of arms for our soldiers
 Also to build our own defence technology
 Ensures Singapore is self-reliant in defence weapons and equipment
 This also saves money and we can continue to upgrade our weapon systems

2.4. Total Defence

 Consists of Military Defence, Social Defence, Economic Defence, Civil Defence and
 Psychological Defence
 Engages every Singaporean to defend Singapore
 Singaporeans can be prepared and self-reliant during emergencies
 Enemies will face the whole population, not just the armed forces

2.5. Multi-agency Coordination

 Close networking and coordination of various government agencies
 Intelligence and resources are shared
 Helps to strengthen and improve Singapore’s national security
 Ensures Singapore can prevent, protect and effectively respond to any security
threats

2.6. Military Cooperation with Other Countries

 We do not have enough training areas
 Singapore fosters friendly ties with other countries (e.g. Australia, India, New Zealand
and ASEAN countries)
 Our troops gain military experience by training in jungles, making battle plans and
practicing on the seas during defence exercises

social studies notes | page 16

2. How Singapore practices Deterrence
2.1. Citizen Armed Force
 Singapore needs our own defence force because Japanese Occupation, Racial Riots
and Indonesian Confrontation taught us we have to fight for ourselves
 All 18-year-old males will be trained full-time so a trained army force is always ready
to defend Singapore
 Helps to ensure economic resources and manpower are not wasted

2.2. 3rd Generation SAF

 Creates an intelligent defence force
 Uses modern technology to maximize defensive capabilities
 Equips soldiers with better weapons and technology to fight more effectively
 Air Force, Navy and Army operate together to provide early intelligence which will
help to destroy the enemy early

2.3. Defence Industry

 Helps to prevent or resolve conflicts as we have an independent defence industry
 Set up to ensure we have a supply of arms for our soldiers
 Also to build our own defence technology
 Ensures Singapore is self-reliant in defence weapons and equipment
 This also saves money and we can continue to upgrade our weapon systems

2.4. Total Defence

 Consists of Military Defence, Social Defence, Economic Defence, Civil Defence and
 Psychological Defence
 Engages every Singaporean to defend Singapore
 Singaporeans can be prepared and self-reliant during emergencies
 Enemies will face the whole population, not just the armed forces

2.5. Multi-agency Coordination

 Close networking and coordination of various government agencies
 Intelligence and resources are shared
 Helps to strengthen and improve Singapore’s national security
 Ensures Singapore can prevent, protect and effectively respond to any security
threats

2.6. Military Cooperation with Other Countries

 We do not have enough training areas
 Singapore fosters friendly ties with other countries (e.g. Australia, India, New Zealand
and ASEAN countries)
 Our troops gain military experience by training in jungles, making battle plans and
practicing on the seas during defence exercises

social studies notes | page 17

3. How Singapore practices Diplomacy
3.1. Bilateral Relations
 When two countries form a mutually beneficial relationship with one another
 Countries in a bilateral relationship will help each other during times of trouble
 E.g. Singapore is able to gain advanced technological skills from other nations like
Japan, USA and Germany
 E.g. Singapore is also able to speed up economic and social development after
bilateral ties with China

3.2. Regional Relations

 Countries within the same region form mutually beneficial relationships with each
other
 E.g. ASEAN was formed to:
o Promote common interests and establishes friendly relations among members
o Resolve conflicts in a peaceful manner
o Help member countries to promote economic, social and cultural development
of the region
 Trade opportunities and sharing of new technological skills have benefited member
countries
 Members also enjoy regional peace and stability

3.3. International Relations

 Countries around the world form mutually beneficial relationships with each other
 E.g. United Nations was formed in 1945
 Ensures world peace and stability
 Promotes economic and social development of members
 Provides help such as food and medicine to member countries in need
 Gives member countries the opportunity to vote on decision that will affect them
 International Court of Justice helps members to settle their disagreements peacefully

social studies notes | page 18

 chapter two
globalisation
1. Driving Forces of Globalisation

1.1. Development in Transportation

 Improvement in transportation technology has made the world seem smaller as
travelling time is reduced
 Commercial planes, large ships and containerisation allows goods and people to
easily move from one place to another
 Transportation has also become more efficient with airports, railways and highways
 This promotes globalisation as people become more connected to the world

1.2. Development in Communication

 Improvement in technology has made communication easier, faster and more
convenient
 Satellite technology and optical fibre systems allow messages to be transmitted
quickly and at a very high speed
 Internet allows businesses to communicate more efficiently, and allows us to obtain
information and purchase goods and services easily
 This promotes globalisation as people become more interconnected with each other

1.3. Transnational Corporations (TNCs)

 TNCs are large global firms that operate in many countries
 Some TNCs have production or service facilities outside the country of their origin
 They are set up to look for new markets, and to lower the cost of production
 The business operations are coordinated and controlled by the headquarters
 This promotes globalisation as economies around the world have become more
integrated

social studies notes | page 19

2. Impact of Globalisation

2.1. Economic Impact

 Improved standard of living
o More countries are trading with each other and earning more money
o Governments are able to use the money to make improvements in education,
health, defence, housing and transportation
o This allows people to enjoy a better standard of living
 Increased competition among nations
o Governments compete with each other to make their country more attractive
to TNCs, so they can set up operations there
o E.g. Some cities in China become more well-developed as foreign investors
are allowed to come in and set up production facilities
 Foreign talent
o Highly-skilled people are in great demand around the world
o They can easily move to other countries to find better job opportunities
 Bigger income gap between the rich and poor
o Developed countries continue to attract more investors as they have better
resources
o Less developed countries have lower-skilled workers and face trade
restrictions
o The rich people continue to prosper as they have better opportunities, while
the poor people face economic uncertainties

2.2. Social Impact

 Increased awareness of foreign culture
o Through travelling or surfing the Internet, people become more aware of other
cultures
o This allows people to become more understanding and help reduce
misunderstanding among nations
 Loss of local culture
o Global brands like Starbucks and McDonald’s dominate the market in less
developed countries
o Pop music and pop culture has spread around the world, causing youths to
lose interest in local culture
o This has led some to believe that Western societies are forcing their beliefs,
culture and language on to the rest of the world

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2.3. Environmental Impact
 Deforestation and other related problems
o Less developed countries who have plenty of natural resources are willing to
cut down rainforests to develop agriculture and infrastructure
o As a result, environmental problems such as erosion, extinction and flooding
occurs
 Global warming
o Advances in technology has caused aeroplanes and ships to release
greenhouse gases
o This causes the global average temperature to rise, which may lead to natural
disasters
 Environmental management
o People are now more aware of the need to preserve the environment
o Governments try to come up with alternative energy sources like wind, solar
and geothermal power to preserve the environment

3. Singapore’s strategies to overcome challenges of globalisation

3.1. Diversify the economy

 Become a centre for technology-intensive, high value-added manufacturing activities
such as chemical engineering and pharmaceuticals
 Venture into areas like Life Sciences, to develop new medical treatments, new drugs
and food products
 Attract TNCs to set up operations here so these companies can use Singapore as a
base for their high value-added manufacturing activities (eg. Seagate)
 Encourage international universities to set up branches in Singapore, to help
establish Singapore as an education hub (eg. University of Chicago Graduate School
of Business)
 Promote tourism by building 2 IRs in Marina Bay and Sentosa
 By diversifying the economy, there will be less reliance on one particular industry so
the country can still remain strong if that industry falls, since there will be other
industries to continue generating revenue for Singapore

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3.2. Nurture growth of Small and Medium Enterprises (SMEs)
 SMEs are important as they make up a large percentage of businesses in the
Singapore economy
 SMEs also support the operations of TNCs by supplying them with components in the
manufacturing process
 Schemes to assist SMEs:
 Banks have various loan schemes catering to the needs of SMEs
 ASME (Association of Small and Medium Enterprises) was set up to help SMEs (eg.
Conducting seminars and workshops)
 New companies are granted tax exemption on their first $100,000 income for up to 3
years
 SMEs are important as they provide employment opportunities and it also helps
attract TNCs, so Singapore can gain more income for development

3.3. Venture abroad

 Singapore faces the challenge of having limited land and natural resources
 Achieved through regionalisation – investing in nearby countries that have abundant
land, lower labour costs and new markets (eg. SingTel)
 Singapore aims to provide the expertise and capital to develop industrial parks in host
countries, who later provide land and labour for Singapore companies (eg. Suzhou
Industrial Park)
 This helps Singapore to ensure that if our country’s investments do not work out in a
region, there will be other regions to rely on

3.4. Expand market reach through economic cooperation

 Singapore has a small domestic market because of our small population
 There is a need to establish trade ties with countries around the world to help local
companies sell their goods to a larger market
 Economic cooperation can be achieved through signing Free Trade Agreements
(FTAs) and setting up Special Economic Zones (SEZs), where goods can be sold
cheaper
 This allows Singapore to sell our manufactured goods at more competitive prices

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3.5. Manage resources efficiently
 Develop local talent
o Promote local entrepreneurship and technopreneurship
o Inspire more entrepreneurs to achieve greater success by recognising
outstanding local entrepreneurs who have struggled and succeeded
o Promote continuous learning among the workforce
o WDA (Workforce Development Agency) was established to ensure that the
workforce remains competitive
 Attract foreign talent to meet manpower needs
o Help to create more business opportunities and jobs in Singapore as new
skills can be brought in
o Singapore can also become more attractive to foreign investors
 Careful management of the environment
o Managing limited land resources through proper planning and allocating them
appropriately to meet the needs of the country
o Cooperation with regional and international organizations to share knowledge
and expertise
o Public education to encourage Singaporeans to become more environment-
friendly so the government does not have to spend too much money cleaning
up the environment

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