DPU Working Paper - No. 68
Wage/Foreign Labour Policies and Performance of Singapore's Manufacturing In The Early 1980s
26 June 1995
Authors: Hiroyuki Ueda
Publication Date: 1995
The Singapore economy registered a negative annual rate of growth in real GDP of -1.6 percent in 1985. This was in contrast to double digit annual real growth rates in the early 1970s and rates fluctuating around 8 percent in the late 1970s and the early 1980s. Since the nature of the Singapore economy is a state directed one, where the government intervenes in almost everything, e.g. the long-term and the strategic plans, the regulation of currency and the shaping of a future industrial structure, etc. (Harris 1986: 60), the recession led one to ask whether there were policy mistakes.
In fact, the government had instituted a highly controversial programme, which sought to restructure Singapore's economy toward capital- and skill-intensive one by deliberately increasing labour cost. Some studies also identified the tight immigration policy for unskilled foreign labour as one of the causes of the recession together with other various factors.