RESTRUCTURING Singapore's economy is an ongoing endeavour, and in 1979 the goal was to shift the nation up the value chain towards higher-end production and jobs.
The first step was taken by the National Wages Council, which recommended sharp hikes in workers' salaries as a way to force companies to improve productivity and to pull Singapore out of a low-wage manufacturing base. The Council urged employers to raise wages by S$32 plus another 7 per cent for all workers. Companies were also asked to contribute the higher of 2 per cent or S$5 for workers who earned below S$750 a month for a Skills Development Fund, as well as to increase employer contributions to Central Provident Fund accounts.
Businesses were not pleased, and the reaction from industry was swift and largely negative, warning of layoffs and unsustainable costs. The Government did eventually offer some assistance for companies making the transition.
Singapore was also eager to accumulate the skills and talent that was required to transform the economy towards more technologically advanced industries. Having the right workers made it easier to attract foreign companies to set up operatios in Singapore.
The education system, including the polytechnics, was geared up to help train future workers, but in the immediate term the homegrown workforce was insufficient. Importing human resources was therefore deemed to be a solution.
The Government decided to open its door to skilled workers, offering permanent residency for those who had the knowledge to help in the economic transformation. Businesses were happier about this change.
In the capital markets, the Takeover Code received a much-needed makeover as the quickly evolving corporate scene tested the limits of old rules and necessitated the creation of new ones.
Some of the changes to the Code, including the requirement for target companies to obtain independent advice, remain in force today.
The Business Times has been there to report and analyse the most significant news since 1976. Every week, this feature will showcase excerpts from the biggest stories for each year that the paper has been in operation. The full text of all the stories can be found online at bt.sg/bt_40