The Transition Of Singapore's Foreign Investment Policy At The Beginning Of Its Independence

As a small but rich Southeast Asia island country, Singapore's development achievements today are for all to see, which its people also feel proud of. To study the beginning of its development and prosperity, it must date back to the beginning of its autonomy in the 1950s of 20th century. Lee Kuan Yew headed the People's Action Party to the continuous exploration and practice of Singapore's economic, political and social development.The entire history of modem Singapore is related to foreign capital. At the beginning of autonomy, under the bad natural, historical and social circumstances, the choice of the developmental path of the People's Action Party was directly related to the development of the entire nation's future and destiny. As part of the government's decision-making, the foreign investment policy played a key role in the economic development.This paper discusses the motivation of the evolution of the foreign investment policy of the initial stage of Singapore's economic development, that is, from the autonomy in 1959 to the early days of independence (before the world economy crisis in 1973). Before the separation of Singapore and Malaysia in 1965, the government mainly absorbed private capital to start industrialization, and foreign capital was not in a particularly prominent position. While after the separation of Singapore and Malaysia in 1965, the government had to attract foreign investment as the main strategy of industrialization. The objective factor of this change was due to Singapore's unique natural conditions and social, political structure. Government leaders must overcome these disadvantages, and use foreign capital for economic development. The main motivation was the astute pragmatic and nationalistic considerations headed by Lee Kuan Yew's People's Action Party. The PAP government took initiatives to attract foreign capital to develop economy, and controlled the direction of foreign capital. At the same time, the international environment provided a good opportunity for Singapore government's foreign capital development strategy.At that time, the developing countries and regions of Southeast Asian generally believed in economic nationalism. They feared the infiltration of foreign capital would affect their political stability. While the leaders of the People's Action Party of Singapore had their unique opinion. With the principle of pragmatism and the supremacy of national interests in their minds, they took initiative to invite foreign investment to come in and always controlled the direction of foreign capital. Foreign investment served as a useful tool for economic development in Singapore in this way, and thus gave birth to the myth of Singapore's rapid economic development.