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Social and Economic Factors behind the creation of Jurong Island

To facilitate foreign direct investment in manufacturing, the Economic Development Board (EDB), and later the Jurong Town Corporation (JTC), developed industrial sites, science and business parks on state-owned land at various locations throughout the island. Epitomizing the Singapore approach to industrial development is Jurong Island, managed by the JTC. The island is a chemical hub that houses the petrochemical cluster and has been created through large scale land reclamation from an initial group of seven small islands. The island is linked to the mainland by a 2.6 km causeway. When reclamation works are completed in 2005, the size of the island is expected to be about 3,200 ha, which is three times the total size of the original group of seven islands. Jurong Island embodies the government’s industry cluster strategy, where industrial policy is targeted not at the level of individual industries, but at industry clusters, so as to reap the positive network externality effects.

Concurrent with industrial space and infrastructure provision, the Housing and Development Board (HDB) provided affordable public housing for rental and sale (99 year leases). The public housing sector grew eventually to accommodate 86 percent of the resident population. There is an active secondary market for owner occupied public housing which facilitates household mobility subject to minimum occupancy periods. The overall homeownership rate is 92 percent. A competitive bidding system is used to allocate state land to the private sector. State land leases, which typically run for 99 years or less, direct private real estate development towards state determined priorities such as the financial district, new private housing, renewal of specific industrial estates etc.