Singapore economy

Over the past half-century, Globalization has been imminent throughout the world. Globalization can be defined as the movement of mainly economic activity around the world, within a borderless marketplace. Globalization brings both positive and negative effects. One country in which the positives of globalization have far outweighed the negatives is Singapore. Without the global market, an economy that is substantially export-orientated such as Singapore would not be able to function. The global market plays a vital role in the economic development strategies that Singapore implements.

Globalization plays a major role in the concerns all over the world, and this is clearly shown in Singapore. Singapore is the economic, financial and technological capital of South-East Asia. The country has a highly developed trade-oriented market economy. Singapore’s economy has been ranked as the most open in the world, least corrupt, most pro-business, with low tax rates and one of the highest per-capita gross domestic products in the world.

The economy of Singapore is a major Foreign Direct Investment outflow financier in the world, and the economy of Singapore has benefited from the inward of Foreign Direct Investment from due to Singapore’s attractive investment climates. The Gross Domestic Product (GDP) in Singapore contracted 1 percent in the third quarter of 2013 over the previous quarter. From 2007 until 2013, Singapore GDP Growth Rate averaged 5. 4 Percent reaching an all-time high of 36. 4 Percent in March of 2010 and a record low of -13. 0 Percent in September of 2010.

Since gaining independence in 1963, Singaporean economy has been growing rapidly and as a result the country has now one of the highest GDP percapitaintheworld. Indeed the whole of Singapore’s economy is export driven specializing in manufacturing and the service sectors as well as electronics, industrial chemicals and pharmaceutical product. So those bring about greater connectivity which causes globalization impacts of globalization economic social environment and environment effect. Causing environmental degradation, leading to climate change and affecting the earth. So Singaporean government made the Singapore green plan in 1992 and a new editionofitin2012.

Singapore also promoted international convergence as they joined WTO, APEC, IORARC and ASEAN. After they joined the groups, the rate of economic growthandrateofeconomicdevelopmentareincreasing. Singapore was one of the original “Newly Industrialized Countries” (NICs) alongside Hong Kong, South Korea and Taiwan.

Between the 1960s to the 1980s, the manufacturing industry, in particular, was able to attract numerous Multi-National Companies (MNCs) and Foreign Direct Investment (FDIs) into the country. And the economy of Singapore is best described as a mixed economy. Although the country strongly advocates free-market policies and practices, government intervention is also evident in macroeconomic management and major factors of production such as land, labour and capital resources.

This innovative and highly successful economic system – where both the market and the state have equally strong roles in the government – is dubbed as the Singapore Model. Singapore has a relatively small domestic market, and thus has to open its economy to external markets in order for the economy to thrive. However, the inherent vulnerability in depending on external markets compelled the government to enact economic policies that would safeguard the country from perturbations in the global market.

Apart from these policies, the government has also actively encouraged new industries to develop in Singapore so as to respond to the needs of the global market. Globally and regionally, the Singapore economy has demonstrated astounding resilience to financial crises such as the 1997 Asian Financial Crisis or the 2008 Global Financial Crisis. According to the 2011 Index of Economic Freedom, Singapore is the 2nd freest economy in the world. Apart from strong business and regulatory policies, other factors such as the country’s strategic geographic position, a vast natural seaport, a highly skilled workforce and a favourable tax regime, have created a conducive business environment for companies and industries.

Conclusion For more than 40 years, Singapore has enjoyed economic success, allowing Singaporeans to have a raised quality of life and standard of living. However, due to this increase in standard of living, this has caused income disparity among Singaporeans, between the low income families and the high income families. If the widening income gap continues to widen would cause unthinkable economic, social and political impacts in Singapore.

The main challenge policy makers face today is to seek a balance between income disparity reduction, economic growth and budget feasibility. Policy makers should be aware that an overly egalitarian approach towards reducing income inequality is suboptimal. On the whole, the government needs to face the issue of widening income gap with an emphatic heart and mind, thinking for the needs of the people.