The Impact of Globalisation on Singapore
Singapore is the economic, financial and technological capital of South-East Asia. Its free market economy and excellent international trading links ranks Singapore as the 5th highest GDP per capita in the world. Indeed the whole of Singapore's economy is export driven, specialising in manufacturing and the service sectors as well as electronics, industrial chemicals and pharmaceutical products. Singaporeans enjoy one of the highest living standards in South-East Asia. Being one of four Asian NICs, it has sustained an average GDP growth of 10% within the last ten years, except during the Asian Financial Crisis of 1997-98 and also the recent global economic downturn in 2000-2002. The key to Singapore's past success lies in its willingness to open to the world market. International trade in Singapore is equivalent to 300% of its yearly GDP and manufacturing sector FDI alone currently accounts for 70% of total investment. For many decades, the open market ideals adopted by the Singaporean government has changed Singapore into the hub of financial, labour and capital investment. This is an example of globalisation in its best state. While people often look negatively towards globalisation, Singapore has shown with the right management
The Singapore economy contracted in 2001, again due to impacts of globalisation. Singapore's dependence on the state of the US economy showed in 2001 when the USA continued into recession. Demand for technology and other capital goods dropped suddenly in the wake of September 11. With electronics accounting for almost 60% of Singapore's exports and 35% of total employment, the contraction in US electronics demand had adversely impacted Singapore's growth during 2001. Weak household consumptions and tentative FDI levels also contributed to the economic contraction. The emergence of economies like China is becoming a threat to Singapore's dominance. Competitive prices and upward pressure on the Singapore currency meant that countries like China outstripped Singapore for much of its export value. As a result of lower international demand, Singapore firms have been cutting back on spending and retrenchments have exponentially increased. In a workforce of 2.2 million, Singapore's unemployment rate in September 2002 is 4.9%, a sharp contrast to 1.8% in 1997 prior to the Asian crisis. FDI were cut back and spending dried up, real GDP growth reached a 50 year low of -2%. For an economy with a zero percentage in absolute poverty and no gross external debts, these figures looked disturbing. The Singapore Economic Development Board (EDB) has also contributed to the re-growth of economy by devising plans to encourage more FDI in the short to medium term. To create new economic space, Singapore borrows the land and manpower resources of other countries to establish industrial parks in the Asia-Pacific region. Companies, which invest in these parks, benefit from their proximity to Singapore from where they still control their operations, as well as from an operational environment of similar standards to Singapore. Industrial parks have been established across Asia. Thus adding to breaking down of international barriers and liberalisation of trade. and planning, globalisation can be used effectively as a strategy in promoting a healthy and strong economy. The Singapore economy has experienced both positive and negative impacts of globalisation. Its free mark
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Luckily Sing, Financial Crisis, Singapore Industrial, Competition China, South-East Asia, Committee ERC, Board EDB, Asian Crisis, APEC AFTA, Malay Tamil, economic development, singapore economy, south-east asia, gdp growth, real gdp growth, macroeconomic policies, industrial parks, free trade, labour capital, economies singapore, trade barriers,
Approximate Word count = 1459
Approximate Pages = 6 (250 words per page double spaced)
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