Singapore.Inc

The policies implemented by the government were effective in transforming Singapore into one of the most open and competitive markets in the world.

Summary: It is evident that the Singaporean economy has grown exponentially over the past decade but nobody seems to agree why? Their dependence on external markets has pushed them towards an open economy and has attracted a great deal of foreign investments. Using its modernity strategy, Singapore fights to keep its competitive edge and I believe that the policies implemented by the Singaporean government were effective in transforming Singapore into one of the most open and competitive markets in the world.

Main arguments

Efficient implementation of an export-oriented growth strategy

* Liberalization of trade increases competition and specialization among countries. It gives the goods and services exported from a country a competitive advantage over products from other countries and therefore improves the efficiency of the economy.

* By becoming a member of the ASEAN, Singapore was able to promote regional trade, enlarge its market size and enhance the exports of their goods and services. Over 70% of all trades between the ASEAN countries moves through Singapore.

* Singapore expanded globally by pursuing its own international trade agreement with the United-States, Mexico, Japan, New Zealand and Australia.

* The elimination of non -tariff barriers on a regional and international level, along side the improvement of its ports, allowed Singapore to increase it's exports, offer more jobs and lower the cost of transactions. Which then lead to a boost in Singapore's economic efficiency and growth.

The Increase in Singapore's foreign direct investment will lead to economic growth

* By promoting FDI, a country will gain technology, employment, managerial expertise and human capital which leads to an increase of the overall economy performance and help the country build a competitive advantage.

* Size effect: Singapore uses low tax incentives to attract and increase foreign investments. Tax exemption is given to start-ups and to MNC for a period of five to ten years. The low taxation strategy gives a competitive edge to Singapore compared to other countries because of firm's interest in low taxable income.

* Skill and technology effect: Singapore understood the importance of increasing capital intensive and technology industries as well as anticipating the future needs of the country by educating workers in advance. They built their economy based on science, technology, skills and knowledge by continuously investing in education and by improving the skills of their labor force.

* Structural effects: the efficiency of the infrastructures and of the public services, makes it quick and easy for manufacturers to open a plant and for a firm to open a branch in Singapore. This gives a competitive advantage to Singapore by reducing transaction costs compared to other countries where the environment is less enabling and the bureaucracy is burdensome

Entreprise ecosystem: Singapore is an innovation-driven economy