A study of Singapore s economic growth
1. INTRODUCTION
Despite its overwhelming small physical size and lack of natural resources, the Singapore economy has experienced rapid economic development since its independence in 1965. Within those few decades, Singapore has metamorphosed from a third world country to one of the countries with the highest GDP globally (292% of global average in 20131). GDP grew with an average of 7.7% since independence; and topped 9.2% in the first 25years. Per capita GDP over the same periods grew by 5.4% and 7.2%2. This transformation has earned the country the nickname of ‘Asian Tiger’ internationally.
This paper aims to study the Singapore’s previous growth story, the challenges it faces now and its strategies for strong and sustainable growth for the next 5 decades.
2. DEFINITION OF STRONG AND SUSTAINABLE ECONOMIC GROWTH
As the term suggest, strong and sustainable economic growth comprises of two main objectives:
Strong: The fastest rate of growth in the national production in the economy while achieving other macroeconomic goals such as low inflation, full employment and external stability.
While sustainable: Where the rate at which national production can increase steadily in the long run while not depleting the economy’s non-renewable resources; taking into account environmental impacts of increased production and ensuring that living standards of future generations will not be compromised by the current growth in production.
In Singapore, economic growth is measured by Gross Domestic Production (GDP) per annum. GDP represents the total dollar value of all goods and services produced over a specific time period. For Singapore, a strong and sustainable GDP growth rate is projected to be around 3-5% per annum with a stable inflation rate of 1-2%3. Rates in access of this can lead to inflation and a fall in quality of living due to an over usage of input factors.
It is worthwhile, however, to take note that while GDP is the most common method of defining
Despite its overwhelming small physical size and lack of natural resources, the Singapore economy has experienced rapid economic development since its independence in 1965. Within those few decades, Singapore has metamorphosed from a third world country to one of the countries with the highest GDP globally (292% of global average in 20131). GDP grew with an average of 7.7% since independence; and topped 9.2% in the first 25years. Per capita GDP over the same periods grew by 5.4% and 7.2%2. This transformation has earned the country the nickname of ‘Asian Tiger’ internationally.
This paper aims to study the Singapore’s previous growth story, the challenges it faces now and its strategies for strong and sustainable growth for the next 5 decades.
2. DEFINITION OF STRONG AND SUSTAINABLE ECONOMIC GROWTH
As the term suggest, strong and sustainable economic growth comprises of two main objectives:
Strong: The fastest rate of growth in the national production in the economy while achieving other macroeconomic goals such as low inflation, full employment and external stability.
While sustainable: Where the rate at which national production can increase steadily in the long run while not depleting the economy’s non-renewable resources; taking into account environmental impacts of increased production and ensuring that living standards of future generations will not be compromised by the current growth in production.
In Singapore, economic growth is measured by Gross Domestic Production (GDP) per annum. GDP represents the total dollar value of all goods and services produced over a specific time period. For Singapore, a strong and sustainable GDP growth rate is projected to be around 3-5% per annum with a stable inflation rate of 1-2%3. Rates in access of this can lead to inflation and a fall in quality of living due to an over usage of input factors.
It is worthwhile, however, to take note that while GDP is the most common method of defining
References: EconomyWatch, “Singapore Exports, Trade and Imports”, 2010, http://www.economywatch.com/world_economy/singapore/export-import.html Trading Economics, “Singapore Exports”, 2014, http://www.tradingeconomics.com/singapore/exports AndyXianWong, “Singapore Inc and Brain Drain”, 2014, https://andyxianwong.wordpress.com/2014/01/11/singapore-inc-and-the-brain-drain/ US Energy Information Administration, “Singapore”, 2013, http://www.eia.gov/countries/cab.cfm?fips=sn Ministry of Finance, “Report on Economics Strategies Committee, 2010, http://app.mof.gov.sg/Portals/0/MOF%20For/Businesses/ESC%20Recommendations/ESC%20Main%20Report.pdf