Singapore Country Case Report

Introduction

Singapore is a small nation state located at the southern tip of the Malayan Peninsula. It was founded by Sir Stamford Raffles in 1819 as part of the British colonial empire. Due to its strategic location, astride the sea routes from Europe and India to China and Japan, the British developed Singapore as a free port and centre for entrepot trade i.e. goods are imported from one country and exported to another (Hamilton, p. 134). The structure of the economy was then developed as an open economy. The objective of this essay is to discuss Singapore's economy as an open one with the influence of the PAP in it and the extent of the economic development model of Singapore.

The PAP was formed on 21 November 1954 at the Victoria Memorial Hall in Singapore. The founding leadership represented three distinct groups: the social democrats, consisting mostly of English - educated professionals; leaders of public service unions; and pro-communists, representing unions in the private sector and Chinese school teachers (Vasil, p. 19). The PAP now views itself as the sole custodian of the Singapore nation. At first, Singapore followed an inward - looking development, and then it open up the country to foreign investment and multinationals with attractive fiscal incentives. The PAP now has adopted the policy of mixed economy (Islam and Chowdhury, p. 197).

Discussion

Singapore's government assumes itself as an instrument in shaping and managing the economic environment and it underscores the importance of identifying and investing in certain key capabilities (Ohmae, p. 67). The government gradually shifted investment incentives toward more sophisticated, capital - intensive industries (Ohmae, p. 73). Singapore's financial system is very stable one. This is because the government routinely accumulates a budget surplus and has accumulated substantial foreign reserves. Singapore has also an extensive international banking system, low interest rates, no restrictions on the flow of foreign exchange, and a strong currency, which has risen 18% against the U.S. dollar since 1987 (Ohmae, p. 75).

The PAP's involvement in its politics has three trends that stand out that is, a growing authoritarianism in the government, an accelerated process of militarization and a close regimentation of society. At present, the PAP is indistinguishable from the government and the parliament and controls the Army, the Judiciary, the Union Movement and the Police Force (Buchanan, p. 272).

The State manages all areas of the economy, unattractive to private investment, and guarantees such investment through a strict policy of social control and an essential minimum of state welfarism which in many ways is indistinguishable from the political and social discipline needed to ensure an open climate for free enterprise (Buchanan, p. 283).

The technocratic leaders of Singapore are as likely to quote Michael Porter on the competitive advantage of nations and Kenichi Ohmae on the globalization of economies. The government exercises a degree of power rarely seen in democratic countries and uses it in no uncertain terms (Ohmae, p. 77). Singapore has been able to grow so spectacularly in the economic field throughout ...