Singapore or officially known as the Republic of Singapore is an island city-state which situated in the Southeast Asia specifically lies off the southern tip of Malaysia peninsular. The total area of Singapore is 716.1 square kilometres or 270 square miles and it accommodates approximately 5,599,200 citizens and 823,082 of them are consists of Muslims. Muslims in Singapore are about 14% out of the population numbers and are amongst the minority society.
In the context of economy, Singapore is a trade-oriented market economy that basically practices conventional banking system. However, the Islamic banking system has slowly entering the Singapore banking system since the year 2005. The Islamic banking system was not rapidly executed nor accepted because the conventional banking sector has developed well over the period of time. The Monetary Authority of Singapore (MAS) is the responsible entity in helping the progress of Islamic finance in the country. The table provided below is to show some of the comparison between conventional banking system and Islamic banking system in Singapore.
BACKGROUND
Singapore is 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 (14.2% of Gross Domestic Product, GDP) and has the third highest GDP in the world; in terms of Purchasing Power Parity (PPP), of $318.9 billion in 2011.
Singapore initiated its Islamic finance journey at the start of the millennium with the watershed decision to give preferential tax treatment for Islamic finance. The Singapore government, in tabling its 2002 budget, announced fiscal incentives under the Financial Sector Incentive (FSI) scheme after real...
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...ngapore has not been tasted. While in Malaysia, the Central Bank of Malaysia Act 2009 renders the Central Bank of Malaysia’s Shariah Advisory Council as the sole authority relating to Islamic banking and finance in Malaysia. Conversely, due to Singapore’s position as a non-Muslim country, the legislation and regulations touching on Islamic financial instruments are sterilised from religious reference. Singapore also did not have a party that can compliance with the application of Shariah principles in the Islamic banking and finance sector.
Natural advantages that are given in Singapore is due to its strong banking regulatory framework, political ability and high-skilled professional workers. From this factor, Singapore can influence their strength into international financial centre which offers both conventional and Islamic financing products to global investors.
This chapter covers the overview of the country in a short history, banking system, commercial banks and interest rate theory. The chapter provides also the theoretical review of interest rate and profitability.
Singapore as a country has had various transformations throughout its history, however the period 1950 and 1970 was quite critical. Much of these changes had a lot to do with the development of trade and manufacturing. This is without forgetting the financial sector where the intention was to come up with a financial hub that could be used in economic development. Looking at the case of Singapore, we would say that it is a productive economy with a very high market competition. This observation has been further clarified by the Swiss International Institute for Management Development, going with their report that they released in the year 2001 (Chellaraj & Mattoo, 2009). In this study, we intend to evaluate the case of political economy of development in Singapore and examine the tensions between the state and various economic institutions. In additions to examining this institution, we would also like to examine how these variables have contributed towards the attainment of favorable growth rates and economic prosperity.
The political instability probability in Singapore is altogether low. The political and economic risk consultancy (PERC) stated that Singapore revels the lowest political risk in the continent. We are a democratic county. Singaporeans elect representatives to lead the country. Since its independence from the British and Malaysia, Singapore have appreciated political stability. The stability today is seen as peace and one of the best standards of living. Furthermore, Singapore today has become one of the most improved business opportunities.
These include Mandarin (36.3%), English (29.8%), Malay (11.9%) and Tamil (3.2%). Other languages include Hokkien (8.1%), Cantonese (4.1%), Teochew (3.2%), other Indian languages (1.2%), other dialects of Chinese (1.1%), and other (1.1) (“East & Southeast Asia: SINGAPORE,” 2016). Chinese is the predominant ethnic group with seventy-four percent of the population. Malay is the second most dominant group at thirteen percent. Nine percent of the population identifies their ethnicity as Indian, while the remaining three percent classify their ethnicity as “other” (“Country Profile - Singapore,”
Singapore acts as a role of an entrepôt for Southeast Asia due to their strategic location, port infrastructure and highly skilled workforce. Singapore also purchases raw materials from other country and then refine the product into a better product to re-export. The reason for Singapore to do this is because of the lack of human and natural resources.
The modern Islamic Finance industry is young, its timeline begin only a few decades ago. However, islamic finance is involving rapidly and continues to expend to serve a growing population of muslims as well as conventional.
Post-independent Singapore, small, young and prosperous. Ever since the independence of Singapore, 9th August 1965, she has faced very little resistance from the people. This can be seen in the low number of riots/rebellions, protests and demonstrations. Since independence, Singapore has seen 1 riot (1969 racial riot) excluding the Little India riot which occurred last year and a few minor demonstrations and protests. I’m excluding the Little India riot in this essay as I believe that alcohol was the only motivation behind the riot. The more notable demonstrations would be the recent LGBT (Lesbian, Gay, Bisexual and Transgender)
We will find out how Singapore manage to raises it economic development in such rapid growth aftermath of war and separation.
As Singapore’s current replacement in fertility rate is 1.24, the chances of increasing the population growth to a consistent number is slim. Therefore, the only option to keep up with the growing workforce is to accept a larger pool of migrants which Singaporeans have to adapt to. Overall increasing the productivity rate of the country, which helps to bring in more revenue. But the setbacks are that the government may be viewed as not being for its people, but instead, only for the interest of foreign talents entering the country. Overall, it was mostly successful towards benefiting Singapore’s man power and productivity as a whole, as well as, increasing the
As the world has recently passed through the global financial crisis that begun in 2008 in the USA with the banks’ collapsing, analysts are giving different opinions and making new economic hypothesizes about the origin of, as well as the process of different countries escaped from the crisis. Among all these new “theories”, the case of Islamic banks is interesting in terms of its nature and consequences. In my essay, I will try to highlight the basic principles of the Islamic finance, the reasons of the restriction of interest, the most important tools used by Islamic banks in economic activities and brief explanation of them, and finally my view point of the probable future improvement of the Islamic financial system.
Singapore gained its independence after the separation from Malaysia to become a sovereign state due to the different political reasoning and principles between the ruling parties of Singapore and Malaysia. A sovereign state has the ability to go into relations with other sovereign states and practices internal control over the country through laws and rules. Singapore is no different from other sovereign states that would inevitably be dealt with obstacles that seek to undermine the sovereignty of states. Without sovereignty in Singapore, Singapore would never have the opportunity to make decisions, take up roles and beliefs that we currently uphold now. Being remarkably fruitful is deliberately basic for Singapore's sovereignty. Achievement
The study is primarily designed to find out the continuous issue of the banking system in
It is a known fact that the banking industry plays a huge role in today’s society, the industry has grown rapidly of many decades and still growing. The banking sector is that sector of the society that is actually responsible for the handling of financial assets for other sector of the economy, they do this by investing the financial assets in order to create more wealth in the society while regulating all the activities involved in the process. (What is the banking Sector 2015)
In addition, after the 2011 Singapore general election, the government of Singapore has greatly changed its economic approach and it seems to be better for the economy of Singapore so far. On the other hand, measures have also been taken to cool down the property market which has constantly affected inflation rates, also tightened the foreign labour policies that constantly influence the labour market and unfold its impacts onto the Singapore’s economy as it comes back in one round. The unemployment rate in Singapore has been maintaining itself as being one of the lowest numbers in the world. The majority of Singapore’s labour force is well educated and highly skilled. Even primary education is a must for all citizens (Economywatch.com, 2010). In addition, for the year 2010, Singapore had the 8th largest current account balance in the world at US$49.454 billion. To conclude, Singapore has come so far from its sunken economy since independence in 1965 to become a booming and prosperous economy that it is
Banks sector is playing an important role in economies. The banking industry, as the classic and the most influential of financial intermediaries, facilitates economic operations. Financial sector in the worldwide country has been changes over these years by looking the changes of financial structure environment and economic conditions. Thus, banks are a very important point to financial system and play an important role as control and contribute growth to the economic sector.