Private Investments in Human Capital Growth in Asian Countries

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This essay will be explaining that why macroeconomics stability is one of the key success factor that contributes to the tremendous economic growth in the last forty years of development in asian countries like singapore, hong kong and south korea. The objective of a government economic policy is to achieve stability. A volatile business cycle is not ideal to the economy as the rapid growth of an economy with high demand and inflation will lead to a recession as the long term inflationary growth will not be sustainable. Macroeconomics stability ensures that the country minimizes its exposure to external shock and volatility against the global market which will in the end leading to sustainable economic growth. Some of the safety buffers like accumulation of national reserve and minimize the volatility of foreign exchange flow to ensure sufficient supply of credit in respect to the business cycle. We will be looking at Singapore and what have the government has done in order to achieve macroeconomic stability. In a country like Singapore which has no natural resources, it depend greatly on its sole resource which is the human capital. Private investments and human capital growth are key factors to the growth of economy. Chor Boon, G and Gopinathan. S (2006) explains that after the war, baby boom in the early 1950s together with the free immigration policy had resulted in an average annual population growth rate of 4.4 per cent between 1947 and 1957, and as the unemployment rate is standing at 5 per cent, rising to 9.2 per cent high in 1966. Singapore Government reacted by setting the improvement employment rate as a priority, the government sees a need to equip singaporean with technical skills as well as being literacy t... ... middle of paper ... ...onomic growth. Singapore wealth distribution improve and inequality declines. Singapore come up with the CPF policy to ensure that the citizen have savings Singapore place importance on meeting the housing needs of the citizen and to make houses affordable hence the government implemented mass public housing programs. Government link company like singtel, st engineering plays a part in the sustainability of the economy whose majority of shares is own through the sovereign wealth fund Temasek holdings. Banks are privately owned in Singapore and they have control over their lending policy which will not drive certain industry into bankruptcy. Interest rate affects the consumer spending and the economic growth, when the rates is low, banks can lend money to the people which in return gives higher spending power to the consumer at a low cost. Fiscal policy
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