The Government´s Role in the Success of Singapore

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Yes, I agree that a huge part of Singapore’s economic success has been built on the government’s ability to ensure macroeconomic stability as well as build long-term growth. To ensure macroeconomic stability, fiscal policy, which is the usage of government expenditures and taxes, and monetary policy, which is the changing of interest rates and quantity of money in the economy, and supply-side policies, that look into the strengthening the production capabilities of companies, have to be implemented by the government. To build long-term economic growth, there has to be an increase in real GDP growth which is seen in an increase in 2 sources: aggregate hours and labour productivity. Aggregate hours are the total number of hours worked by employees, which are affected by population growth. But to increase real GDP per person, labour productivity is essential and dependent on 3 factors: physical capital growth, human capital growth and technological advances. The remarkable growth of Singapore from a small fishing village to the bustling cosmopolitan city that it is today is largely due to the efforts of the government. Being one of the eight high-performing Asian economies (HPAEs), Singapore’s astonishing change in GDP per capita from 1960–85 was ranked fifth in the world. This was due to the government’s strategic promotion of export-oriented industrialisation, rapid accumulation of capital and labour, and attracting foreign direct investments (FDI). After the 1973 oil crisis, the Singapore government shifted focus from labour-intensive industries to high-tech manufacturing and high value-added services and after the worldwide recession in 1985, Singapore government restructured into a developed nation, focusing on quality of ... ... middle of paper ... ... of Business and Management, vol. 9, no. 4, pp. 373-388. Gerlach, S. & Gerlach-Kristen, P. 2006, Monetary Policy Regimes and Macroeconomic Outcomes: Hong Kong and Singapore, Rochester. Hilsenrath, J. E. 1999, A Decade of Change --- Time to Ease Up: Singapore has thrived with a government that is both hands-on and business-friendly; But the formula may be wearing thin, New York, N.Y. Khuong, M.V. 2011, "Sources of Singapore's Economic Growth, 1965-2008: Trends, Patterns and Policy Implications", ASEAN Economic Bulletin, vol. 28, no. 3, pp. 315-336. Lam, N.M.K. 2000, "Government intervention in the economy: a comparative analysis of Singapore and Hong Kong", Public Administration & Development, vol. 20, no. 5, pp. 401-418. Wood, J.H. 1992, "Monetary Policy in a Small Open Economy: The Case of Singapore", Economic Review - Federal Reserve Bank of Dallas, , pp. 25.
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