Untitled VIETNAM GENERAL CONFEDERATION OF LABOUR TON DUC THANG UNIVERSITY FACULTY OF BUSSINESS ADMINISTRATION MACROECONOMICS REPORT SINGAPORE THE SURGE ASIAN OF DRAGON Students Hoan Song An 720I0433 V[.]
VIETNAM GENERAL CONFEDERATION OF LABOUR TON DUC THANG UNIVERSITY FACULTY OF BUSSINESS ADMINISTRATION MACROECONOMICS REPORT SINGAPORE - THE SURGE OF ASIAN DRAGON Students: Vo Hoan Song An – 720I0433 Nguyen Truc Mi - 720I0177 Le Hoai Khang - 720I0159 Nguyen Thi Huyen Tran - 720I0255 Nguyen Vo Kieu Mi - B20I0136 Nguyen Chanh Vinh Thien - 219K0025 Lecturer : Mr Pham Van Quynh Group: – Shift: HO CHI MINH CITY, DEC 2022 0 EVALUTION OF MEMBERS NO NAME STUDENT ID EVALUATION PERFORMANCE Vo Hoan Song An 720I0433 100% Nguyen Truc Mi 720I0177 100% Le Hoai Khang 720I0159 100% Nguyen Thi Huyen Tran 720I0255 100% Nguyen Vo Kieu Mi B20I0136 100% Nguyen Chanh Vinh Thien 219K0025 100% 0 NOTE TABLE OF CONTENTS Contents Introduction 1.An overview of Singapore and the situation after independence 1.1 About Singapore 1.2 Politics 1.3 Population 1.4 Singapore after the independence period before 2000 Comparison of Singapore’s after and before development status 2.1 GDP, GNP 2.1.1 GNP 2.1.2 GDP 2.2 Unemployment rate 10 2.3 Inflation 11 2.4 Education 11 2.5 Housing status 12 2.6 Import and export 13 2.7 Interest rates 14 Foundations for the development of Sing and related policies 16 3.1 The determinants of Singapore's success 16 3.2 Effective Government Policy: 16 4.Economic growth and public policy 18 4.1 Savings and investment 18 4.2 Foreign Investment 18 4.3 Education 19 4.4 Thương mại tự 19 Fiscal policy and monetary policy 20 5.1 Fiscal Policy 20 5.1.1 Ensure Fiscal Sustainability 20 5.1.2 Support Growth 21 0 Healthy and sustainable fiscal policies provide macroeconomic stability and favorable conditions for growth In addition, it plays an important role in enhancing Singapore's long-term growth potential 21 Build capacity and deliver inclusive growth 21 Working in partnership: Singapore's financial policy seeks to encourage collective responsibility at all levels of society It aims to support, facilitate and amplify the efforts, ideas and initiatives of the business sector and citizens, to build a better Singapore together 21 5.1.3 Promote Equity 21 5.2 Monetary Policy 22 Policy on post-epidemic civil assistance 23 Lessons learned for Viet Nam 24 Reference: 24 0 COMMENTARY OF LECTURER - 0 Introduction Singapore used to be a poor country, and without many resources; almost all raw materials had to be imported from another countries, there was only a little coal, lead, lava, clay, and no fresh water; arable land is narrow, mainly for growing rubber, coconuts, vegetables, and fruit trees, lead to agriculture is not developed, and the annual ingredients have been imported to meet domestic demand Singapore not have a strong industrial background Now there, Singapore become the pride of Asia, which leading in the production of electronic computer drives and semiconductors and refining centres and transit in Asia Singapore is also widely recognized as a leader in the transition to a knowledge-based economy The commencement of Singapore may not be as good as other countries, but Singapore has known to taking advantage of all its advantages to come up with appropriate policies and plans to gradually develop the country The decisions of Singapore's Government have brought a developed country that always the dreams of other countries That is also the reason why my group chose this topic The desire that can be able to learn from valuable experiences and contribute to the development of Vietnam, "Singapore: The Surge of an Asian Dragon“ is a best choice for us to learn and research 1.An overview of Singapore and the situation after independence 1.1 About Singapore Singapore is an undervalued country in terms of natural resources, thus the majority of the elements including commodities must be imported from other countries Singapore, on the other hand, has a favorable geographical location – where the world’s maritime trade passes through and has many good links with industrialized nations Singapore is presently one of the world’s major financial centers in 2022 (GFCI) 1.2 Politics Singapore is a parliamentary republic, with a unicameral Parliamentary government under the Westminster system representing constituencies Executive power rests with the Cabinet of Singapore, led by the Prime Minister, and to a much lesser extent the President The president is elected by popular vote, and has veto power over a specific set of executive decisions, such as the use of the national reserve and the appointment of judges, but the role is largely Ritual The Parliament of Singapore serves as the legislative branch of the government 1.3 Population The current population of Singapore is 5,964,077 people as of December 8, 2022 according to the latest figures from the United Nations Singapore's population currently accounts for 0.07% of the world's population Singapore is ranked 114th in 0 the world in the ranking of the population of countries and territories The population density of Singapore is 8,520 people/km2 1.4 Singapore after the independence period before 2000 Singapore does not have an industrial background, and agriculture is not developed Singapore has encountered several challenges since its independence: ● Although densely populated, the economy is shaky Due to a lack of capital, Singapore’s economy is currently heavily reliant on foreign capital ● There is a scarcity of land and natural resources ● Politics is volatile There are several tensions between various races ● The unemployment rate is skyrocketing ● Housing shortage Singapore's per capita income was barely $500 in 1965, the average unemployment rate was roughly 14%, and half of the population was illiterate The results demonstrate that Singapore has had numerous challenges in developing and implementing strategies in poverty because of a lack of financial resources and a plethora of issues to address In general, Singapore's economy is focused mostly on commerce and services; nevertheless, the cash gained from these two activities is undoubtedly insufficient to manage all of the issues at the time Comparison of Singapore’s after and before development status Although it was difficult to solve domestic problems and find ways to raise capital after 30 years, Singapore has gradually changed thanks to Prime Minister Ly Quang Dieu's policy and vision One of Singapore's bright spots is that, despite being a Third World country (other countries were not actively associated with either side of the Cold War), it has one of the world's most developed economies and an extremely extensive market economy To clearly see Singapore's economic accomplishments, we shall rely on data and development analyses As the period 2008-2018 is considered a good development period for Singapore, the information will be based on 2018 and more recent years will be analyzed if necessary 0 2.1 GDP, GNP 2.1.1 GNP Figure GNP 1995-2005 Figure GNP 2008-2018 The Gross National Product (GNP) is the total value of final products and services generated by people in a particular period (usually one year) Singapore's GDP reached more than $1 billion in 1965 We can plainly observe from the data that Singapore's GNP totaled more than 80 billion dollars in 1995 (30 years after independence) Singapore's GNP was extraordinarily high from 2008 to 2018, reaching a peak of 319,55 in 2018 2.1.2 GDP Singapore's GDP per capita from 1960 to 2021 0 Domestic GDP is the total revenue earned domestically, including money gained locally by foreigners, but excluding income earned overseas by its people • Nominal GDP is measured using current prices, nominal GDP excluding inflation • Real GDP is measured using a certain year's prices as the base, real GDP adjusted for inflation Real GDP of Singapore from 2007 to 2016 at 2010 prices Singapore's nominal GDP from 2007 to 2016 Singapore's GDP was over 974 million dollars in 1965, and individual GDP was above 500 dollars According to the statistics we have, Singapore's GDP per capita in 1995 (30 years after independence) was more than $24,000, and the overall Singapore GDP was more than 87 million dollars Singapore's real GDP and GDP per capita increased from 2008 to 2018, reaching the highest level ever in 2018 0 2.2 Unemployment rate Singapore's unemployment rate in the period 2007 – 2016 The unemployment rate is the percentage of persons who are out of work (number of employees and people who were out of work) According to the statistics, Singapore's unemployment rate in 1991 was 2.18% The unemployment rate has grown to 3.64% from 2008-2018 In general, Singapore has improved unemployment Although Singapore is now developed, this rate is still high, some reasons can be mentioned are: ● Manufacturing, construction, and service industries are all experiencing stagnation ● The political and economic condition, as well as epidemics and despair ● A decline in total workers, a large number of laid-off workers, and a decrease in recruits ● The demand for work outnumbers the supply ● Local labor force growth slows as a result of structural change, coinciding with a cyclical recession ● Inappropriate occupations include job searchers who lack the necessary abilities to obtain the positions they desire or employment opportunities that are not appealing to employees ● Small populations and fast aging societies are other key factors contributing to Singapore's high jobless rate 0 ● Small populations and fast aging societies are other key factors contributing to Singapore's high jobless rate 2.3 Inflation Singapore's inflation rate for the period 1961 – 2021 The inflation rate is the economic growth rate It depicts the rate of inflation in the economy According to the statistics, Singapore's inflation rate in 1965 was 0.18% Inflation climbed to 0.44% from 2008-2018 In general, the inflation rate in 2018 is fairly high as compared to 1965, yet Singapore's economic progress is not a high number 2.4 Education 0 Literacy rate % 98 97 95.86 96.19 96.37 96.55 96.83 97.05 97.2 97.34 96.72 2014 2015 2016 2017 2018 96 95 94 93 92.55 92 91 90 2000 2010 2011 2012 2013 Literacy rate Education in Singapore between2000 and 2018 During the first several years following independence, the illiteracy rate among Singaporeans was extremely high, with more than half of the population uneducated Following data, it is expected that 96.81% of Singapore's adult population can read and write by 2017 2.5 Housing status In the early years of independence, Singapore experienced a severe housing shortage Because of the tremendous growth in immigration, the majority of Singaporeans now live in overcrowded, slum-dwelling dwellings, with just 9% of Singaporeans living in Government-supported housing For the time being, Singapore has handled the housing crisis for people with the formation of the Social Homes Development Agency (HDB), which is tasked with providing affordable housing for the island's residents 0 2.6 Import and export Singapore's exports in the period 1960 - 2021 Billions of USD $604.37 $700.00 $568.00 $580.49 $600.01 $665.75 $549.43 $600.00 $500.00 $443.36 $300.00 $556.93 $370.53 $400.00 $525.35 $588.22 $474.82 $491.02 $509.01 $528.92$530.57 $465.35 $497.59 $441.77 $411.72 $403.36 $324.91 $200.00 $100.00 $0.00 2008 2009 2010 2011 2012 2013 Export 2014 2015 Import Singapore's exports and imports from 2008 to 2018 0 2016 2017 2018 % of GDP 250.00 228.99 190.84 200.00 198.00 203.33 196.72 191.95 195.08 178.38 171.40 164.77 208.33 150.00 167.35 171.69 175.77 172.49 171.96 168.51 151.09 100.00 138.56 144.99 176.59 147.73 50.00 0.00 2008 2009 2010 2011 2012 2013 Export 2014 2015 2016 2017 2018 Import Singapore's exports and imports from 2008 to 2018 Using the statistics, we can observe that imports and exports in Singapore were not very satisfactory in the first years after independence Nonetheless, despite the pandemic's significant impact on Singapore's economy, imports and exports in Singapore hit an all-time high in 2021 Recent statistics in 2022 show that Singapore's import and export turnover to the world in August and the first months of 2022 continues to maintain a high momentum compared to the same period in 2021 Despite the situation The world and the region continue to fluctuate as the supply chain is still interrupted, world political instability, especially the wars between Russia and Ukraine, the economic sanctions of the US and the West targeting Russia and China However, Singapore's import-export turnover is not only less affected but also continuously increased in nearly all three quarters of 2022 2.7 Interest rates 0 Singapore's bank interest rates in the period 2012 – 2021 The above data shows that until 2021 the real interest rate in Singapore has reached the lowest rate of 1.17% while before that in 2020 this rate increased to 8.47% In theory we have: The Fed raises interest rates to slow the amount of money circulating in the economy and reduce aggregate demand With higher interest rates, there will be lower demand for goods and services, and the prices of those goods and services will fall 2.8 Exchange rate Exchange rate % 1.50 1.45 1.45 1.41 1.40 1.36 1.37 1.38 2015 2016 1.38 1.35 1.35 1.30 1.25 1.25 1.27 1.25 1.26 1.20 1.15 2008 2009 2010 2011 2012 2013 2014 Exchange rate (SGD/USD) Singapore's exchange rate in the period 2008 - 2018 0 2017 2018 The exchange rate has emerged as an effective anti-inflation tool of the Singapore economy Over the past twenty years since the exchange rate framework was applied, domestic inflation has been relatively low, averaging 1.9% per year from 1981 to 2010 Due to long-term record low inflation, the period Hopes for price stability in Singapore have become more entrenched over the years An existing exchange rate system also helps to mitigate the adverse impact of short-term fluctuations on the real economy, while ensuring that the exchange rate is in line with economic conditions The success of the system is attributed to Singapore's strong underlying economy, which includes prudent fiscal policy, flexible products and market factors, a sound financial system, and a domestic corporate sector strong Foundations for the development of Sing and related policies 3.1 The determinants of Singapore's success One of the economic concepts said, "Sometimes when the government can enhance market results." This is a broad premise; each country will have a distinctive amount of involvement and therapy based on its own circumstances Singapore, despite its constrained circumstances, relies heavily on sound judgments and government policies to achieve its current status 3.2 Effective Government Policy: Singapore has prepared policies of low inflation, competitive real exchange rate, positive real interest rate, stable fiscal policy, and balance of payments always at a safe level from the start in order to sustain both high growth status and stimulate long-term investment - The government is interested in the following areas: ● Setting a high minimum salary, attracting investment capital to develop additional work areas, and expanding production activities to alleviate unemployment are all ways to regulate the labor market ● Encourage learning: Create a system of education and skill training for workers in order to increase the quality of domestic human resources ● Increasing savings by using smart terms of space, water, and human gray matter -Furthermore, it is hard to overlook certain additional useful strategies, such as ● Encouraging investment based on effective tax policies: Singapore is one of the world's "tax havens," having implemented a competitive tax incentive scheme for international investors Effective tax policy encourages resources to be reinvested in Singapore's economy, attracting a large number of foreign 0 corporations and companies to the city-state for business For example, in the mid-1970s, two of the world's oil giants, Shell and Essco, built a refinery here, making Singapore the third largest refinery in the world Multinational firms will bring with them both their distribution networks and their markets, so open policies to encourage foreign investment are critical, and when they produce in Singapore and sell overseas, they will help Singapore open the door to the rest of the world ● Human capital development has a goal:To gain high-quality human resources, Singapore's government has allocated a massive budget to supporting the education system, particularly post-graduate education For ten years, the government provides free and obligatory education (ages to 16) All high school graduates are eligible to attend vocational or university, where they can study in both their mother tongue and English The strategy of human capital development based on the state's considerable investment in the education system is based on two main policies for postgraduate studies: ✔ Selection for education, particularly for college, is competency-based and very competitive, with the government covering the whole cost of instruction for outstanding individuals ✔ The government incorporates education and training system development into industrialization strategies, including the entry of human resources into high-tech production sectors and international multinational enterprises This is viewed as a key approach for Western nations to learn and transfer technology to Singapore's human capital ✔ The government's employment policy aims to generate as many potential jobs as possible, especially given the rural underemployment rate The government implements key policies to alleviate the pain caused by a lack of labor during the industrialization process and the expansion of many services to provide jobs for low-skilled workers; establishing many top priorities to create conditions for talents to bring their best to serve their homeland (salary policy, social protection ), establishing two human resource development committees to attract scientific human resources back to the country to attract talented people ● Investing in public works and efficient infrastructure:The development of modern and efficient facilities is viewed as a critical basis for Singapore's economic success Seaports, airports, postal and telecommunications systems, roadways, and other utilities are examples of infrastructure Singapore's Changi Airport, which has become the most significant and modern transshipment hub in Asia Pacific, is a notable illustration of this policy's effectiveness 0 ● Investing in developing technological knowledge: Singapore has recruited foreign firms and implemented enticing support packages Since the first National Technology Plan in 1991, Singapore has invested in R&D in sophisticated manufacturing and engineering technologies in order to develop a knowledge-based, innovation-oriented economy Singapore's research and development strategy was broadened to Research, Innovation, and Enterprise in 2010 (RIE) Singapore's strong technical capability has also enticed and engaged multinational corporations (MNCs) to create business labs, R&D centers, and high-value-added manufacturing operations in the city-state This has resulted in immediate advantages such as good jobs for Singaporeans as well as economic benefits such as technology transfer As a consequence, Singapore has effectively applied the 4.0 industrial revolution to the manufacturing sector through the stages of the RIE Plan Combining the implementation of measures to attract financial resources in a diversified manner: Singapore has originally established a larger international financial reserve, providing incentives to pursue development projects in the following stage Singapore effectively manages and distributes financial resources, providing a stable foundation for the country's industrialisation 4.Economic growth and public policy 4.1 Savings and investment In addition to investment in economic infrastructure and industry growth, the Singapore government has made full use of all resources, from people's savings to help, setting the path of development based mostly on the foreign private sector and foreign direct investments Singapore primarily gathered savings through mandated Central Provident Fund (CPF) activities and achieved high saving and investment before to 2000 In addition to the savings policy, the Singapore government uses many other mobilizing sources to create more capital and budget, use taxation system as a source of long-term economic growth through the development of strong socio-economic facilities, and cut public costs to improve the economy of economic and educational sectors 4.2 Foreign Investment Singapore bases its development aspirations on its capacity to acquire large amounts of wealth and resources Attracting foreign investment is one of the important ways to mobilize capital Singapore's pursuit of a free trade policy, no or reduced taxation, and a low wage policy has given it additional benefits in attracting international investment 0 Singapore has expanded the channels of control and capital provision through financial regulation; allocating investment capital to key industries such as manufacturing, heavy industry (shipbuilding, oil refining), shipping (MNCs); expanding investment capital to grow facilities, machinery, and equipment such as public housing, industrial parks, warehouses, factories, roads, ports, water, road, and air transport works 4.3 Education After recognizing the importance of human resources and investment capital for national growth, the Singapore government began to alter economic development The government strives to create equality, job opportunities for all Singaporeans, vocational guidance, training, encouraging and supporting businesses to provide regular training programs or send employees abroad to study, and it also encourages individuals to contribute to the overall development of the ethnic community through traditional cultural education and national unity The government initially subsidizes education and training, and then encourages investment in modernizing and improving the quality of these activities in order to improve the quality of human resources in this country Singapore today possesses the most sophisticated education and training system in the world 4.4 Thương mại tự Singapore has pursued an extroverted strategy, one that enhances the country's integration with the rest of the globe Singapore negotiated many free trade agreements in the early years after 2000, including with New Zealand, Japan, Australia, the United States, Switzerland, Norway, and South Korea Singapore has consistently supported for the development of global and regional free trade, and numerous variables have influenced bilateral trade policy Singapore's free trade agreements serve both economic and strategic goals ● Economically, FTAs can provide some stability for Singaporean entrepreneurs and investors by eliminating trade and investment obstacles and opening up new prospects for the Singapore business community FTAs can the following: Tariff reductions will save exporters money while also ensuring access to other nations' service markets All other sorts of impediments to selling products and services in the Singapore market may be decreased or abolished Within the WTO framework, FTAs can foster regional market liberalization and integration, as well as worldwide free trade 0 ● Singapore's FTAs also have a strategic component Establishing FTAs with other nations throughout the world can assist governments in the area retain their presence This is particularly critical for a tiny country like Singapore Singapore has signed agreements that help develop their economy, such as: • ✓ ✓ • ✓ ✓ Bilateral FTAs China-Singapore Free Trade Agreement (CSFTA) European Union-Singapore Free Trade Agreement (EUSFTA) Regional FTAs (Thương mại tự khu vực) ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) ASEAN-China Free Trade Area (ACFTA) Fiscal policy and monetary policy 5.1 Fiscal Policy Singapore's fiscal policies have helped to manage the country's improvement over the years We aim to facilitate macroeconomic stability, support economic growth and promote social fairness They achieve this by maintaining a balanced policy, investing for the future, and ensuring a fair and progressive financial system Their fiscal policies are designed to support the following essential goals: 5.1.1 Ensure Fiscal Sustainability Sustainability - Maintaining a sound and sustainable financial system enables Singapore to execute its long-term strategies, run a balanced budget over the long term, and at the same time ensure adequate resources to meet the essentials of society • Public spending focused on public goods and infrastructure helps our people and businesses grow and prosper, investing heavily in skills, education, infrastructuring to develop people, laying the foundation for long-term economic growth, and ensuring stable spending on security and defense to protect their way of life • Planning for the long term: Fiscal policy in Singapore is characterized by a strong long-term orientation, all of which is planned to prepare for long-term challenges such as aging and climate change Singapore is planning to cater to several new spending priorities going forward, including healthcare and the elderly, early childhood education and SkillsFuture, strengthening the social security system, and renewing the infrastructure city infrastructure and protect 0 ... of executive decisions, such as the use of the national reserve and the appointment of judges, but the role is largely Ritual The Parliament of Singapore serves as the legislative branch of the. .. the development of Vietnam, "Singapore: The Surge of an Asian Dragon? ?? is a best choice for us to learn and research 1.An overview of Singapore and the situation after independence 1.1 About Singapore. .. population Singapore is ranked 114th in 0 the world in the ranking of the population of countries and territories The population density of Singapore is 8,520 people/km2 1.4 Singapore after the independence