CASE STUDY: Since becoming an independent nation in 1965, Singapore has been on the rise economically. Although it occupies a small geographical area, its busy port has aided Singapore in gaining economic power. The per capita GNP is one of the highest in the world. The major exports include electronics and chemicals, creating profits that allow for the purchase of raw materials that are not native to the country. As a result, Singapore relies heavily on a strategy similar to entrepôt trading, which involves importing of raw materials and refining them into goods to be exported. ​Singapore’s economy is considered to be free market, and is developing at a very rapid pace. A strong educational system develops large, skilled workforce

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CASE STUDY:

Since becoming an independent nation in 1965, Singapore has been on the rise economically. Although it occupies a small geographical area, its busy port has aided Singapore in gaining economic power. The per capita GNP is one of the highest in the world. The major exports include electronics and chemicals, creating profits that allow for the purchase of raw materials that are not native to the country. As a result, Singapore relies heavily on a strategy similar to entrepôt trading, which involves importing of raw materials and refining them into goods to be exported. ​Singapore’s economy is considered to be free market, and is developing at a very rapid pace. A strong educational system develops large, skilled workforce, and the business environment up to this point has been relatively corruption-free. Government intervention is generally kept to a minimum, but the government has undertaken several measures to promote further economic growth. Heavy investment in the diversification of the economy namely the promotion of tourism and funding of the pharmaceutical industry – has served the economy well. For example, the Marina Bay Sands Casino opened in April 2010, attracting many foreign tourists and providing plenty of job opportunities for Singapore citizens. ​Things haven’t always been so easy for Singapore. The country hit an economic slump from 2000 to 2003, due to series of events outside its control. Economic recession in the United States and the European Union had harmful effects on economic growth. The rebound, however, was a complete success, as Singapore posted a 7.5 percent growth in gross domestic product in 2007. The recovery went smoothly due to good economic strategy, a high percentage of skilled workers, and copious foreign investment. The assistance of government-linked corporations was also important in rebounding from the worldwide slump. ​As the busiest trading hub in Southeast Asia, Singapore occupies an enviable position in the world economy. Although this is a position of leverage and power, Singapore is also considered the most business-friendly economy in the world. Other countries’ desire to trade with Singapore is high and shows no signs of dwindling. Along with South Korea, Hong Kong, and Taiwan, Singapore is one of the “Four Asian Tigers,” a title that refers to their economic strength and acumen. ​The number of wealthy residents of the country has risen at a rapid rate as a result of the general economic success. In 2004, the number of Singapore’s U.S. dollar millionaires rose by 22.4 %. The growth has slowed since its peak in 2004, but the number of affluent residents is still on the rise. Some analyst have predicted that Singapore will soon overtake Hong Kong as the country with the highest concentration of millionaires in the world. ​The economic climate of the world is changing, as smaller countries are becoming more powerful financially and closing in on larger countries with greater economic power. Globalization is providing opportunity for countries like Singapore to step to the forefront of the trade market. If Singapore continues to employ the economic strategies it has up to this point, its future financial success is all but guaranteed.

Do you think that the economy of Singapore will be greatly affected by changes in the financial status of traditional economic superpowers? Why or why not? If the economy is affected, will it be positive or negative?

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