Macroeconomics Case Study

Singapore: The growth of a small economy

OR

Abstract:
Singapore, an island-state, ranked sixth in the Growth Competitiveness Index(GCI) in the Global Competitiveness Report 2005-2006 by the World Economic Forum (WEF). With a population of 4.3 million, equivalent to a state in the U.S., it was one of the fastest growing economies in Asia. The financial crisis in 1997-98 hit the Asian economies very hard. Before they could recover from it, the 2000-2001, dot.com bust. It impacted Singapore the most as it relied heavily on export to the US, UK and Japan. (It continued its growth despite the environmental obstacles. By 2004, it was one of the fastest growing small economies in terms of the growth of Gross Domestic Product (GDP).

In 2005, despite being ranked fifth in the Business Competitiveness by the World Economic Forum it faced challenges. China and India were becoming major markets and consequently threat to Singapore’s export industries.

The case describes the strategies and initiatives taken by Singapore since its independence. Singapore leveraged on its geographical competitive advantage by becoming a global entrope’ hub, but with emergence of competition in this industry, it adopted a twin-tier industry structure, pushing manufacturing as much as services industries. Thus, it diversified its dependence to industries like tourism and electronics.

Pedagogical Objectives:

• To understand the economical development of a small economy like Singapore
• To discuss the competitive advantages of the nation (porter’s National advantage theory)
• To discuss the initiatives taken by Singapore for becoming the fastest growing small economy 2006
• To debate the threats posed to its economical development with emergence of Asian countries as powerful economies.

Keywords : Macroeconomics Case Study, Nation's growth strategy, Peripheral Vision, Diversification in related Industries, Economic development, Business environment, Competitive Advantage, Singapore, Asian tigers