Discuss : ‘Economic growth, sustainable development and migration coexist’

Global Economic Issues

 

1. Taking reference to the country Singapore, critically discuss the following view: ‘Economic growth, sustainable development and migration coexist’

Introduction:

The global economy is driven by global interaction and technological advances to build a strong economic growth. The World’s GDP was projected to expand by 75% between the periods of 1995-2020. The achievement comes with increased pressures on social and environmental resources (Dicken, 2011, p. 101). Governments that pursue sustainable development strategies face major challenges of how best to balance opportunities and challenges to separate economic growth from environmental pressures. Climate changes have been the most challenging issue in attaining sustainable economic growth. This paper provides an overview of economic parameters: Economic growth, sustainable development and Migration coexistence particularly in Singapore.

Overview of Singapore:

Singapore is a small state found in the Southeast Asia. It is estimated to have an area of about 671 km per square with a population of about 6 million people (Bercuson, 2005, p. 23). The population constitutes of the citizens, permanent residences and foreigners living and working in the state. Singapore is a busy country which receives tourists throughout the year. The composition of ethnic groups in Singapore reflects the role played by immigration policies. Despite its location in the Malay Archipelago, Chinese constitutes of 77% of the population, 14% are the Malays, 7% are Indians while 1% comprises other ethnic groups (Ghesquiere, 2006, p. 72).

With the rapid economic growth and negative growth of the labor force within the country, Singapore accepted immigrates to offer labor. Due to the acceptances of foreigners, the country’s economy grew from -10% in 1994 to 9% in 1995 (Huff, 1997, p. 256).The Per capita GNP was estimated to be US $ 24,718 in 1995 which gives reflection of positive growth. The rate of unemployment was 2.7% .The the composition of male and female in the labor force was 78.4% and 50.0% respectively (Cheung, 1991, p. 50).

In spite of the developments, Singapore is currently faced with low economic growth resulting from social implications and diminishing natural resources and pollution. The country’ fertility rates over the past five years stood between 1.7percent-1.8 percent (Held, 2009, p. 6). Ageing population has slowed the state’s economic development hence resulting to a major concern. Singapore has no option but to focus on effective ways to efficiently manage resource consumption and its reuse. With the limited geography, the state is undertaking integrated, long-term and robust land use mechanisms. Such methods will strategically promote economic growth through sustainable development (Dicken, 2011 , p. 33).

Economic overview:

Singapore has been rated to been as the richest country in the world using the GDP per capita parameter. The country is among the largest financial centers in the world and the second best performing in the Asian region after Hong Kong. Singapore is ranked second out of forty two countries in the Pacific –Asian region (Bercuson, 2005, p. 45). According to the data obtain from the ministry of industry and trade, Singapore had an average GDP of $348.7 billion in 2014.The Per capita income stood at $ 64,584. The economy grew by 4.1 % in 2014 compared to 3.7% in 2013 which is an increase of 0.4%. The construction industries had a growth of 4.7% while the service offering industry grew by 5.5%. According to the data by Economic Survey of Singapore the rate of unemployment was 3.1% in 2014 where else inflation was at the lowest point of 2.4% (Jhingan, 2005, p. 76).

The economic success can be related to inflowing foreign Direct Investment .The economy is dependent on the exports of chemical, electronics and entrepot trade. Which means the City-state imports raw materials and then refines them for re-export. The vital industries in the economy are oil refining and water fabrication (Yew, 2000, p. 401). The nation benefits from high level of economic freedom. The sustainability efforts focused at building a world-class investment center has enabled the state to gain both economic and financial freedom in the global market. With high level of education adds value to economic reliance and dynamism which reinforces the country’s innovative capacity (Soubbtina, 2004, p. 177). The nation has a low level of corruption and effective economic policies. The government focuses on reducing its involvement in the key economic sectors to advance economic freedom. In spite of all this achievements, Singapore has suffered several economic challenges that need to be addressed by the stakeholders.

Singapore’s economic challenges:

• The ultimate goal by the government is to find a long term solution to the uprising economic challenges. The government focuses at provision of good jobs and salaries to the educated workforce reduce the reliance of foreign workers and reducing the income gap which has widened in the past years. Some of the economic challenges facing Singapore are:
• Increasing number of university graduates constituting of the professionals, executives, managers and technicians according to the White Paper population on population. First, can the economy sustain this group? Will it create good jobs for them? These are the government worries (Cheung, 1991, p. 333). Secondly, will there be enough construction workers and cleaners to take up jobs when all the people gain university education considering that the fertility rate is declining. For a long time, professional jobs have been filled with foreigners who earn low incomes. This has contributed to income inequality and job depression. Although, cheap incomes have contributed to economic sustainability with the increase of education levels; this method is now unsustainable (Schein, 1996, p. 212).
• Inflation is another threat to economic development. Like another affluent countries, Singapore has an ageing population and lifespan lengthening while the birth rates are declining. The money saved by the retirees’ will be consumed by inflation (Bercuson, 2005, p. 7). With the increasing inflation, extra cash will have to be set aside to pay the retirees.
• Increase of taxes is anticipated according to the economists. This simply means more money shall be spent on taxes rather than investment. The situation will worsen if salaries do not increase. As the economy matures, Singapore will face slower economic growth and a potential of higher level of inflation than the present situation (Dicken, 2011 , p. 224).
• Emigration policy: the current policy of reducing the number of foreign workers will hurt its economic growth and lower competitiveness in the global market. With the ageing population and slow tight laws on labor outsourcing won’t compensate fully. This will lead to gradual increase of inflation. With the economic growth of China in the Asian region, Singapore is likely to face economic challenges (Cheung, 1991, p. 54). The trend might result into financial market volatility risks.
• Slow economic restricting: Singapore is refocusing its efforts on sustainable growth. However, the productivity improvement initiative will take time to materialize. There is a possibility that the mechanism meet never the declining growth in the labor force according to the International Monetary Fund (IMF) (Mitchie, 2011, p. 12).
• Environmental pollution and lack of natural resources: Singapore emits a lot of carbon dioxide in the atmosphere. The pollution mainly comes from the industrial activities. Such emission affects the environment resulting to spending extra money on environmental rehabilitation (Heng, 2008, p. 45). Secondly, Singapore lacks natural resources and is forced to import from other countries. With the diminishing global resources, the country is expected to spend expensively on such resources which reduce productivity level.

Economic strategies and perspectives in Singapore:

The Singaporean government wishes to implement the following strategies to curb its economic challenges:

• The government is transforming the economy to better-quality driven based on productivity and skills rather than continuously increasing workers. The policy implemented in 2010 to 2019 seeks to achieve a 2-3% productivity improvement from the labor force annually (Jhingan, 2005, p. 40). By increasing workplace efficiency, an employee is required to producing 2-3% more than the previous year’s production. The restructure drive would see the economy grow between 3-5% annually (Ghesquiere, 2006, p. 181).
• To solve the inflation crisis affecting the retirees’ savings, the government increased their contributions. This is to ensure that the current generations cater for their needs rather than burdening incoming generations.
• In 1979, the government implemented a policy that allowed aggressive salary increment to the employees for the following 3 years: Increase productivity through increasing wages. The problem loomed where the salaries were increasing while productivity increased at a lower rates forcing some businesses to shut down. To mitigate the problem, the reduced employers’ contribution rates to Central Provident Fund (CPF).stopped wages increment for two years and reformed the wage structure (Smith, 2003, p. 301). The economy slowly grew again in 1986.
• Inclusive growth: strong macro-economic fundamentals, relying on global and market exchange for productivity are best ways to secure sustainable growth. Pro-trade policies have been employed by the government to allocate scarce resources to maximize economic welfare of the state. The government invested in education, healthcare and housing to support economic activities (Youngs, 1996, p. 222).
• The government targets at minimizing inequality by creating quality jobs, providing salaries sustainable to the economy and inveting in the right jobs skills. This has been achieved by restructuring the education system in line with the industrial and economic development (Bercuson, 2005, p. 101).
• Singapore has been ranked high in the top Ten in the world for addressing the environmental issues according to the Environmental Performances Index (EPI).The country is known as a “city in a garden” to investors who competing to invest in it (Ives, 2014, p. 223). As a result, the state enjoys sustainable economic growth through taking care of the environment.

Sustainable development and economic issues:

With the increased globalization and changing technological innovativeness, Singapore should have restructured its sustainable development strategies. Sustainable development helps the governments to balance between economical opportunities and challenges (Soubbtina, 2004, p. 51). Environmental problems and climate changes are key issues that need to be addressed in sustainable development.

The government has been urged by economists to implement an effective framework which is integrated across social, economic and environmental spheres. There is also the need by all stakeholders to participate in co-ordination, implementation between the government, other states and international organs (Steger, 2013, p. 20). The sustainable plan should be developed in transparent, co-operate and efficient manner. A good relationship between the Singaporean government and global market players is legitimate in enhancing sustainable economic development (Porter, 1986, p. 76).

To integrate social, economic and environmental spheres, an appropriate conditional framework and implantation tools should be developed. The principal objective of framework development is to correct the market system, eliminate distortionary subsidies, manage resources, introduce green tax reforms and create a pollution controlled market. Such a framework will achieve sustainable development goal ii implanted in a strong and long-term perspective (Martin, 2011, p. 341).

The government should also focus in the technology and innovation to sustain economic development. Before investing in the technological field, the dynamics of technology-innovation led growth should be understood and internalized (Dicken, 2011, p. 61). The Singaporean government has adopted innovative corporate and public policies aimed at diffusing safer technologies to enhance environmental performance.

Lastly, with the stimulated competition in the global market, only countries with effective sustainable development can survive. Consumers are demand for quality product that are environmental friendly and at a lower price (Held, 2009, p. 48). Although, Singapore remains competitive in the global market, there is still need for strengthening sustaining practices and policies at the international level.

Migration co-exists and economic issues in Singapore:

The immigrants, emigrants and foreign workers have significantly contributed to the economic development in Singapore. These group provided labor at a lower wages than the citizens. In the early 1900s, Singapore had opened its borders for immigrants from Malaysia, China and India. In 1965 after the political rift between Malaysia and Singapore, the later introduced policies to restrict immigrant inflow with an aim of controlling unemployment and population growth (Pang, 2002, p. 170). Most of the foreigners were granted permanent residences and become citizens. Singapore had a policy of maximizing economic benefits from the immigrants while minimizing economic and social costs.

For many years the country had outsourced professional, entrepreneurs and skilled workers. They were encouraged to accept citizenship and permanent residence. The government had acknowledged the contributions of professionals to its economic development. With cultural diversity, the Singaporean could learn new production and innovative methods from the foreigners. Secondly, the outsourced labor contributed to the production of goods and services that satisfied the global consumers (Ghesquiere, 2006, p. 122). The migration co-exist has contributed ton major economic growth and development in Singapore.

Conclusion:

The interaction of Economic growth, Sustainable development and Migration coexist in Singapore have contributed to the global economic achievement. The study has revealed that the three parameters are related as way of becoming an economic free state. Singapore has implemented strategic policies to curb its economic challenges experienced in the past four decades.

While acknowledging it’s ageing pollution, the government has turned to sustainable development plans aimed at maintaining the economic growth over a long period. The government further invested in innovative technology to curb environmental problems, global economic issues and raising production costs (Ives, 2014, p. 324). There is need for continuous review of the sustainable development policies to remain competitive in the global market.

1. 500 words reflection on how the feedback from the group work has helped
   you to prepare this essay. (General reflection of the work process of Coursework 1 within a group consisting of 2 people).

The paper has been successful due effective cooperation between the group members. The study has been based on the previous group work on Economic Globalization and National Governance. The two papers are correlated as their both address Global economic issues and the roles played by respective governments both in the developed and developing countries. The paper; Economic Globalization and National Governance, acknowledged in spite of globalization reinforcing economic development, it contributes to undermining the legitimacy of Federal governments. The same issue has risen in the current where the Singaporean government has been forced to forego its supremacy governance to allow economic and global integration.

Many governments have criticized globalization on the basis of interfering with their territorial power. Globalization has been viewed to end legitimate power, limited supraterritorial constituencies’ power and blocking democracy. The developing countries have been reduced to price takers in the market since they lack the negotiation power in global the market (Porter, 1986, p. 96). Secondly, such nations are forced to adhere to economic policies and regulations imposed by international financial and economic organs like World Bank and IMF. In spite of the challenges, globalization policies remain the pillar to economic prosperity in this Innovative technological era.

Proper Global integration policies boast economic integration across nations and international borders. As a result of globalization, national powers and policies have been strengthened through remodeling and reshaping according to an economist Stephen Kraser (Steger, 2013, p. 86). Globalization has made the world to look like a village; thanks to technological development.

The level of competition have increased as global consumers have variety of choices to make as far as purchasing is concerned. Secondly, consumers are well aware of environmental implications resulting from industrial productions. Such consumers will only buy products that are both environmental and health friends. Third, due to competition; the costs of production as risen translating to increase in prices. In the current global market, consumers are price sensitive and would only spend on cheap products and services (Youngs, 1996, p. 2).

These experiences have contributed to the governments turning cost effective means of production. Some government has resulted to outsourcing of labor force to lower production costs. Others have turned to environmental friendly technological methods to increase their market share and income generation. Developments of economic sustainable policies have been on the rise. Each government is striving to gain competitive advantage in the market (Held, 2009, p. 67). While some have succeeded, others have succumbed to poor planning and implementation.

These guidelines formed the basis of this study to find out how global issues such as economic growth, sustainable development and migration coexistence contribute to the economic developments of a country.

The previous coursework is a major contributor to the knowledge and ideas generated towards writing this piece of paper.

 

 

 

 

 

 

 

 

 

 

 

References List

Bercuson, K. (2005). Singapore: a Case Study in Rapid Development . Washington D.C: INTERNATIONAL MONETARY FUND.

Cheung, P. P. (1991). Social and Economic Implications of Singapore’s Immigration and Emigration Patterns. Centre for Advanced Studies: National University of Singapore, .

Dicken, P. (2011). Global Shift. London: Sage

Dicken, P. (2011). Global Shift: Mapping the changing contours of the world economy. The Guilford Press.

Ghesquiere, H. (2006). Singapore’s Success : Engineering Economic Growth. New York: Cengage Learning; 01 edition .

Held, D. A. (2009). Global Transformations: Politics, Economics and Culture. Stanford: Stanford University Press.

Heng, L. L. (2008). A Fine City in a Garden – Environmental Law and Governance in Singapore. Singapore Journal of Legal Studies , 68-177.

Huff, W. G. (1997). The Economic Growth of Singapore: Trade and Development in the Twentieth Century. Cambridge: Cambridge University Press.

Ives, M. (2014, March 18). Singapore Takes the Lead in Green Building in Asia.” Environment360, YaleUniversity. Accessed March 18, 2014. Retrieved February 28, 2015, from http://e360.yale.edu/feature/singapore takes the lead in green building

Jhingan, M. (2005). The Economics of Development and Planning. Delhi – 110091, India: Vrinda Publications Ltd.

Martin, M. F. (2011). The Asia-Pacific Economic Cooperation (APEC) Meetings in Honolulu: A Preview. Washington: Congressional Research Service.

Mitchie, J. (2011). The Handbook of Globalisation. Cheltenham: Edward Elgar.

Pang, E. F. (2002). Absorbing Temporary Foreign Workers: The Experience of Singapore. Asian and Pacific Migration Journal , Vol. 11,Nos. 34, pp. 495-509.

Payne, R. J. (2012). Global Issues . New Jersey: Pearson; 4 edition .

Porter, M. E. (1986). Competition in global industries . Boston: MA: Harvard Business School Press.

S, T. M. (2003). Economic Development. Delhi 110092, India: Pearson Education Pte Ltd.

Schein, E. H. (1996). Strategic Pragmatism: The Culture of Singapore’s Economics Development Board . Organization Studies.

Soubbtina, T. P. (2004). Beyond Economic Growth: An Introduction to Sustainable Development. Washington DC: USA: The World Bank.

Steger, M. (2013). Globalization: A Very Short Introduction . London-UK: Oxford University Press.

Yew, L. K. (2000). From Third World to First: The Singapore Story – 1965-2000. New Jersey: Harper; First edition.

Youngs, E. K. (1996). Globalization: theory and practice. London: Pinter.

 

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