1.0 Executive Summary 2
2.0 Introduction 2
3.0 Key Economic Issue 2
4.0 Economic Implications
4.1 Advantages of globalisation 2
4.2 Disadvantages of globalisation 4
5.0 Conclusion 5
6.0 References 6
7.0 Appendices 7
1.0 Executive Summary
While research was being done for this assignment, the article “Hong Kong surpasses S’pore as world’s most globalised economy” (Tao, 25 January 2011) piqued my interest, especially the word globalisation. I have heard about the word globalisation but have never understood what it really meant.
This essay will explain briefly what globalisation is, and highlight the key ...view middle of the document...
• As the liquidity level increases on globalization there is a higher chance of developed countries invest on developing countries which can bring a dynamic change for developing countries economy.
• Globalize media help in a great way of getting information faster than before.
• Great advantage to business people of developed countries by getting cheap labour for their work
• There is no barrier for communication to travel it helps individually and also for the corporations around the world.
Singapore is a small nation that has no natural resources of its own. Noting its own limitations, it has embarked on a concerted effort to sign as many Free Trade Agreements (FTAs) as possible with other countries. “A FTA is a treaty between two or more countries that do not impose tariffs for commerce conducted across their borders. This doesn't mean capital and labor moves freely between them, and tariffs are still imposed upon non-member countries. The idea is to open markets and provide opportunities for businesses to compete globally.” (http://www.businessdictionary.com/definition/free-trade-agreement.html)
In this respect, Singapore can import the essential commodities and natural resources at a more preferential rate. This lowers the cost of production and consequently increases the overall aggregate supply of the country, leading to an increase in real national income. (Figure 1)
Due to its superior location, workforce and infrastructure, Singapore has established itself as the regional hubs in travel, education and finance. This has led to a large influx of foreigners coming to Singapore for travel, studies or work. This has led to a boom in visitors, students and workers alike to its relatively relaxed visa policies. This has in part helped to increase the population of Singapore from 4.2 million in 2005 to 5.1 million in 2010 as illustrated in Table 1(Department of Statistics, Ministry of Trade & Industry, Republic of Singapore (n.d.)) This has brought about an increase in demand of goods and services in Singapore, which also encourages more businesses and industries to be developed. Overall, it increases both the aggregate demand and supply which results in the growth in real national income and the economy. (Figure 2)
Through sharing of ideas and information such as better business and management practices or new technological ideas, it enables higher productivity at work. On the Singapore Government business portal EnterpriseOne, it states “Economic growth cannot be sustained without improvements in productivity. Singapore's growth will depend on our ability to maximise labour, capital, work practices and innovation to achieve greater output.” (Productivity@Work, (n.d.)) Hence, increasing productivity is important to economic growth.
4.2 Disadvantages of globalization
• More developed countries will lose out to less developed countries on the basis of costs of doing businesses
• Increased flow of skilled and non-skilled jobs...