Faculty of Management Studies Institute of Rural Management

2010-12

Evaluation Of Singapore

Submitted To: Prof. Asha Sharma Faculty Guide Fms-Irm, Jaipur

Submitted By: Amit Kumar Sharma (1622) Deepika Rahora (1645) Dheeraj Vijay (1648) Himanshu Mathur(307) Mrinal Garg (1667)
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Singapore:
Officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, 137 kilometers (85 mi) north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesias Riau by the Singapore Strait to its south. The country is highly urbanized with very little primary rainforest remaining, although more land is being created for development through land reclamation. Singapore declared independence, uniting with other former British territories to form Malaysia in 1963, although it was separated from Malaysia two years later. Since then it has had a massive increase in wealth, and is one of the Four Asian Tigers. Singapore is the world's fourth leading financial centre, and its port is one of the five busiest ports in the world. The economy depends heavily on exports and refining imported goods, especially in manufacturing, which constituted 26% of Singapore's GDP in 2005. Singapore is a parliamentary republic with a Westminster system of unicameral parliamentary government. The People's Action Party has won every election since self-government in 1959, and governs on the basis of a strong state and prioritizing collective welfare over individual rights such as freedom of speech, an approach that has attracted criticism from organizations such as Freedom House. Some 5 million people live in Singapore, of whom 2.91 million were born locally. Most are Chinese, with Malays and Indians forming significant minorities. There are four official languages: English, Chinese, Malay, and Tamil. One of the five founding members of the Association of South East Asian Nations, Singapore is also the host of the APEC Secretariat, and a member of the East Asia Summit, the Non-Aligned Movement, and the Commonwealth.

Republic of Singapore :

Motto: "Majulah Singapura" (Malay) "Onward, Singapore

Coat of arms

Flag

Capital Official language(s) Demonym Government President Prime Minister Speaker of Parliament Chief Justice Legislature Formation Founding Self-government

Singapore
English, Malay, Tamil Singaporean Parliamentary Republic S.R. Nathan Lee Hsien Loong Abdullah Tarmugi Chan Sek Keong Parliament

6 February 1819 3 June 1959

Government and Politics:

Singapore is a parliamentary republic with a Westminster system of unicameral parliamentary government representing different constituencies. The Constitution of Singapore establishes representative democracy as the nation's political system. The People's Action Party (PAP) dominates the political process and has won control of Parliament in every election since self-government in 1959. Freedom House ranks Singapore as "partly free" in its "Freedom in the World report", and The Economist ranks Singapore as a "hybrid regime", the third rank out of four, in its "Democracy Index". Singapore is consistently rated as one of the least corrupt countries in the world by Transparency International. The bulk of the executive powers rests with the cabinet, headed by the Prime Minister. The office of President, historically a ceremonial one, was granted some veto powers in 1991 for a few key decisions such as the use of the national reserves and the appointment of judicial positions. Although the position is to be elected by popular vote, only the 1993 election has been contested to date. The legislative branch of government is Parliament. Parliamentary elections in Singapore have been plurality-based for group representation constituencies since the Parliamentary Elections Act was modified in 1991. Members of Parliament (MPs) consist of elected, non-constituency and nominated members. The majority of MPs are elected to Parliament at a general election on a "first-past-the-post" (plurality) basis and represent either single member or group representation constituencies (GRCs). Although Singapore's laws are inherited from English and British Indian legislation, and include many elements of English common law, in some respects they have departed from that tradition since independence. A survey by Political and Economic Risk Consultancy (PERC) of international business executives in September 2008 found that those surveyed considered that Singapore, along with Hong Kong, had the best judicial system in Asia.

Economy of Singapore:
Singapore has a highly developed state capitalist mixed economy; the state owns stakes in firms that comprise perhaps 60% of the GDP through entities such as the sovereign wealth fund Temasek. Singapore has a highly developed market-based economy, based historically on extended entrept trade. Along with Hong Kong, South Korea and Taiwan, Singapore is one of the Four Asian Tigers.

The economy depends heavily on exports and refining imported goods, especially in manufacturing, which constituted 26% of Singapore's GDP in 2005 and includes significant electronics, petroleum refining, chemicals, mechanical engineering and biomedical sciences sectors. In 2006 Singapore produced about 10% of the world's foundry wafer output. The country is the world's fourth leading financial centre. Singapore has one of the busiest ports in the world and is the world's fourth largest foreign-exchange trading centre after London, New York and Tokyo. The World Bank ranks Singapore as the world's top logistics hub. Singapore possesses the world's tenth largest foreign reserves. Singapore's external trade is of higher value than its GDP, making trade one of the most vital components of the economy. Over ten free trade agreements have been signed with other countries and regions. Singapores economy has been ranked amongst the world's ten most open, competitive and innovative. Singapore is rated the most business-friendly economy in the world, and multinational corporations employ thousands of foreign expatriates. Before independence in 1965, Singapore had a GDP per capita of $511, then the third highest in East Asia. After independence, investment and a state-led drive for industrialization based on plans by Goh Keng Swee and AlbertWinsemius created a modern economy. As a result of global recession and a slump in the technology sector, the country's GDP contracted by 2.2% in 2001. The Economic Review Committee was set up in December 2001 and recommended several policy changes to revitalize the economy. Singapore has since recovered, largely due to improvements in the world economy; the economy grew by 8.3% in 2004, 6.4% in 2005 and 7.9% in 2006. After a contraction of -6.8% in the 4th quarter of 2009, Singapore was the fastestgrowing economy in the world, with GDP growth of 14.5% for the year 2010. Most work in Singapore is in the service sector, which employed around 2,151,400 people out of 3,102,500 jobs in December 2010. Around 64.2% of jobs were held by locals. The percentage of unemployed economically active people above age 15 is about 2%. Poverty levels are low compared to other countries in the region. The government provides cheap housing and financial assistance to poorer people. Singapore introduced a Goods and Services Tax (GST) with an initial rate of 3% on 1 April 1994, increasing government revenue by S$1.6 billion (US$1b, 800m) and stabilizing government finances. The taxable GST was increased to 4% in 2003, to 5% in 2004, and to 7% in 2007. Most companies in Singapore are registered as private limited-liability companies (commonly known as "private limited companies"). A private limited company in Singapore is a separate legal entity, and shareholders are not liable for the company's debts beyond the amount of share capital they have contributed.
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It has an open business environment, relatively corruption-free and transparent, stable prices, and one of the highest per capita gross domestic products (GDP) in the world. Its innovative yet steadfast form of economics that combines economic with free-market has given it the nickname the Singapore Model. Exports, particularly in electronics and chemicals, andservices provide the main source of revenue for the economy, which allows it to purchase natural resources and raw goods which it does not have. Most companies in Singapore are registered as private limited-liability companies (commonly known as "private limited companies"). A private limited company in Singapore is a separate legal entity, and shareholders are not liable for the company's debts beyond the amount of share capital they have contributed. Singapore could thus be said to rely on an extended concept of entrepot trade, by purchasing raw goods and refining them for re-export, such as in the wafer fabrication industry and oil refining. Singapore also has a strategic port which makes it more competitive than many of its neighbors to carry out such entrepot activities. The Port of Singapore is the busiest in the world, surpassing Rotterdam and Hong Kong. In addition, Singapore's port infrastructure and skilled workforce, which is due to the success of the country's education policy in producing skilled workers, is also fundamental in this aspect as they provide easier access to markets for both importing and exporting, and also provide the skill(s) needed torefine imports into exports. On 14 February 2007, the Singapore government announced that economic growth for the whole year of 2006 was 7.9%, higher than the originally expected 7.7%. Singapore's unemployment rate is around 2.2% as of 20th Feb, 2009. As of August 8, 2010, Singapore is the fastest growing economy in the world, with a growth rate of 17.9% for the first half of 2010.

Macro-economic trends
Year 1980 1985 1990 1995 2000 2005 2007 2008 2009 2010 GDP $ million 25117 39036 66778 119470 159840 194360 224412 235632 268900 309400 US Dollar Exchange
2.14 Singapore Dollars 2.20 Singapore Dollars 1.81 Singapore Dollars 1.41 Singapore Dollars 1.72 Singapore Dollars 1.64 Singapore Dollars 1.42 Singapore Dollars 1.37 Singapore Dollars 1.50 Singapore Dollars 1.32 Singapore Dollars

Per Capita Income 39.65 36.63 52.09 86.14 66.19 67.54 74.61 73.71 78.53 82.13

The government promotes high levels of savings and investment through a mandatory retirement savings scheme known as the Central Provident Fund, and large portions of its budget are expended in education and technology, with the former having a current rate as of 21% in 2001 compared to spending in the United States of 4%. However, the figures may be misleading as the majority of US education funding comes from the state level, not federal. It also owns Temaseklinked companies (TLCs, companies that are linked to the government's investment arm) particularly in manufacturing - that operate as commercial entities and account for 60% of GDP. As Singapore looks to a future increasingly marked by globalization, the country is positioning itself as the region's financial and high-tech centre in competition with other East Asian cities. Singapore's strategic location on major sea lanes and industrious population have given the country an economic importance in South-east Asia disproportionate to its small size. Upon separation from Malaysia in 1965, Singapore was faced with a lack of physical resources and a small domestic market. In response, the Singapore Government adopted a pro-business, proforeign investment, export-oriented economic policy combined with state-directed investments in strategic government-owned corporations. Whilst nominally socialist in the 1960s, the ruling party increasingly became openly capitalist but self-described itself as 'pragmatic', a euphemism for capitalism with authoritarian social controls. Singapore's government moved towards guiding the economy and investing in medicine and infrastructure. Singapore's economic strategy proved a success, producing real growth that averaged 8.0% from 1960 to 1999. The economy picked up in 1999 after the regional financial crisis, with a growth rate of 5.4%, followed by 9.9% for 2000.

However, the economic slowdown in the States, Japan and the European Union, as well as the worldwide electronics slump, had reduced the estimated economic growth in 2001 to a negative 2.0%. The economy expanded by 2.2% the following year, and by 1.1% in 2003 when Singapore was affected by the SARS outbreak. Subsequently, a major turnaround occurred in 2004 allowed it to make a significant recovery of 8.3% growth in Singapore, although the actual growth fell short of the target growth for the year more than half with only 2.5%. In 2005, economic growth was 6.4% while there was 7.9% growth in Year 2006. Singapore's largely corruption-free government, skilled workforce, and advanced and efficient infrastructure have attracted investments from more than 3,000 multinational corporations (MNCs) from the United States, Japan, and Europe. Foreign firms are found in almost all sectors of the economy. MNCs account for more than two-thirds of manufacturing output and direct export sales, although certain services sectors remain dominated by government-linked corporations. Manufacturing and financial business services are the twin engines of the Singapore economy and accounted for 26% and 22%, respectively, of Singapore's gross domestic product in 2000. The electronics industry leads Singapore's manufacturing sector, accounting for 48% of Singapore's total industrial output, but the government also is prioritising development of the chemicals and biotechnology industries. To maintain its competitive position despite rising wages, the government seeks to promote higher value-added activities in the manufacturing and services sectors. It also has opened, or is in the process of opening, the financial services, telecommunications, and power generation and retailing sectors to foreign service providers and greater competition. The government has also attempted some measures including wage restraint measures and release of unused buildings in an effort to control rising commercial rents with the view to lowering the cost of doing business in Singapore when central business district office rents tripled in 2006.

Technological Environment of Singapore :

Whilst praise has been given to efforts to promote the Singaporean biotechnology sector, the traditional tech sector remains larger and could benefit from similar public-private sector efforts to promote Singaporean high-tech companies. Whilst the government will not consider a "Buy Singaporean Tech" campaign, the spending power of the government and government-linked companies alone could impact sales and company value of Singaporean high-tech companies.

Some believe more tax holidays for high-tech hardware companies and government loans for the more innovative ones will lead Singapore to surpass other tech centres in East Asia, although competing with inventors and product designers in Japan and South Korea may prove difficult due to Singapore's small base. This line of thinking suggests that the nation needs skilled foreign tech talent and should make it easier for those with the latest tech skills to come to Singapore from China and South Asia as well as from Japan,South Korea and Western countries. Biotechnology Singapore is aggressively promoting and developing its biotechnology industry. Hundred of millions of dollars were invested into the sector to build up infrastructure, fund research and development and to recruit top international scientists to Singapore. Leading drug makers, such as GlaxoSmithKline (GSK), Pfizer and Merck & Co., have set up plants in Singapore. On 8 June 2006, GSK announced that it is investing another S$300 million to build another plant to produce pediatric vaccines, its first such facility in Asia.[8] Pharmaceuticals now account for more than 16% of the country's manufacturing production.

Culture of Singapore :
Racial and religious harmony is regarded by the government as a crucial part of Singapore's success and played a part in building a Singaporean identity. Due to the many races and cultures in the country, there is no single set of culturally acceptable behaviours. People in Singapore are generally well educated, and although the country is socially conservative, some liberalisation has occurred. Foreigners also make up 42% of the population in Singapore and have a strong influence on Singaporean culture. A.T. Kearney named Singapore the most globalised country in the world in 2006 in its Globalization Index. The Economist Intelligence Unit in its "Quality-ofLife Index" ranks Singapore as having the best quality of life in Asia and eleventh overall in the world

Languages :
Singapore has four official languages: English, Malay, Mandarin, and Tamil. English is the dominant language. 80% of Singaporeans are literate in English as either their first or second language. Mandarin is the next commonly spoken, followed by Malay and Tamil. Singaporean English is based on British English, and forms of English spoken in Singapore range from Standard English to a pidgin known as Singlish. Singlish is heavily discouraged by the government. According to the official government census in 2010, nearly one in three Singaporean speak English as their home language.

Trade Investment and Aid :

Singapore's total trade in 2000 amounted to S$373 billion, an increase of 21% from 1999. Despite its small size, Singapore is currently the fifteenth-largest trading partner of the United States. In 2000, Singapore's imports totaled $135 billion, and exports totaled $138 billion. Malaysia was Singapore's main import source, as well as its largest export market, absorbing 18% of Singapore's exports, with the United States close behind. Re-exports accounted for 43% of Singapore's total sales to other countries in 2000. Singapore's principal exports are petroleum products, food/beverages, chemicals, textile/garments, electronic components, telecommunication apparatus, and transport equipment. Singapore's main imports are aircraft, crude oil and petroleum products, electronic components, radio and television receivers/parts, motor vehicles, chemicals, food/beverages, iron/steel, and textile yarns/fabrics. The Singapore Economic Development Board (EDB) continues to attract investment funds on a large-scale for the country despite the city's relatively high-cost operating environment. The U.S. leads in foreign investment, accounting for 40% of new commitments to the manufacturing sector in 2000. As of 1999, cumulative investment for manufacturing and services by American companies in Singapore reached approximately $20 billion (total assets). The bulk of U.S. investment is in electronics manufacturing, oil refining and storage, and the chemical industry. More than 1,500 U.S. firms operate in Singapore. The government also has encouraged firms to invest outside Singapore, with the country's total direct investments abroad reaching $39 billion by the end of 1998. The People's Republic of China was the top destination, accounting for 14% of total overseas investments, followed by Malaysia (10%), Hong Kong (8.9%), Indonesia (8.0%) and U.S. (4.0%). The rapidly growing economy of India, especially the high technology sector, is becoming an expanding source of foreign investment for Singapore. The United States provides no bilateral aid to Singapore, but the U.S. appears keen to improve bilateral trade and signed the U.S.-Singapore Free Trade Agreement. Singapore corporate tax is 18%

Year 2000 2001 2002 2003 2004 2005

Total trade $ 273 432 516 629 716

imports $ Exports $ % change 135 138 21% -9.40% 1.50% 237 279 9.60% 293 336 21.90% 333 383 14%

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Foreign relations of Singapore :

Singapore's foreign policy is directed to maintaining a secure environment in Southeast Asia as well as the territories that surround it. An underlying principle is regional political and economic stability in the region. It has diplomatic relations with 175 other Sovereign states. As one of the five founding members of the Association of South East Asian Nations, the country is a strong supporter of the ASEAN Free Trade Area and the ASEAN Investment Area, because Singapore's economic growth is closely linked with the economic progress of the region as a whole. Former Prime Minister Goh Chok Tongproposed the formation of an ASEAN Economic Community, a step beyond the current AFTA bringing it closer to a common market. This idea was agreed to in 2007 for implementation in 2015. Other regional organizations are also important to Singapore, and it is the host of the APEC Secretariat. Singapore also maintains membership in other regional organizations, such as AsiaEurope Meeting, the Forum for East Asia-Latin American Cooperation, and the East Asia Summit. It is also a member of the Non-Aligned Movement and the Commonwealth. Bilateral relations with surrounding countries are strong, especially since all are members of ASEAN. However, disagreements have arisen. Malaysia has often come into conflict with Singapore over Singapore's land reclamation projects, and disputes have arisen over the delivery of fresh water to Singapore. Border issues exist between Singapore and both Malaysia and Indonesia, although some previous disputes have been solved by the International Court of Justice. The issue of piracy in the Malacca Strait has been a cause of concern for all three countries. Close economic ties exist with Brunei, and the two share a pegged currency value. Singapore has strongly pushed regional counter-terrorism initiatives, with a strong resolve to deal with terrorists inside its borders. To this end it has given support to the US-led coalition to fight terrorism, with bilateral cooperation in counter-terrorism and counter-proliferation initiatives, and joint military exercises. Relations with the United States have expanded in other areas, and the two countries share a free trade agreement and take part in joint policy dialogues. Relations with the People's Republic of China were established in the 1970s, and since then the two countries have enjoyed a strong relationship, being major players in strengthening the ASEAN-China relationship. Singapore is the only predominantly Chinese country other than China, and it has tried to mediate between the People's Republic of China and the Republic of China. It has strong economic ties with both, although relations have sometimes suffered when Singapore seemingly gets too close to one of them.
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Facts and figure :

Percentage of economic growth in Year 2007: 7.4% Industrial production growth rate: 6.8% (2007 est.) Electricity - production: 41.137.7 billion kWh (2007) Electricity - production by source: fossil fuel: 100% hydro: 0% nuclear: 0% other: 0% (1998) Electricity - consumption: 37.420.3 billion kWh (2007) Electricity - exports: 0 kWh (2007) Electricity - imports: 0 kWh (2007) Agriculture - products: rubber, copra, fruit, vegetables; poultry, eggs, fish, orchids, ornamental fish

Exchange rate:
Year 1985 1990 1995 2000 2005 Singapore Dollars per1.7275 1.415 1.7361 1.6738 2.1213 US$1 2008 1.3643 2009 1.5123 2011 1.2872

Currency :
Currency: 1 Singapore dollar (S$ or SGD) = 100 cents The currency of Singapore is the Singapore dollar, represented by the symbol S$ or the ISO abbreviation SGD. The central bank is the Monetary Authority of Singapore, responsible for issuing currency. Singapore established the Board of Commissioners of Currency in 1967 and issued its first coins and notes. The Singapore dollar was exchangeable at par with the Malaysian ringgit until 1973. Interchangeability with the Brunei dollar is still maintained. On 27 June 2007, to commemorate 40 years of currency agreement with Brunei, a commemorative S$20 note was launched; the back is identical to the Bruneian $20 note launched simultaneously.

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Singaporean Management Style:

As befits a hierarchical structure, managers tend to be older which in itself lends them an air of authority. As in the rest of Asia, age still implies wisdom and people will be more comfortable dealing with an older manager than a young 'wizz-kid'. Managers delegate decisions to their teams and expect the decisions to be overtly respected. This does not mean, however, that the rational behind the decision is never debated - it is merely that any dissension is likely to be aired in a more private manner than in the full plenum of an open meeting. (This, again, may not hold true when dealing into a Singapore-based MNC.) As in all basically Confucian business cultures, the manager expects to be respected and obeyed and in return for loyalty and dedication to the cause will show a much more holistic interest in the well being of his team. This includes an almost paternal regard for many aspects of a subordinate's life. The manager's relationship with the team does not necessarily finish at the end of the working day. Outside family ties, promotion will be based on merit and performance criteria rather than connections. The performance criteria may, however, differ from those in the West and top of the list may be the ability to create a harmonious team in which people feel at ease.

Singapore Workforce and Dependence of foreign workers :

In 2000, Singapore had a workforce of about 2.2 million. The National Trades Union Congress (NTUC), the sole trade union federation which has a symbiotic relationship with the ruling party, comprises almost 99% of total organized labour. Government policy and pro-activity rather than labour legislation controls general labour and trade union matters. The Employment Act offers little protection to white collar workers due to an income threshold. The Industrial Arbitration Court handles labour-management disputes that cannot be resolved informally through the Ministry of Labour. The Singapore Government has stressed the importance of cooperation between unions, management and government (tripartism), as well as the early resolution of disputes. There has been only one strike in the past 15 years. Singapore has enjoyed virtually full employment for long periods of time. Amid an economic slump, the unemployment rate rose to 4.0% by the end of 2001, from 2.4% early in the year. Unemployment has since declined and in 2005, the unemployment rate is 2.7% in 2006, the lowest in the last four years, with 2.3 million people being employed.
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The Singapore Government and the NTUC have tried a range of programs to increase lagging productivity and boost the labour force participation rates of women and older workers. But labour shortages persist in the service sector and in many low-skilled positions in the construction and electronics industries. Foreign workers help make up this shortfall. In 2000, there were about 600,000 foreign workers in Singapore, constituting 27% of the total work force. As a result, wages are relatively suppressed or do not rise for all workers. In order to have some controls, the government imposes a foreign worker levy payable by employers for low end workers like domestic help and construction workers.

Geography of Singapore
Singapore consists of 63 islands, including mainland Singapore. The main island, widely known as Singapore Island, is officially called Pulau Ujong. There are two man-made connections to Johor, Malaysia: the JohorSingapore Causeway in the north, and the Tuas Second Link in the west. Jurong Island, Pulau Tekong, Pulau Ubin and Sentosa are the largest of Singapore's many smaller islands. May and June are the hottest months, with the wetter monsoon season in November and December. From August to October, there is often haze caused by bush fires in neighbouring Indonesia. Singapore does not observe daylight saving time or a summer time zone change. The length of the day is nearly constant all year round.

Demographics of Singapore :
The population of Singapore has the sixth-highest percentage of foreigners globally, with just over forty percent. In 2009, the population of Singapore was just under 4.99 million, with a population density of 7,022 people per square kilometer. 3.73 million were Singaporean citizens and permanent residents, with citizens making up 3.2 million citizens. Of its residents, 74.2% are of Chinese descent, 13.4% are of Malay descent , and 9.2% are of Indian descent. Prior to 2010, each person could register as a member of only one race, by default that of his or her father. Now people may register using "double-barreled" classification, in which they may choose one primary race and one secondary race, but no more than two.

In 2010, the total fertility rate was 1.1 children per woman, the third lowest in the world and well below the 2.1 needed to replace the population. To overcome this problem, the government is encouraging foreigners to immigrate to Singapore. The large number of immigrants have kept Singapore's population from declining.

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