1) Positives of the economy of Singapore:
1- Thriving service industry that contributes to 70% of the GDP of Singapore. It best utilizes the pro-business environmental policy of the government that encourages investment in different sectors with attractive incentives. Besides, Singapore is also a major tourism destination in South East Asia and it belongs to the service industry. That’s why, service industry gives approx. 80 % of the employment for people in Singapore and it is the reason for being one positive about Singapore economy.
2- Location advantage. Singapore boasts 190 KM long coastline with deep water ports that come along the major shipping routes in South East Asia. Thus, it simply makes Singapore a major avenue of trade and business. That’s why; it is another big positive for the Singapore economy.
3- Singapore is a developed and trade oriented economy.
4- The manufacturing sector of the country is highly developed.
5- The economy is very business friendly.
6- High investment in Research and Development.
2) Negatives of the economy of Singapore:
1- The over reliance on Export. The Singapore economy is export oriented, and it depends upon the global business environment. Any uncertainty in a global business environment negatively affects the economy and the economy makes contraction. It is already experienced in the year 2001 and 2008 when the recession took place. Thus, it makes it a negative point. Besides, competitions from emerging economies are also challenging the economy of Singapore.
2- The limitation of arable land area as well as lack of natural resources. Thus, the economy is dependent upon imports whose prices are highly volatile. It causes thinning of profit margin at times. Lack of agricultural land also does not support to meet the domestic demand. Thus, further imports take place. Thus, it acts as a negative point.
3- The openess of the economy becomes a burden in times of financial crisis.
4- The inflation rate is very high.
Q) Restructure analysis: Using the positive and negative information in questions 2 and 3, give suggestions to help the country restructure its economy or improve it economic growth. Give reasons why these suggestions will improve the economy.