Economic policy and global environment Essay Example | Topics and Well Written Essays - 1500 words

Economic policy and global environment - Essay Example Over the span of the last decade, Singapore’s economy has shown growth at an average rate of 5 percent per annum (Ministry Of Manpower, 2013). Average growth rate of real GDP has been maintained at 8.6 percent between the years 2004 and 2007. Although the growth slackened in 2009 as an influence of the financial that hit almost all countries in the world, the economy rebounded by a growth rate of 14.8 percent in 2010 (CIA, 2013). At present the country’s GDP is $325.1 billion (2012 estimate) (CIA, 2013). This growth has been achieved through increase in productivity in the different sectors in the economy; particularly the financial services sector has depicted significant improvement. Average productivity growth has been nearly 1 percent per annum. The growth rate has matched pace with the productivity growth rate found in other developed nations. The broad range of the citizens of Singapore also enjoyed the benefits of increasing real wage rate. This has in effect led to an increase their standard of living. The government must play an active role in developing a pulsating style of life for the average Singaporean and transform the country into a distinctly recognizable global city and â€Å"a leading cultural capital† (Ministry of Finance, n.d.), containing such good attributes as, openness, integrity and diversity (NPTD, 2013). Growth in productivity allows the country to make it the most excellent place to live and grow, â€Å"a home that provides an outstanding quality of life† (MOF, n.d.) for the people. Utilization of sound financial system: vast public expenditures The remarkable growth in productivity in the economy has been possible through strategic participation of the government sector in the growth process along with the private sector. The government of Singapore has a sound finance system. Unlike those other governments, Singapore does not face the threat of deep slashes in public expenditure or rising tax rates as a n aftermath of financial crisis. Therefore, the Government can make vast expenditures in the field of quality education, research and development, development of infrastructure and communication. A total budget of US $10.6 billion was allocated to the Ministry Of Education Government for FY2012, The major proportion of which has been dedicated to the development of special education schools, poly technique colleges and technical education institutes. This creates a self-directed learner and an active contributor to the state, which enhances productivity (MOF, 2012a). 3.4 percent of the total expenditure mentioned in the budget for the FY2012 has been dedicated to the National Research Fund with the objective of making Singapore a R&D hub and a competitive and innovative economy (MOF, 2012b). In 2011 this expenditure accounted for 2.3 percent of GDP of the country, and in 2010 this proportion was 2.1 percent of the GDP (MOF, 2012b). This shows that the country has focused on improvin g on the productivity via innovation and knowledge-base. A sum of $458.4 million had been allocated for promoting communication technology in FY2012. The strategies were to encourage demand for Infocomm Technology (ICT), create innovative services and establishing policies regulations to sustain new ICT developments (MOF, 2012c). Economic restructuring The Government plays a dominant role in catalysing economic restructur