Singapore Assessing the impact of the regionalization strategy

capital of capital of capital of Singapore Assessing the impact of the regionalization schemeHas the regionalization schema succeeded in sustaining Singapores scotch combat in Asia for the catch from 1995 to 2010? exempt your answer with supporting evidence.The formulation of discipline st directgies to leverage upon international resources for frugal development has always been part and parcel of Singapores snub to engender continue sparingal fruit since independence in 1965, based upon the echtlocation of economic resources via the Developmental State Model (Evans, 1995). To this end, the Singapore government engaged in distant direct investiture (FDI)-oriented growth models from the 1960s to the 1990s, investing in education, healthcare, and infrastructure to achieve economic growth and enhance the countrys economic competitiveness through the creation of a secure and pro-business environs. (Yeung, 2001) State investment on infrastructure and human capital was e xcessively seen as a actor of benefiting from developmental effects such as the generation of employment, earning of outside(prenominal) currency, and permute of technological or managerial expertise (Chang, 1999).The subsequent onset of world(a)ization and advances in information and communication technologies (ICT) from the 1980s onwards led to structural changes among the economies of the developed world, necessitating a shift from labour-intensive, low value-added manufacturing towards high-tech, high value-added industries and financial services. At the same time, several governments in the region, including those of Malaysia and Indonesia, sought to liberalise their economies and capitalise on prune average labour, land, and crank material cost in evidence to attract unconnected investors (Tongzon, 1998), emulating the FDI-oriented strategies adopted previously by the economies of Singapore, Taiwan, and Hong Kong. By 1990, insurrection labour and land costs in Sing apore had led umpteen international corporations to relocate their lower value-added trading operations to the regional lately-industrialising economies (NIEs), where boilersuit run costs were lower by as much as 75%. (Kumar Lee, 1991)The Singapore governments response vis--vis this locomote competition for capital investment in the industrial and manufacturing sectors was to ensure Singapores continued relevancy in the new ball-shaped market perspective despite her resource constraints and limited domestic market (Singapore frugal Development Board (SEDB), 1995a) by implementing new national strategies for economic development, gull the onset of the regionalisation dodge, aimed at creating an impertinent rescue through participation in the dynamic growth opportunities of regional economies in the Asia Pacific. (SEDB, 1995b). This essay aims to demonstrate that the regionalisation strategy has succeeded to a thumping extent in sustaining Singapores economic competitiv eness in Asia for the period from 1995 to 2010, devoted its central role in facilitating Singapores transition from an export-oriented manufacturing tenderness to a knowledge-based economy and global business hub in the Asia Pacific, although it should be prize that these regional initiatives do not reduce Singapores impertinent dependence precisely instead augment her economic vulnerabilities.Regionalisation 2000To harness external economic stead and overcome local anaesthetic supply-side constraints (Regionalisation Forum Proceedings, 1993), the idea of Regionalisation 2000 was introduced in the 1990s to get on greater investment and business in the Asia Pacific region, rationalised by the loosening of foreign investment controls occurring in large Asia Pacific markets such as China, Vietnam, and Indonesia, and by the high growth rates being achieved by these economies. (Okposin, 1999) explicitly designed to enhance Singapores competitiveness in spite of appearance the regional and global economies (Wong Ng, 1997) given Singapores decreasing comparative advantages in the industrial and manufacturing sector due to its importantly higher labour, land, and raw material costs vis--vis the Asian NIEs, Regionalisation 2000 consisted of computer political platforms for creating a knowledge- and service-based economy via four main regional initiatives comprising regional headquartering, regionalisation of local enterprises, regional investment, and regional industrialization, with regional investments and regional industrialization projects constituting the major transnational faces of Singapores regionalisation drive.According to the frugal Development Board (1995),The strategical intent of the regionalization programme is to plant an external economy that is button uply linked to and which enhances the domestic economy by participate in the growth of Asia. This programme seeks to form a ne 2rk of strategic zones in key markets with emphasis on building good linkages amid our regional projects and domestic clusters. (SEDB, 1995, p. 8)The regionalisation strategy should therefore be conceptualised as an economic programme explicitly designed to carve out a new economic niche for sustaining Singapores competitiveness and relevance, particularly during a period when its antecedent economic strength in manufacturing was being eroded by rising competition with Asian NIEs and structural changes in the world economy. In this regionalisation drive, as in prior economic development programmes, accede intervention and coaction played an important role, with the governments regional headquartering and regionalisation of local enterprises programmes representing instances of state intervention within national boundaries.Construed as the twin objectives of come on internationalizing Singapores indigenous firms and assisting the transnational restructuring and cost-competitive endeavours of hosted foreign TNCs in an adaptive con text (xxx), the government aimed to encourage foreign and local enterprises to invest and establish business gos in the region, using Singapore as a headquarters for high value-added operations such as harvest development, customer support, and financial services. To this end, the government has invested in institutional infrastructure and the sweetener of local factors of production such as workforce quality (Ho, 2000), oblation tax incentives and supporting services in its self-conceived role as stakeholder, facilitator, and spouse (Perry Yeoh, 2000) to strengthen the competitive advantages of transnational corporations and domestic enterprises in their outward involution into the region.To complement regional headquartering and the regionalisation of local enterprises, regional investment and regional industrial enterprise programmes were introduced to further facilitate Singapores embrace of economic globalisation through investment-driven economic growth (Porter, xxx) a nd economic restructuring through the relocation of local low value-added industries to Singapore-managed industrial pose in the region. Noting how some transnational corporations had been reluctant to relocate operations from Singapores secure business environment to the emerging NIEs due to a scarcity of high-quality industrial infrastructure and management (Kumar Lee, 1991), the Singapore government sought to build and manage industrial parks across Asia at locations such as Batam in Indonesia, Suzhou and Wuxi in China, at Bangalore in India, and in Thailand and Vietnam, combining Singapores expertise in industrial development with the low cost of regional land, labour, and raw materials, whilst maximising the use of savings and state revenue through investment in regional investments to further profit from the economic growth in Asia.Serving as interesting examples of government intervention outside of national boundaries, given their transnational nature, the governments inte ntion to export Singapores expertise in industrial infrastructure development across the region (Perry, 1995) is therefore implicit in the regionalisation strategy, promoting regional economic linkages and the concept of Singapore Incorporated based upon close cooperation between the Singapore government and a wide range of Singapore business entities.Has the regionalization strategy succeeded in sustaining Singapores economic competitiveness in Asia for the period from 1995 to 2010? Explain your answer with supporting evidence.Regionalisation 2000- A Success?According to the Singapore Department of Statistics (2011), the first 15 geezerhood of the regionalisation drives implementation from 1995 to 2010 was characterised by overall strong gross domestic product growth, from S$124,581.8m in 1995 to S$284,560.7m in 2010, with Singapore registering double-digit growth in 2010 from the previous year. Negative economic growth, however, occurred in the old age 1998, 2001, and 2009, foll owing poor regional or global economic performance, and this is credited(predicate) to Singapores vulnerabilities and dependence on external economies for economic growth.In terms of real economic growth, the states economic transition into a knowledge-based economy is evident from control 1, given the overall decreasing fate share of manufacturing in GDP from the years 2000 to 2010, whilst business and financial services together account for round 22 percent of GDP as of 2010, on par with the percentage share held by manufacturing alone. FDI in Singapore has grown from strength to strength, pointing to a successful sustenance of foreign investment inflows by the governments regional headquartering strategies aimed at attracting high value-added industries and investment to enhance Singapores niche as a global business hub in the Asia Pacific. From 1995 to 2005, FDI in Singapore more than tripled from S$93b to S$311b, representing an average growth of 13% per annum, with FDI in professional, technical, administrative, and support services gaining vastness and increasing from 1.7% to 3.1%. (Singapore Department of Statistics (SingStat), 2007). Europe, Asia, and North America constituted important sources of FDI, account statement for up to 82% of the total, with Asian FDI more than doubling from S$31b to S$74b (SingStat, 2007).Of this FDI, 87% was concentrated in diversified sectors such as financial and insurance services, high value-added manufacturing of pharmaceuticals, electronics, and petrochemicals, wholesale and retail trade, and hotels and restaurants, reflecting Singapores attractiveness to foreign investors as a business hub (SingStat, 2007). It send packing be surmised, therefore, that Regionalisation 2000 has succeeded in this regard, ensuring Singapores transformation into a regional business hub in the global market, sustaining its economic competitiveness in Asia through the creation of new economic niches in product development, customer support, and financial services for foreign and local enterprises.The other transnational aspect of Singapores regionalisation programme has, however, proved less successful. Direct investment abroad by Singapore has not managed to exceed levels of FDI in Singapore itself (Figure 3), indicating that the regional headquartering programme a keen-sighted with FDI were responsible to a large extent for Singapores economic growth over the past 15 years. The onset of the Asian Financial Crisis in 1998, in particular, significantly negated the regional industrialisation, regionalisation of local enterprises, and regional investment programmes, do many projects to suffer financial loss due to a repellent contraction in demand for industrial products from both consumers and producers in the region. (Henderson, 1999) Still, despite no actual reports of the regional industrialisation programme being moneymaking (xxx), and the absence of verifiable information on Singapores investment perfo rmance by Temasek Holdings and GIC in the long period spanning 1995 to 2010, it can be argued that the regional industrialisation programme was designed to supplement the domestic economy in the long run, since infrastructural projects require large initial investments of capital resources.The regional industrialisation programme brought about positive economic benefits, not least for those companies which relocated their lower value-added operations to the regional industrial parks, facilitating Singapores shift towards a higher-tech and higher value-added economy. In the case of the Batam industrial Park, most of the enterprises that chose to occupy these it generally established additive units instead of shifting all operations foreign, and also tended to upgrade the equaliser of their operations in Singapore (Kumar Lee, 1991) Furthermore, investors located in Singapore-developed industrial parks were reported to be highly satisfied with the operation and management of these industrial parks, especially in terms of cost savings (Kumar Lee, 1991). The regional industrialisation and regionalisation of local enterprises programmes thus served as strategic outlets for transnational and local corporations to reduce operating costs and improve profit margins, sustaining Singapores economic competitiveness and relevance in the region to a large extent despite the limits of state intervention in transnational business environments. Instead of focusing all on internet generated, a long-term view of Singapore Inc. indicates that it is build upon strong business fundamentals, as exemplified by the sound infrastructure and superordinate word administration of the regional industrial parks. These offer the electromotive force of future profits for the Singapore government in times of strong manufacturing demand for industrial products, having turn up its feasibility based on the high take-up rate of industrial space in Singapore-developed industrial parks prio r to the crisis, and outgrowth demand for industrial units after 1999 (xxx).Evaluating Regionalisation 2000- A Success to a oversized ExtentSingapores regionalisation drive has therefore exposed her external dependence and vulnerabilities with regards to the external economic environment, which most negatively affected the regionalisation programme, rather than failings in the strategy itself. In contrast to the domestic success of the regional headquartering programmes in attracting FDI to Singapore, the bewilder of Singapores regionalisation strategy overseas has shown that the achievement of national competitiveness in the global economy cannot be brought about by the states policies and support alone, with the external environment and availability of global opportunities playing an equally important role, given the states limitations in economic, political, and social resources, and factors beyond its control in the regional economy and investor confidence.The Suzhou Industri al Park, in particular, has often been alluded to as an example of a foreign venture gone wrong, with the Singapore government divesting its ownership and management of the Park to the Suzhou municipal authorities. Much media attention has also been devoted to the financial losses incurred by Temasek Holdings in foreign investments and acquisitions, and these notable examples further demonstrate that the success of Singapores regionalisation drive does depend to a large extent on international economic cycles. The regionalisation strategy, though, has succeeded to a large extent in sustaining Singapores economic competitiveness in Asia for the years 1995 to 2010, mainly due to its success in ensuring Singapores continued relevance in the global economy by exploiting new economic niches. The overseas regionalisation initiatives hold the promise of success given their strong fundamentals, and possess potential for much greater returns, if not much greater risks, and are submissive in Singapores embrace of economic globalisation if she desires not to be out-competed by NIEs in the region. Indeed, the main thrust of Singapores economic development since independence has been to flesh out in change, and the overall success of the regionalisation programme is reflected in Singapores been ranked the worlds easiest place to do business. Singapore, too, is ranked among the top few when it comes to cities with best investment potential, foreign trade and investment, business legislation and efficiency, quality of human capital, and minimal corruption. (SEDB, 2011)To further sustain and improve its regional economic competitiveness in the years ahead would require Singapore to further improve its attractiveness to foreign FDI, given its success so far, particularly in the services sector, which is solace relatively underdeveloped, and regional tourism, which is also seeing success since the opening of the two Integrated Resorts, with overall visitor numbers to Singapo re increasing and gain a peak of approximately 11m in 2010 (SingStats, 2011), indicating its potential. The years from 1995 to 2010 have also afforded the government extensive opportunities to adapt and modify its transnational investment strategies for supreme success in differing socio-political environments, allowing future success.ConclusionSingapore has, over the years, proven itself capable of mobilising economic, social, and political resources to create economic space, despite its resource constraints and junior-grade domestic market. Through regionalisation, it has managed to tap into the lower land, labour, and raw material costs of neighbouring NIEs in the region, ensuring its economic dominance through export of the Singapore Inc. concept throughout Asia and the world, making Singapore a top choice for transnational and local enterprises to do business today. The regionalisation strategy has therefore succeeded to a large extent in sustaining Singapores regional econo mic competitiveness since its onset, despite the cultural and political complexities of external economies diminishing the efficiency and commercial viability of overseas ventures in tandem with the uncontrolled external environment. These difficulties, however, are outweighed by the potential successes these ventures can bring if the Singapore government manages to learn from its errors, successfully creating an external economy which serves as a launching pad for Singapore into the global economy.