7_Globalization

7_Globalization

1. Strategies to maximise opportunities and overcome challenges

   • Venturing abroad
     • To achieve further economic growth as Singapore has limited land and labour resources
     • Achieved through investing in nearby countries that have abundant land, lower labour costs and new markets
     • Singapore Government and Singapore based companies provide expertise and capital to develop industrial parks in other countries
       • In return, host countries will provide land and labour for Singapore companies
     • The International Tech Park in Bangalore, India and Singtel group are examples of Singapore's ventures abroad
     • Important and effective strategy
       • Spreading investment across the world ensure Singapore's economic growth is maintained even if markets and investment opportunities in one particular region weakened
     • Focusing on opportunities elsewhere sustain Singapore's economy development as it opens new markets and allow us to overcome our physical limitations such as small land area
   • Expanding market reach through economic cooperation
     • Government signed Free Trade Agreements (FTAs) with other countries
       • enable local companies to sell go larger market
     • FTAs benefit local companies as they will enjoy cost savings as taxes are removed
     • Companies able to sell goods in other countries to increase their profits
     • FTAs ensure survival of local companies
     • Singapore cooperated with other countries in the setting of Special Economic Zones (SEZs)
       • Example: Singapore and Indonesia set up SEZ in Riau to revitalize the islands of Batam, Bintan and Karimun
         • This zone has less stringent economic laws that help to draw investment and boost economic growth in the area
     • SEZs help to make Singapore more competitive and attractive to foreign investors
     • Important and effective strategy
       • Coopertation can boost business in both countries, leading to further economic growth