FAQ on the Singapore Economy
1. Why is Singapore, a matured and saturated economy, able to achieve sterling GDP growth?
Answer: Singapore's economy is driven by numbers, that is, billions worth of production from the oil and pharmaceutical industries. That is why economists look to NODX (non-oil domestic exports) to gauge the health of the export market. NOPE (non -oil and -pharmaceuticals exports) would be a better gauge.
These 2 sectors are among the best GDP number churners.
2. Why is Singapore's unemployment rate so low and yet there is no cheer from the people?
Answer: Singapore's low unemployment rate is a mirage because workers are too discouraged to look for work and hence they are not counted as unemployed. (Just compare: Japan's labour force participation rate is 79% whilst Singapore's is only 65%.)
3. Why is Singapore able to attract so much FDIs even when it is a high-cost location?
Answer: Singapore is able to attract FDIs because it is a tax haven. MNCs locate here under the aegis of RHQ and OHQ so that they do not have to pay taxes for many years to come.
4. Why is Singapore letting in the foreign workers?
Answer: ^GDP = f(^K,^L). GDP growth is a function of capital and labour. Labour is let in to dress up GDP growth.
5. Why is Singapore bent on spreading its external wing even in times of economic downturn?
Answer: If Singapore does not expand its external wing, the ratio of GDP/GNP will continue to widen.
6. Why are there so many hub aspirations?
Answer: Singapore requires at least 20 hubs if each does not contribute more than 5% to the economy. It is similar to spraying bullets at the target, hoping more will hit it.
7. What is EDB?
Answer: EDB is the marketing arm of Singapore. It's performance is measured by the amount of foreign investment attracted to Singapore.
8. If EDB is the marketing arm, where is the credit control arm to ascertain the quality of foreign investments?
Answer: Unfortunately, there is none.