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Social Studies- Chapter 2; Sustaining Economic Development.

Globalisation is the process by which people, their ideas and their activities in different parts of the world become interconnected or integrated.

Key Driving Forces of Globalisation:

1. Developments in transportation and communications: Globalisation could not have occurred without improvement in transportation and communication in technology. -Transport systems are the means by which people, materials and products are transferred from one place to another. Improvement in transportation technology has shrunk the world considerably in terms of time taken to get from one place to another. The use of the steam engine in the 19th century and the commercial jet aircraft, large ocean-going vessel and Containerisation greatly increased the movement of goods and people from one place to another. Containerisation has reduced the time and cost of moving goods over long distances and simplified the transfer of goods from one mode of transportation to another as containers can be easily transferred from ships and trucks. The increasing mobility of goods and people via the building of more efficient and integrated transportation infrastructure (airports, seaports, etc.) have made it possible for goods to be moved around easily and enabled people to travel easily and faster. - Communication systems are the means by which information is transmitted from place to place in the form of ideas, instructions and images. Improvement in technology has made communications among people in different locations faster and more convenient, such as through the use of tools such as the telephone and electronic mail, Satellite technology, optical fibre systems and the Internet. This technology allows Transnational Corporations (TNCs) to coordinate and control their worldwide activities easily.

2. Transnational Corporations (TNCs): TNCs are large global firms that operate in various countries and have production of service facilities outside the country of their origin. TNCs set up their operations around the world to source for new markets, lower the cost of production. TNCs are controlled and coordinated by the headquarters which are located in the country of origin and they source or components around the world before assembling the final product in another country. As such, economies around the world have become more integrated.

Singapores strategies to maximise opportunities and overcome challenges:

1.

Diversifying the economy:

-Singapore aims to be a centre for technology- intensive, high value-added manufacturing activities such as chemical engineering and pharmaceuticals and is venturing in the Life Sciences so as to attract TNCs to set up their high value-added manufacturing activities here such as Seagate. Organisations such as the Agency for science, Technology and Research (A*STAR) was set up to build up Singapores research and development capability and many research institutes have been set up by A*STAR to undertake research in different areas such as the Institute of Molecular and Cell Biology. By attracting more TNCs to set up manufacturing facilities in Singapore, more jobs are generated and this affirms Singapores position as a manufacturing hub. -Singapore aims to be a regional hub for services such as education and tourism. Leading international universities have set up branches in Singapore such as Stanford University. With the establishment of these educational institutions, Singapore will be able to create a strong university sector that attracts talent. -To generate further economic growth, Singapore promotes Tourism by building two integrated resorts built in Marina Bay to gain an advantage over stiff competition from neighbouring countries as a tourist destination. Countries in Asia have been developing their major tourist attractions, such as Hong Kongs Disneyland. By offering man-made tourist attractions, Singapore ensures it does not loose out to other countries in the region in attracting tourists, Additionally, when developers invest capital in the building of attractions such as the IR, jobs will be created for Singaporeans.

2. Nurturing growth of Small and Medium Enterprises: SMEs play an important role in Singapores economy as it makes up a large percentage of businesses. They are important providers of jobs and support operations of TNCs by supplying them with components in the manufacturing process. They enhance the attractiveness of Singapore as a regional manufacturing and services hub. Often, SMEs are unable to compete with big corporations as they have fewer resources, less expertise in using advanced technology to bring their operations up-to-date and family-run SMEs have a shortage of skilled professionals. They have a small domestic market and many do not have the capital to venture into overseas markets. As such, Singapore has many schemes in place to assist SMEs such as loan schemes and the Association of Small and Medium Enterprises to provide assistance to SMEs, such as providing training for members to enhance their capacity. New companies are also granted tax exemption by the government on their first $100,000 income for up to three years.

3. Venturing Abroad: Due to limited land and labour resources, Singapore has to look overseas to achieve further growth. Regionalisation is the investing in nearby countries that have abundant land, lower labour costs and new markets, The Singapore government and Singapore based markets provide expertise and capital to develop industrial parks in host countries and in return, host countries provide land and labour for Singapore companies. For example, in the late 1980s, a group of Chinese delegated visited Singapore to learn hoe the country economic success within a short period of time while Singapore firms set up businesses in the Suzhou Industrial Park. Such cooperation benefits countries involved and promotes development on the region. Singapores

Singtel group has ventured abroad into overseas markets and Singapore has decided to invest in the Middle East, Africa, Latin America and Central and Eastern Europe. This spread of investment across the world is to ensure that Singapores economic growth is maintained even if the markets and investment opportunities in one particular region are awakened. However, by investing abroad, many Singaporeans may relocate overseas and lose touch and attachment to Singapore. Hence, there is a concern of Singaporeans feeling less emotionally rooted to Singapore as they venture abroad.

4. Expanding market reach through economic cooperation: Due its small population, Singapore has a small domestic market. Thus, there is a need to establish trade ties with countries around the world to enable local companies to sell their goods to a larger market. Governments can sign Free Trade Agreements, (FTAs) which is a legally binding agreement between two or more countries to bring about closer economic collaboration. Singapore has also cooperated with other countries in the setting up of Special Economic Zones (SEZs) which is a geographical region in a country that has less stringent economic laws than those in other parts of the country. They function as zones of rapid economic growth by using tax business incentives to attract foreign investment. An example would be the economic agreement between Singapore and Indonesia to revitalise the islands of Batam, Bintan and Karimun. This promises to bring the two countries closer together and boosts businesses in both countries.

5. Managing Resources Efficiently: Singapore lacks natural resources and its people are its most precious resource. Thus, there is a need to take care of the natural environment so that future generations can continue to enjoy the clean and green environment enjoyed by the present generation. -Developing people: Promoting local entrepreneurship and technopreneurship: In a globalising world, business competition increases, Therefore, Singapore needs more local entrepreneurs who are willing to take risks in their business ventures and come up with new products to compete with foreign companies. Singapore amended bankruptcy laws to allow entrepreneurs who have failed to start a business again. Giving recognition to outstanding local entrepreneurs who have struggled and succeeded inspired more entrepreneurs to achieve greater success. Promoting Continuous learning among the workforce: As Singapore become more globalised, some jobs will become obsolete and be replaced by other jobs. The Singapore workforce Development Agency (WDA) was established in 2003 to ensure that the workforce remains competitive and created opportunities for workers to enhance their employability through skills upgrading. An example of a programme offers is the Employability Skills Systems ESS that equips the workforce with skills that will enable workers to better adapt to new job demands and changing work environments, It also provided financial assistance to employers to encourage them to train and upgrade the skills of their workers.

-Attracting foreign talent: Singapore experiences a declining birth rate and requires new skills in a knowledge-based economy. There is thus a need to attract foreign talent to meet manpower needs. Foreign talent brings along overseas business contracts and will help create more business opportunities and jobs in Singapore. It also adds diversity and makes the country more cosmopolitan. Singapore attracts foreign talent with both good paper qualification and those who possess specialised skills. -Managing the Environment: Environmental degradation is often a consequence of globalisation. It is crucial to protect the environment and environmental preservation is one of the three pillars of a sustainable development (Others: Economic development and social progress) Managing Limited land resources; Singapore is a small country with only 680 sq kilometres in area. Thus there is a need to have proper planning for land use. With careful land use planning, high standard facilities for housing, transportation, recreation, commerce defence and education can be built. These facilities will enable Singaporeans to enjoy a good quality of life and ensure that Singaporeans can sustain growth in a globalising world. Example: The Downtown at Marina Bay that will be a financial hub integrated with quality housing as well as recreational and leisure activities. There is also a need to preserve nature sites to ensure future generations can enjoy the natural environment. Land is set aside as nature sites. Land is also allocated for waste disposal, such as the offshore Pulau Semakau. Cooperation with regional and international organisations: Singapore helps solve regional and international environmental problems and has cooperated with ASEAN on environmental matters such as the haze, Singapore has helped Indonesia detect forest fires and haze using satellites and hosted the ASEAN Ministerial Meeting on Haze do discuss measures to combat the problem. Singapore also looks into environmental problems that are global in nature, and has phased ou the use of chlorofluorocarbons. Public Education: Students in schools are encouraged to take part in recycling and waste minimisation programmed and there are programmed to educate the general public. For example, the Clean and Green Week is an annual campaign that tries to educate people on environmental issues. This education is essential to ensure that Singapores environmental protection to be effective in the long run and to instil a sense of responsibility and personal interest in the people to keep their surroundings clean.