SINGAPORE & THE WORLD IN PERSPECTIVE ICA 2

Question 1:
Describe TWO (2) challenges a Singapore company will encounter when setting up
a new business in India.

Cultural Challenge
Lack of Infrastructure Challenge

First of all, Singapore will encounter a culture difference challenge in India because
Indian businesses practices archaic corporate culture, where they transfer socioreligious hierarchical structures to their workplace. The Indian managers are
conventional, bureaucratic and a traditionalist.
Secondly, Lack of Infrastructure is a challenge for Singapore because India has poor
infrastructure that constrains growth. Although additional investments in roads,
airports and railways is announced, but spending is limited by the governments
budget deficit and the poor financing environment. Furthermore, companies may
have to deal with insufficient telecommunication infrastructure and coverage. Most
importantly, the lack of power may present problems for businesses operating in
India.
(110 Words)

Question 2:
Discuss any TWO (2) ways that United States (US) companies can benefit from
Foreign Direct Investments (FDI) in Singapore.
Money is free to be invested in the business that has the best prospects
As investors would always seek for the best profits for their money with the least risk
as possible. This does not involves religion or any form of government. It also has a
competitive advantage where it reduces the effects of politics and bribery. Resulting
the allowance of money flowing into the best businesses, bringing these goods and
services to the current market faster.
Receiving management, accounting or legal guidance
The US companies can benefit by receiving management, accounting or legal
guidance where they can also introduce and upgrade to the latest technology,
innovations, and new financing tools. This will also improves employees standard of
living and lifestyles in Singapore.
(123 words)

Question 3:
Briefly explain any TWO (2) ways by which the Euro debt crisis is affecting
Singapores trade with Europe.
Low Economics Correspondent
The Euro debt crisis is affecting Singapores trade with Europe, in which Singapore
could sink into a deep recession, resulting in a slowdown in trading with the
European Union. European Union is Singapores biggest trading partner, therefore,

Singapores trading with Europe will slowdown and causes an economy recession.
There will also be cost pressures where inflationary pressures rises.
Global Financial Market
It will be the same scenario to the aftermath of the collapse of US bank Lehman
Brothers in 2008 that impacted the global markets. Singapores trade finance with
Europe will be affected by the financial market retraction. This would also impact
Singapore dollar, and then it will lead to a slowdown in global demand.
(118 words)