Comparing and Contrasting 3 Economic Systems

In this Report, the Economies of Norway, USA and Singapore will be covered. Key indicators,
key economic questions and how their economic systems will be discussed. Each country
will be introduced by their individual economic systems. It will be concluded with a compare
and contrast report of the three different economies.

Norway’s Economic System

Student: Meera

1. An economic overview of Norway:

Norway is an independent Scandinavian country

located in Northern Europe with a population of
about 5.2 million people. Its capital city is Oslo
(the third biggest city in Scandinavia) with
660,000 inhabitants. The country is governed by
a constitutional monarchy (guided by the
King’s/Queen’s laws), while the Parliament and
Government hold the power (Norway Facts for
Kids).

From being a colony of Denmark since the late

sixteenth century, fighting many wars and serving
as a German colony during World War II, Norway Figure 1: Norway's location on the globe (Spannknebel)
has experienced huge economic growth and is now
the 6th richest country in the world as measured by gross domestic product per capita. The country
discovered offshore oil and gas in the late 1960’s which is what primarily contributed to its economic
success. It’s one of the world’s biggest oil exporters and its petroleum industry makes up for 12% of
its GDP.

Since 1994, Norway has not been a part of the European Union (EU). However, they are still part of
the European Economic Area and largely contribute to the EU’s Budget. Norway follows what we call
a “mixed economy” with an active private sector but also a large influential state sector (Norway).

2. What characteristics of a planned economy and free market does Norway use and how are
key economic questions answered?

A planned economy, also known as a command economy is where the government controls the
productions and pricing of goods and services. Whereas, a free market, is constructed on the
potential of supply and demand, with minimal or zero government interference. The Norwegian
economy is a well-developed mixed economy – a free market economy with a large component of
state influence in strategic areas.
The growth of Norway’s industry has largely depended on the private sector as the industrial sector is
primarily under private ownership. Agriculture and fisheries are also mainly owned by the private
sector, apart from the 10% of productive forestry land which is owned by the state. Nevertheless,
Norway’s biggest petroleum/oil corporations such as Statoil and Norsk Hydro are largely under state
ownership. Their public sector is one of the biggest in the world as a percentage of their GDP. The
state also has a significant share in the ownership of hydropower stations and electricity plants.
Taxation, duties and subsidies come within the purview of state administration. They also manage
licensing plans and different aspects such as the work environment, accounting procedures, pollution
and products. However, in the 1990’s, ownership of the state industry shifted their focus on financial
investments. However, the Norwegian government is slowly reducing state ownership in most
companies to stay with the global trend of deregulating and privatizing state-owned companies. As a
result, the previously owned state companies which were near monopolies are now being subjected
to competitive pressure. Also, to combat pressure on the country’s GDP which as a heavy
contribution from the oil sector, the Norwegian government is trying to focus on other industries to
avoid any problems that may be brought on by reduction in world oil prices or demand (The
Norwegian Mixed Economy).

3. Key indicators of Norway’s economy

GDP (ppp) $379.5 billion (2017 est.)

GDP- composition by sector
Agriculture 2.4% (2017 est.)
Industry 31.1% (2017 est.)
Services 66.5%(2017 est.)
GDP- growth rate 1.4% (2017 est.)
GDP- per capita (ppp) $70,600 (2017 est.)
GNI (ppp) $337.9 billion (2017 est.)
GNI- per capita (ppp) $63,530 (2017 est.)
Gini index (distribution of family income) 26.8 (2010)
Unemployment rate 4% (2017 est.)
Life expectancy rate 83 years (2017)
Inflation Rate 3.1% (2019)
Debt $642.3 billion (2016 est.)
Main Import Partners Germany 12.2%, Sweden 12.2%, China 11.2%,
U.S 6.6%, Denmark 5.5%, UK 5.2%,
Netherlands 4.1% (2016)
Main Export Partners UK 21%, Germany 14.4%, Netherlands 10.7%,
France 6.9%, Sweden 6.5%, Belgium 4.4%, U.S
4.3%, Denmark 4%

4. Norway and it’s GDP

Norway’s GDP amounted to $379.5 billion in 2017 which is well on its way to recovery after the sharp
drop in 2015 due to beaten down oil prices (Norway Economy Profile). In percentage terms, the GDP
growth was about 1.5% in 2017 and this was mainly due to domestic demand which in turn was
pushed up due to higher employment rates and friendly tax policies of the government. Going ahead
the economy is expected
to either remain constant
or improve slowly. In
terms of sector
contribution, more than
66% of the total GDP
comes from the services
sector of which 20% is
government owned. The
industry and agriculture
sector contribute 31.1%
and 2.4%. Since Norway
is amongst the top 5 Figure 2: GDP trend from 2009-2017 for Norway (Norway)
exporters of crude oil
globally, 22% of its GDP comes from oil and gas trade (this accounts for 67% of Norwegian exports).
The economy of Norway is mostly driven by the production and extraction of North Sea oil (Norway
Economy 2019).

5. Export Destinations and Products

Norway is the 30th biggest exporter in

the world with a positive trade balance
of $21.2 billion in net exports.
However, in the last 5 years, Norway’s
value of exports has suffered from a
great fall, at a yearly rate of 14.4%
(from $159 to $89.4 billion) mainly due
to a drop-in oil prices.

Norway’s main export destinations are

the UK, Germany, Netherlands, France
and Sweden (as mentioned in the table
above). Their major exports include
Crude Petroleum and Petroleum Gas
accounting for $22.8 billion and Figure 3: Record high exports for Norwegian gas (Ministry of Petroleum and
$20.7 billion annually, followed by Energy)
Fresh Fish ($6.4 billion), Raw
aluminum ($2.42 billion) and Fish Fillets ($1.71 billion). Altogether, Petroleum accounts for 52.6% of
the country’s exports; Germany and the UK being significant consumers for Norway’s Petroleum
(almost 67% of this product’s total exports). In addition, Norway is the third largest exporter of fresh
fish after Sweden and the fourth biggest Aluminum exporter in the world (Pines).

Import Origins and Products

Norway is ranked the 35th largest

importer in the world as of 2017, with
imports totaling $84.8 billion. However, in
the last five years their imports have
decreased at a yearly rate of -0.8%,
dropping from $88.4 billion in 2012 to
$84.8 billion in 2017.

The top imports to Norway come from Figure 4: Norway's Top 5 Import Origins (shown in
Sweden (12%) with a value of $10.1 percentage)(Kapoor)
billion, Germany (11%) with a value of
$9.6 billion, China (9.6%) with a value of
$8.17 billion, South Korea (6.7%) with a value of $5.71 billion and the United States (6.5%) with a
value of $5.5 billion. Cars make up 7.4% of Norway’s imports, with other significant imports being iron
structures (4.8%), refined petroleum (2.7%), broadcasting equipment (2.0%), packaged medicaments
(1.9%) and furniture (1.3%) (Norway OEC). Norway export more than they import, resulting in their
positive trade balance of $21.2 billion.

6. Income inequality

Income inequality in a country the uneven distribution of income across various working and non-
working classes of the total population. A statistical measure was developed by an Italian statistician
to measure economic inequality and is referred to as the Gini coefficient. It can range from 0-1 or 0%-
100%,
representing
equality and
inequality.
Hence, a
coefficient that is
closer to 0 is
desirable as it
represents less
inequality
(Kenton).

The statistics
agency of
Norway has Figure 5: Income inequality trend from 2004-2016 for Norway (Norway- Gini Index)
highlighted that
income
inequality in Norway is growing and the gap is more in the public sector than in the private sector.
One of the reasons for this, is that the salaries for top executive business men have increased
tremendously. Higher wages are almost four times more than lower wages for 37.5 hours per week (a
standard work week in Norway). Over the last two decades, the salary gap in Norway has increased
faster compared to other OECD (Organization for Economic cooperation and development) countries.
In 1997, the top 10% salary earners had 2.8 times more than the ones in the lowest 10% salary
earners. However, by 2017 this difference increased to 3.8 times. The public-sector Gini coefficient
from 2008-2017 increased by 21.4% as compared to 7.7% over the same decade. The Gini index for
2016 was 27.5, the most it’s been in 10 years (Bazilchuck).

7. Inflation

Inflation is an indication of increase in the prices of goods and services consumed by an economy. In
Norway, the average inflation rate has hovered around the 3% mark over the last 60 years. Currently,
the inflation rate is around 3.1% (as of January 2019), which exceeds Norges Bank’s target rate of
2.0%. This is because prices for food, beverages, tobacco, housing, water, electricity and gas all
increased. However, compared to the end of 2018, consumer prices took a fall of 0.5% in January
2019. The main cause for this drop, was the decline in the prices of clothing and footwear. In the
future, the inflation rate in Norway is expected to go down to 1.9% in 2020, according to Trading
Economics
(focuseconomics).
Figure 6: Inflation rate trend in 2018 and 2019 for Norway (Norway Inflation Rate)

8. Taxation system

Norway is one of the

most heavily taxed
countries in the world
with a taxation burden of over 35%. It follows a progressive taxation system that is influenced by a
socialist principle that “everyone should pay tax according to their means and receive services
according to their needs” (Black). In order for the tax burden to be perceived as fair, everyone in
Norway, pays tax according to their ability to pay. The taxes that are collected from individuals and
businesses are used to provide public services such as hospitals, education, transport and
infrastructure. Such a tax system is used to promote greater equality amongst the population (Tax in
Norway).

9. Norway’s Response to the 2008 crisis

In 2007/2008, the global economy went into a recession triggered by the US economy’s housing
market crash. However, the Norwegian economy experienced a somewhat moderate decline in their
economy compared to other European economies and especially compared to the American
economy. The GDP of Norway (excluding petroleum contribution) decreased by 1% in the first quarter
of 2009 and 0.8% in the last quarter of 2008 as compared to the U.S which contracted by 6.1% in the
first quarter of 2009. The reason that the effect of the global recession on Norway was muted is
because of its gains from its oil and natural gas sector through direct taxes as well as from the
investments it receives for its petroleum projects. The country had done well by saving and
strengthening its sovereign fund. However, private sector business investments did get affected due
to higher interest rates and lesser availability of loans (Saltmarsh).

Work cited:

Bazilchuck , Nancy. “Strong Increase in Norwegian Pay Gap.” Science Nordic, 5 Jan. 2019,
sciencenordic.com/strong-increase-norwegian-pay-gap.

Black, Simon. “Why Norway Is a BS Argument for Higher Taxes.” Sovereign Man, 15 June
2017, www.sovereignman.com/lifestyle-design/why-norway-is-a-bs-argument-for-
higher-taxes-8235/.

Kenton, Will. “Gini Index.” Investopedia, 6 Feb. 2019, www.investopedia.com/terms/g/gini-

index.asp.

“Norway Economy 2019.” Countries of the World ,

theodora.com/wfbcurrent/norway/norway_economy.html.

“Norway Economy Profile 2018.” Index Mundi,

www.indexmundi.com/norway/economy_profile.html.

“Norway Facts for Kids .” Kids World Travel Guide, www.kids-world-travel-

guide.com/norway-facts.html.

“Norway Inflation Rate (CPI, Eop) - FocusEconomics.” Focus Economics , www.focus-

economics.com/country-indicator/norway/inflation-eop.

“Norway.” Forbes, Forbes Magazine, Dec. 2018, www.forbes.com/places/norway/.

“Norway.” OEC , atlas.media.mit.edu/en/profile/country/nor/#Imports.

Pines, Lawrence. “Norway's Top Commodity Imports & Exports.” Commodity.com, 28 Sept.
2018, commodity.com/norway/#More_Information_on_Norways_ImportsExports.
Saltmarsh, Matthew. “Norway Slides Into
Recession.” The New York Times, 19
May 2009,

www.nytimes.com/2009/05/20/business/global/20kroner.html.

“Tax in Norway.” The Norwegian Tax Administration ,

www.skatteetaten.no/en/person/foreign/are-you-intending-to-work-in-norway/tax-in-
norway/?nav-veiviser=12928.

“The Norwegian Mixed Economy.” SPCC, Scandinavian-Polish Chamber of Commerce,

www.spcc.pl/en/node/12021.

Figures:

Figure 1: Spannknebel, Dieter. “Shape And Ensign Of Norway On A Globe .” Photos.com by Getty Images,
photos.com/featured/shape-and-ensign-of-norway-on-a-globe-dieter-spannknebel.html?product=wood-print.

Figure 2: “Norway GDP.” Trading Economics, tradingeconomics.com/norway/gdp.

Figure 3: Ministry of Petroleum and Energy. “Gas Exports from the Norwegian Shelf.” Government.no,
www.regjeringen.no/en/topics/energy/oil-and-gas/Gas-exports-from-the-Norwegian-shelf/id766092/.

Figure 4: Kapoor, Meera. “Norway’s Top 5 Import Origins.”

Figure 5: “Norway - GINI Index.” Trading Economics , TRADING ECONOMICS, tradingeconomics.com/norway/gini-

index-wb-data.html.

Figure 6: “Norway Inflation Rate.” Trading Economics, TRADING ECONOMICS,

tradingeconomics.com/norway/inflation-cpi.

The USA’s Economic System

Student: Etienne

Introduction to the United States of America:

The U.S is a country that has 50 states with the capital being Washington, DC and its population
being 325.7 million in 2017. The United States is the third largest country in the world by its total
area. Surrounding the U.S is the Pacific Ocean and the Caribbean Sea. Because of its differing
climate, and wildlife it is known to be one of the worlds 17 megadiverse countries.
Figure 1: “United States Map and Satellite Image.”
The United States economy has three main
parts which are, consumers, businesses, and government. Discouraged with the political and
economic conflict of England, the colonists banded along to forge a replacement nation: The U.S
of America. The strive for Britain to have independence is what terminated the Revolutionary
War (1775-1783), was driven by economic and political motivations, together with the need for a
larger self-governance and tax relief (Overview).

Introduction to The United States Economy:

The U.S. economy represents regarding about two hundredth of the total international output,
and continues to be larger than China’s. It is known to have the sixth highest GDP per capita,
which in 2017 was recorded to be 59,501 GDP per capita (Donerston). The U.S economy is
commanded by services-oriented firms in areas like technology, money services, tending and
retail. Large U.S companies additionally play a significant role on the world stage, with over a
fifth of firms on the Fortune international five hundred returning from the U.S.

Introduction to The United States Economic System:

The U.S has a mixed economy which means a financial set-up protects holding and permits grade
of economic freedom within use of capital, but it also means the government can interfere in
economic actions so they as a country can reach their goals for society. The U. S’s government
does control a lot of America’s services such as the roads, education, courts, medical care and
post services (Ross). If you want to start up your own private business you must inform the
government and register so most of the businesses in the U.S are approved by the government.
Nearly each style of business and each sort of economic exchange is stricken by government
policy within the U.S.

Key Statistics:

Population 325.7 million (2017)

Gross Domestic Product (GDP) 19.39 trillion USD (2017)
GDP per capita 59,531.66 USD (2017)
Gross National Income (GNI) 19.61 trillion PPP dollars (2017)
GNI per capita 60,200 PPP dollars (2017)
Inflation rate 1.9% (2018)
Life expectancy 78.69 years (2016)
Employment rate 304,000 (January 2019)
Unemployment rate 4.0% (Jun 2018)
Main Importers (in order) China, Canada, Mexico, Japan and Germany,
etc.
Main Exporters (in order) Canada, Mexico, China, Japan and the United
Kingdom, etc.

Key Economic Questions (which apply to every country)

 What are the goods and services and how much of each do they have to produce?
 How to produce them?
 For whom do they produce?
 Who owns and controls the factors of the production?
What are the goods and services and how much of each do they have to produce?
In the U.S most of the goods and services are produced by privately owned firms. Many of the
firms if they are successful earn profits for their owners, they obtain the possibility of losing
money if the firm tries to sell the product and it is not purchased by the consumers at prices that
will be able to cover the costs of the productions. Most of the businesses within the U.S work
under at least one of these contractual modes: partnerships, corporations and sole
proprietorships. The United States in 2017 exported over $2.3 trillion worth in goods and
services (Amadeo). It is possible for the United States to be able to export a lot more goods and
services because only one percent of America’s businesses export. Capital merchandise square
measure the foremost fortunate export class. That’s because of U.S based firms perceive the
wants of different transnational corporations. Of the $533 billion in capital merchandise
exported, sixty-four p.c is from six classes (Amadeo).
Figure 2: Exports and products produced in the U.S (Ecealptunaer)

How to produce them?

The United States is said to be the second largest
manufacturer in the world with the first being
China. Manufacturing is a crucial part of GDP.
The more that they are
producing/manufacturing it adds value to the
power of their economy which is then benefitting
them. In 1970, the manufacturing industry was a
much larger part of the U.S economy. In 2018, it
was $2.33 trillion which in 1970 was said to be
double that. Businesses have said that when the capital growth and higher exports increases it
will then increase manufacturing. It conjointly depends on the clout of the U.S dollar. If the
greenback turns it down, that will benefit the exporters. However, the FED is increasing interest
rates which then produces the greenback stronger. The U.s earns most of their money from
producing gas and oil.
Figure 3: Trade balance (AnixxAnixx)
President Donald Trump has a huge impact ))politics.stackexchange.com/questio
on the Manufacturing in the U.S. He guaranteed that ns/6158/what-does-the-us-produce.
he would make jobs go back to producing.
He conveyed on his secure tac cut for the for U.S makers and better cost for people who build
overseas. He should create these encouragements adequate to the extra value of the U.S
producing. Otherwise, it will not be enough to give back the jobs. President Donald Trump’s job
establishment set up aims to make twenty-five million jobs within the next ten years.

For whom do they

produce?
Most of the U. S’s produces
go to Mexico or Canada. It is
said that the U.S distributes
their produces equally so not
to one place in particular.
Most of the time it isn’t
distributed equally as other
countries can get in line early
which can sometimes have a bias aspect to it. So, some countries can get more than their share
and others can get nothing. It was estimated that in 2018 Mexico (which is the highest importer
for Americas produces) imported $182 billion worth of goods from the U.S. One of the main
exports of the U.S are cars which are mostly then shipped off to China which is where they then
sell them for the business to earn money and to continue producing. It is said that the U.S also
imports many vehicle parts and cars to Canada as they have a big car industry in Canada and is
most of the time where they can earn the most amount of money.
Who owns and controls the factors of the production?
The four aspects of production area unit land, labour, capital, and entrepreneurship. They’re the
inputs required for offer. They turn out all the products associated services in an economy. These
factors are controlled by individuals which means that the production of the products created in
the U.S is not controlled by the government but individuals. The main factor out of these for is
Capital within the U.S because of the amount of automobile companies that build factories and
create parts of cars out of different machines. It is estimated that half of the capital goods are
created by private businesses which means it’s not signed with the government. There are many
firms in the U.S which means that it’s a huge part of the production (Pintura).

Inflation rates:
This data point shows the annual rate of
inflation within the U.S from 2010-2017 with
further prolongations up to 2023. The
information represents U.S town averages. The
bottom amount was 1982-10984. In economic
science, the rate of inflation may be a
mensuration of inflation, the speed of growth
of an indicator. It’s the proportion ate of
modification in costs level over time. The speed
of decrease within the buying power of cash is
close to equal. In keeping with the forecast, costs can increase be 1.62% in 2017. If there is a big
drop of the inflation in a country it can be dangerous to the economy of the country because if it
is to get lower it can decrease the population’s
purchasing power (U.S). Figure 4: Graph of inflation rate (U.S)

Income inequality:
In the U.S it is said that the rich are continuing to get richer and the poor and continuing to get
poorer. The U. S’s Gini index is 41.5 which was recorded in 2016. In the U.S the place with the
most income inequality is New York but income inequality is widely spread across the whole of
the U.S. Income inequality went downhill from the Great Depression. Every state declined the
share of income that was controlled by the top five percent (Reinicke).

Taxation system:
The taxation system in the U.S both federal
level and state level. The U.S taxation system
is known to be quite complexed. There are
many different types of taxes which are sales,
income, capital gain, etc. Income tax is
maybe one in all the foremost renowned types of taxation. If anyone is to earn financial gain
within the U.S they’ll see the deductions on your bank check. Everyone within the World Health
Organization earns financial gain within the U.S
is meant to pay revenue enhancement on each Figure 5: (“LibGuides”)
the federal and state level. Another very popular form of tax is sales tax, this is when you are to
purchase something there will be an added amount to what you buy. In certain parts of the U.S
some items have tax and some don’t but it’s according to the state.

US’s response to 2008 financial crisis:

The U.S government had a good idea and made truce that it wasn’t allowed and took a minimum
of many actions that may fairly be delineated as outside the law. The temperament to create
unplanned selections while not clear legal underpinnings displeased a lot of the U.S residents
because of the importance of the rule of law, and that the legal defects may be a serious supply of
public criticism. In general, though the U.S government response to the monetary crisis and its
repercussion within the real economy are amazing. Coordinated central banking interference,
direct quotations of presidency capital into monetary establishments, and big business enterprise
stimulation are simply several the actions that have been taken place in the last couple of
months. The potential impact on business is big and still is too emergent for anyone to
completely comprehend.

Work-cited:

Amadeo, Kimberly. “What Will the Economy Do in 2019 and Beyond?” The Balance Small
Business, The Balance, www.thebalance.com/us-economic-outlook-3305669.

Amadeo, Kimberly. “Why Isn't America the World's Largest Exporter?” The Balance Small
Business, The Balance, www.thebalance.com/u-s-exports-top-categories-challenges-
opportunities-3306282.

AnixxAnixx 6. “What Does the US Produce?” Politics Stack Exchange,

politics.stackexchange.com/questions/6158/what-does-the-us-produce.

Donerston, Bill. “Economic Indicators, News and Forecasts -

FocusEconomics.” FocusEconomics | Economic Forecasts from the World's Leading
Economists, FocusEconomics, www.focus-economics.com/.

Ecealptunaer. “The Four Basic Economic Questions Are 1 What Goods and Services and
How Much Of.” The Logistic Model Has Good and Bad Features PROS CONS
Mathematically Tractable, College Life, www.coursehero.com/file/p7vmd0f/The-four-
basic-economic-questions-are-1-what-goods-and-services-and-how-much-of/.

Filtration Sterilization,
www.rpi.edu/dept/advising/free_enterprise/us_government/taxation.htm.

“LibGuides: Financial Crisis of 2008: Treasury & Fed.” Sustainable Design Principles -
Sustainable Product Design - LibGuides at University of Illinois at Urbana-
Champaign, guides.library.illinois.edu/c.php?g=347931&p=2345515.

Overview.", "The U.S. Economy: Historical. “The U.S. Economy: Historical Overview.” The
Columbia Encyclopedia, 6th Ed, Encyclopedia.com, 2019,
www.encyclopedia.com/economics/economics-magazines/us-economy-historical-
overview.
Pintura Del Alto Renacimiento,
www.voyagesphotosmanu.com/factors_of_production_US.html.

Reinicke, Carmen. “In the US, the Rich Are Getting Richer and the Poor Are Getting Poorer,
Study Concludes.” CNBC, CNBC, 19 July 2018, www.cnbc.com/2018/07/19/income-
inequality-continues-to-grow-in-the-united-states.html.

Ross, Sean. “Is the United States a Market Economy or a Mixed Economy?” Investopedia,
Investopedia, 15 June 2018, www.investopedia.com/ask/answers/031815/united-states-
considered-market-economy-or-mixed-economy.asp.

“United States Map and Satellite Image.” Geology, geology.com/world/the-united-states-of-

america-satellite-image.shtml.

“U.S. - Projected Inflation Rate 2008-2023.” Statista, Statista,

www.statista.com/statistics/244983/projected-inflation-rate-in-the-united-states/

Singapore’s Economic System

Student: Marlene

Introduction

Singapore is an island city-state in south east Asia, off southern Malaysia. It is

about 710 square kilometers with 5 million inhabitants of Malay, Eurasian,
Chinese (majority) and Indian. Since Singapore gained independence from
Malaysia in 1965, they have embraced a parliamentary democracy system
(Pretoria). Singapore follows the free-market economy, which is very
successful and highly developed. Singapore has an open and corruption free-
environment with stable prices and its GDP per capita is one of the highest.
Singapore has also been ranked as the second richest country in the world,
with their 2.7% growth in GDP in the first quarter of 2017 (Fortune). From then
on the GDP percentage has been growing and Singapore is evolving. The
economy heavily depends on imports and exports and is a main trading port in
South-east Asia (Indexmundi).

What elements from the free-market or planned economy does Singapore

use?
Singapore strongly follows the free-market practices and policies but there are
a few planned economy elements that Singapore uses. Government
intervention is seen in major factors of production, such as labor, land and
capital resources and macroeconomic management (Economywatch).
Singapore’s economy is a huge triumph due to its transparent legal framework,
fiscal and prudent monetary policies, and its corruption free business market.
The Singaporean government is prudent in execution of an active industrial
policy to advocate economic development and diversity, which is attending
concerns about business, through targeted fiscal incentives and important
public investments (Min, Chia Yan).

Key Economic Questions

-What Singapore is going to produce?

-How are they going to produce it?
-Who makes the decisions?

The Singaporean Government has three parts; the Executive, the Judiciary and
the Legislature. The Judiciary explains the law through the Courts, the
Legislature makes the laws of the land and the Executive manages the law
(Parliament.gov.sg). The Singaporean people do decide what they want to
make or build, but the Government has a final say and certain objectives that
the business/etc, needs to meet to be able to start their business and/ or sell
their product.

If for example you want to build a school, the Singaporean government will
allow you to do so but they do get involved. The government sets targets for
your school to meet by a certain year. For example, the government sets a goal
that your school must have at least 2000 students by 2020 or must get 500
new applications for new students.

Main Trading Partners

1. US $54 billion: China (14.5% of total Singaporean exports)

2. US $46 billion: Hong Kong (12.3%)
3. US $39,6 billion: Malaysia (10.6%)
4. US $28 billion: Indonesia (7.5%)
5. US $24.2 billion: United States (6.5%)
6. US $17.1 billion: Japan (4.6%)
 7. US $16.7 billion: South Korea (4.5%)
8. US $16.6 billion: Taiwan (4.4%)
9. US $14.7 billion: Thailand (3.9%)
10.US $12.3 billion: Vietnam (3.3%)
(Workman, Daniel)

Import and Export

Singapore mainly depends on exporting and importing goods from different

countries all over the world. Singapore spends a total of $294 billion dollars on
their imports. Its main imports are Integrated Circuits (19.7%), Refined
petroleum (15.2%), Crude petroleum (6.7%), Gold (4.1%), computers (2.4%)
and many more as seen in figure 1 below:

Figure 1: Singapore Imports (Atlas.media)

Figure 2: Singapore Exports (Atlas.media)

In figure two, the diagram shows the percentage of the total $321 billion
dollars, that Singapore uses on their exports. Singapore’s main exports are
integrated circuits (36%), refined petroleum (13%), gold (3.2%) and computers
(2.3%).

Symbol explanation in figures one and two:

one: Animal and Vegetable Bi-products
two: Animals hides
three: animal products
four: arts and antiques
five: chemical products
six: Foodstuffs
seven: Footwear and Headwear
eight: Instruments
nine: Machines
ten: Metals
eleven: Mineral products
twelve: Miscellaneous
thirteen: Paper goods
fourteen: Plastics and rubbers
fifteen: precious metals
sixteen: stone and glass
seventeen: textiles
eighteen: transportation
nineteen: vegetable products
twenty: weapons
twenty-one: wood products

Sanctions
Sanctions is a method of how the government restricts themselves from
trading or having any relations with certain countries. Singapore doesn’t have
any sanctions. Singapore trades with many countries globally and so they don’t
need any restrictions.

Export destinations
Figure 3: Singapore Export Destinations (Atlas.media)
Singapore’s main export destinations are Hong Kong (19%), China (16%),
Malaysia (8.9%) and Indonesia (5.6%).

Import Origins

Figure 4: Singapore Import Origins (Atlas.media)

The main import origins for Singapore are China (15%), Malaysia (12%), Other
Asia (8.6%), South Korea (6.2%) and Japan (6.0%).

Explanation of symbols in figure 3 and 4:

Yellow: Africa
Brown: Antartica
Red: Asia
Purple: Europe
Blue: North America
Orange: Oceania
Green: South America
Key Statistics

Population:
5,638.7 million people (Singstat.gov)

GNI:
$508.3 billion PPP dollars (Data.worldbank)

GNI per capita:

$90,570 PPP dollars (Data.worldbank)

Adult Literacy Rate:

97.05% (Countryeconomy.com)

Life Expectancy Rate:

82.2 years (Data.worldbank)

Inflation rate:
The inflation rate decreased to 0.4% in January from 0.5% in December.
Continuing in 2019, the expectations for the core inflation is set at 1.5% to
2.5% and expect the inflation rate to average to 1.2% and 1.4% in 2020. At the
moment Singapore has an inflation rate of 0.4%, which can be looked at as
being good and bad. The reason for this, is that a stable and good inflation rate
usually varies from 1.8% to 3%. This shows that the country has a stable
economy. But Singapore has a very stable economy so having 0.4% is good for
the Singaporean economy and shows that the prices are slowly increasing each
year (Focus-economics.com).

Unemployment rate:
Figure 5: Unemployment rate in Singapore (Statista)
The graph above figure 5, shows the unemployment rate in Singapore from
2007 until 2017. In 2017, the unemployment rate was at 2.02%. The
unemployment rate in 2019 is at 2.20%. It increased from 2.10% in the fourth
quarter of 2018 (Tradingeconomics).

Employment rate:
1.2% (Statista)

GDP: US $323.91 billion (Tradingeconomics)

The key elements of Singapore’s GDP are Goods Producing Industries such as
Manufacturing, construction and utilities at 26.1%, Service Producing
Industries such as Finance & Insurance, Business services, Information &
communications, Wholesale & Retail trade and Food service &
accommodations at 58.9% and Ownership of dwellings (3.5%) and other
services industries (11.5%) (Singstat.gov).

GDP per capita: US $57,714.30 (Data.worldbank)

GDP per capita is the division of the country’s gross domestic product by its
population, which makes it the best measurement for a country’s quality of
living. For each month US $57,714.30, is US $4,809.525.

Singapore’s response to the economic crisis in 2008

Singapore was the first country in East Asia to undergo recession due to the
crisis. In response to this, in November 2008, the Singaporean government
gave $2.9 billion to workers and businesses to help handle the recession. In
addition, the government pledged $20.5 billion in a Resilience Package. This
was in January 2009. The package contained five factors; the first one being $5
billion to preserve citizen employment. Secondly, $5.8 billion to encourage
bank lending and thirdly $2.6 billion to enhance Singapore’s competitiveness
and support business cash-flow. The fourth part was $2.6 billion to support
communities and families. The final component was $4.4 billion allocated for
infrastructural spending. The Resilience Package helped Singapore through the
global economic crisis. Singapore was able to pay these billions of dollars due
to their sovereign fund (Channelnewsasia). Therefore, by late 2009, Singapore
had already rebounded back and in 2010 had a GDP growth of 15%
(lkyspp.nus).

Income inequality
The gap between the richest and the poorest people in Singapore is widening.
In 2007, the monthly income of the richest 10% grew from $8,571 to $13,215
in 2017. But the monthly income of the poorest 10% grew by $219 in the same
amount of time. The income gap grew by 54% in 2017. However, the lowest
income groups experienced the fastest growing income in percentage terms.
Lowest-income earners experienced 65%-77% growth since 2007, while the
highest 40% experienced 54%-70%. As seen in figure 6 below the lowest
income earner groups have a higher percentage than the highest groups
(Theonlinecitizen.com). The income inequality has affected the poorest and
richest groups differently. The richest groups experienced an increase in their
wage in dollars, whereas the poorest groups experienced an increase in their
wage in percentage wise.

Figure 6: Income Growth by Decile 2007-2017 (Theonlinecitizen.com)

The Singaporean government has helped constrain the income inequality, with
government taxes and transfers. The 90/10 income inequality ratio reduces
significantly when including the transfers and taxes, the income inequality
ratio measures inequality by analyzing the income of the poorest and richest
10% of a nation (Theonlinecitizen.com).

Singapore has a Gini index of 0.459, which means their income inequality
stands relatively in the middle (Seow, Joanna).

Singapore Taxation System

In Singapore, taxes are used to evolve Singapore into an exceptional
environment, more dynamic economy and a stronger community. Taxes go
towards government operating expenditure. The Social development sector
makes up the largest sector in the government operating expenditure with
55% in 2017/18, the second largest is the security & external relations sector
with 34.2% (which contains expenditure in fields such as foreign affairs,
defense and home affairs). The Economic Development sector is third largest
with 6.4% and the Government Administration sector is the smallest with 3.9%
(Iras.gov.sg).

Figure 7: Government Operating Expenditure (Iras.gov.sg)

Singapore’s tax policy is to keep tax rates competitive for individuals and
businesses. The Singapore government believes that in order to attract a good
share of foreign investment they need to keep the corporate rate competitive.
Keeping the individual rates low will make risk-taking worthwhile, encourage
entrepreneurship and inspire the inhabitants to work hard (Iras.gov.sg).
 Works Cited

Channelnewsasia. "Singapore Sovereign Fund GIC Says It Pared UBS Stake at a Loss."
Channel News Asia, 16 May 2017, Error! Hyperlink reference not valid.. Accessed
13 Mar. 2019.

Countryeconomy.com. "Singapore - Literacy Rate." Countryeconomy.com,

countryeconomy.com/demography/literacy-rate/singapore. Accessed 6 Mar. 2019.

Data.worldbank. "GDP per Capita." The World Bank,

data.worldbank.org/indicator/NY.GDP.PCAP.CD. Accessed 4 Mar. 2019.

Economywatch. "Singapore Economy." Economy Watch, 18 Mar. 2010,

www.economywatch.com/world_economy/singapore/?page=full. Accessed 27 Feb.
2019.

Focus-economics.com. "Singapore Inflation Rate (CPI)." Focus Economics, Error! Hyperlink

reference not valid.. Accessed 11 Mar. 2019.

Fortune. "Richest Country in the World." Fortune, fortune.com/2017/11/17/richest-country-

in-the-world/. Accessed 11 Mar. 2019.

Indexmundi. "Singapore Economy - Overview." Index Mundi, 20 Jan. 2018, Error! Hyperlink
reference not valid.. Accessed 25 Feb. 2019.

Iras.gov.sg. "The Singapore Tax System." Inland Revenue Authority of Singapore, 19 Feb.
2019, Error! Hyperlink reference not valid.. Accessed 8 Mar. 2019.

Lkyspp.nus. "Singapore's Approach to Managing Economic Crises." Lee Kuan Yew School of
Public Policy, lkyspp.nus.edu.sg/docs/default-source/case-
studies/singapores_approach_to_managing_economic_crises_22052018_lowres.pdf?s
fvrsn=7387660a_0. Accessed 4 Mar. 2019.

Min, Chia Yan. "Singapore Still 2nd Freest Economy in the World but Gap with Top-ranked
Hong Kong Widens." The Straitstimes [Singapore], 5 Feb. 2018. The Straitstimes,
Error! Hyperlink reference not valid.. Accessed 27 Feb. 2019.

Parliament.gov.sg. "System of Government." Parliament of Singapore, Error! Hyperlink

reference not valid.. Accessed 13 Mar. 2019.

Pretoria. "About Singapore." Ministry of Foreign Affairs Singapore, Error! Hyperlink

reference not valid.. Accessed 25 Feb. 2019.
Seow, Joanna. "Parliament: Gini Coefficient Here Higher than Countries Which Impose
Greater Overall Taxes." The Straitstimes [Singapore]. The Straitstimes, Error!
Hyperlink reference not valid.. Accessed 11 Mar. 2019.

Singstat.gov. "Labour, Employment, Wages and Productivity." Statistics Singapore, 31 Jan.

2019, Error! Hyperlink reference not valid.. Accessed 4 Mar. 2019.

Singstat.gov. "Population and Population Structure." Statistics Singapore, Error! Hyperlink

reference not valid.. Accessed 4 Mar. 2019.

Theonlinecitizen.com. "How Big of a Problem Is Income Inequality in Singapore?" The

Online Citizen, 25 July 2018, Error! Hyperlink reference not valid.. Accessed 6 Mar.
2019.

Tradingeconomics. "Singapore GDP." Trading Economics,

tradingeconomics.com/singapore/gdp. Accessed 4 Mar. 2019.

Tradingeconomics. "Singapore Unemployment Rate." Trading Economics,

tradingeconomics.com/singapore/unemployment-rate. Accessed 11 Mar. 2019.

Workman, Daniel. "Singapore's Top Trading Partners." World Top Exports, Error! Hyperlink
reference not valid.. Accessed 4 Mar. 2019.

Figure 1+2+3+4:
Atlas.media. Singapore. OEC, atlas.media.mit.edu/en/profile/country/sgp/. Accessed 4 Mar.
2019.

Figure 5:
Statista. Singapore: Unemployment Rate from 2007 to 2017. The Statistics Portal, Error!
Hyperlink reference not valid.. Accessed 4 Mar. 2019.

Figure 6:
TheOnlineCitizen.com. "Income Growth by Decile 2007-2017." The Online Citizen.com, 25
July 2018, Error! Hyperlink reference not valid.. Accessed 4 Mar. 2019.

Figure 7:
Iras.gov.sg. Government Operating Expenditure FY2017/18. Inland Revenue Authority of
Singapore, Error! Hyperlink reference not valid.. Accessed 8 Mar. 2019.

Comparing and Contrasting the three economic systems

An overview of the three economies (Marlene and Meera):

Norway, USA and Singapore are three relatively high-income countries with stable
economies. All of which are rated in the top 15 richest countries of the world.
Singapore being the 2nd richest, Norway the 6th and the USA the 12th. Singapore has
a population of 5,638.7 million people with a GDP per capita of US $57,714. 30. USA
has a population of 325.7 million people and a GDP per capita of $59, 531.66 USD.
Whereas Norway having the smallest population of 5.2 million has an impressive and
staggering GDP per capita of US $70,600, compared to Singapore and the US. The
figure above shows the comparison of the three country’s GDP. This report will go
through the different aspects of a command and free-market economy that each
country has implemented/made use of and will evaluate on how it benefits or
detriments the country's economy through all the economic factors.

Which aspects of a command or free market economy do each country use?

(Etienne):

Norway, Singapore and the USA all have mixed economies in which the government
controls the productions and pricing of goods and services. However, all the
country’s economies have largely depended on the success of private industries.
While the government/ public sectors control some of the bigger companies. Their
main aspects such as labor, land and capital resources are mostly all owned by the
government and the rest are owned by individuals. In Norway 90% of agriculture and
fisheries are owned by individuals whereas in the USA most of their agriculture and
land is owned by the government. In Singapore, the agriculture is also mostly owned
by individuals while the government does have a say.

Key Statistics (Marlene):

Statistic Norway Singapore USA

GDP (2017) $379.5 billion US $323.91 billion 19.39 trillion USD
PPP

GDP per $70,600 US $57,714.30 59,531.66 USD

capita (2017)
GNI (2017) $337.9 billion PPP $508.3 billion PPP 19.61 trillion PPP
dollars dollars
GNI per $63,530 $90,570 PPP 60,200 PPP dollars
capita (2017) dollars
Unemployment 4% (2017 est.) 2.20% (2019) 4% (2018)
rate
Inflation 3.1% 0.4% 1.9%
rate (2019)
Life Expectancy 82.51 years 82.2 years 78.69 years
rate (2016)
Population 5.2 million people 5,638.7 million 325.7 million
people (2017)
Gini Index 27/100 45.9/100 41.5/100
Main import Germany 12.2%, China (14.5%), China, Canada,
partners Sweden 12.2%, Hong Kong (12.3%), Mexico, Japan and
China 11.2%, U.S Malaysia (10.6%), Germany
6.6%, Denmark Indonesia (7.5%),
5.5%, UK 5.2%, United States
Netherlands 4.1% (6.5%), Japan
(2016) (4.6%), South
Korea (4.5%),
Taiwan (4.4%),
Thailand (3.9%)
and Vietnam
(3.3%)
Main export UK 21%, Germany China (14.5%), Canada, Mexico,
partners 14.4%, Netherlands Hong Kong (12.3%), China, Japan and
10.7%, France Malaysia (10.6%), the United
6.9%, Sweden Indonesia (7.5%), Kingdom
6.5%, United States
Belgium 4.4%, U.S (6.5%), Japan
4.3%, Denmark 4% (4.6%), South
Korea (4.5%),
Taiwan (4.4%),
Thailand (3.9%)
 and Vietnam
(3.3%)

Income Inequality (Meera):

Singapore has the largest Gini coefficient of 45.9, the US following it with 41.5
and Norway having the lowest coefficient of 27.0. The graph above shows the
income inequality using the Gini index for each country. Unfortunately, for
both Singapore and the USA the gap between the rich and the poor is
widening. The rich are becoming richer and the poor are becoming poorer
through the growth of private businesses and increase in wages. In Singapore,
wages of both the poor and rich are growing by relatively equal amounts, but
because the rich earn a higher income their income is growing a lot more than
the poor. However, even though Norway’s Gini index is the best, it is also said
to be increasing. It is the most it has been in the past 10 years, more over in
the public sector than the private. One of the reasons for this, is that the
salaries for top executive business men have increased tremendously.
Higher wages
are almost four
times more than
lower wages for
a standard work
week in Norway
(37.5 hours) per
week. This
is similar to the
issue Singapore
and the USA are
facing.

Inflation rates
(Meera):

The Inflation rates in

Norway and the USA
are at relatively
healthy rates.
Norway’s being 3%
and the
USA’s at 1.9%. 1.8%-
3% is considered a healthy inflation rate, showing a stable economy. However,
Singapore’s inflation rate hovers around the 0.4% mark since January 2019
falling from 0.5% in the previous month. Their Inflation rate is much smaller
compared to the other countries discussed. The reason for this is because of
the relatively large drop in private road transport and services inflation.
Nevertheless, their inflation rate is expected to average 1.2%- 1.4% in 2020. In
Norway, the inflation rate has hovered around the 3% mark for the past 10
years. It does however exceed the Norges’ Bank’s target of 2%, mainly because
prices of food, water, tobacco, housing, electricity and gas are all increasing. It
is although expected to go down to 1.9% in 2020. USA’s inflation rate has
continued to increase since their large drop in 2015, because of their nearly
fully employed economy and persisting tariffs. Altogether, each country's
inflation rates are proving to be relatively beneficial for each country.

Import and Export (Marlene):

Norway, USA and Singapore are all in the top 50 countries for top exporters
and importers in the world. For exporting, USA is second, Singapore 14th and
Norway being the 30th biggest exporter in the world. In importing, the United
States is the biggest importing country in the world, with Singapore as the
16th largest and Norway as 35th largest as of 2017. USA’s total for exports is
$1.25 trillion USD and $2.16 trillion USD for imports. Compared to the US,
Singapore and Norway’s total is not close to their large numbers but are still
quite high. Singapore has an export total of $321 billion USD and import total
of $294 billion USD, while Norway’s export total is $106 billion USD and import
total is $84.8 billion USD. All three countries have many similarities when it
comes to import and export, because they import and export to some of the
same places and the same products. The destinations that all three countries
have the same are China, Germany, South Korea, but the ones that only two
have in common are, Japan, France, the United Kingdom, Hong Kong and the
Netherlands. With top origins, all countries import from China and Germany,
but only two share the same deal with Japan, the United Kingdom, India, Italy
and Malaysia. Singapore, Norway and USA, all import Refined Petroleum,
broadcasting equipment and office machine parts but only two both export
refined petroleum. In export products, two of the country's export integrated
circuits, packaged medicaments, petroleum gas and crude petroleum. Two of
the countries both import cars, crude petroleum, computers, packaged
medicaments and integrated circuits.

Taxation System (Etienne):

Norway, Singapore and the U. S’s taxes are given to the government in order
for them to build hospitals, education, transport and infrastructure. Norway
and Singapore are very heavy taxed countries and with Norway having a
taxation burden of over 45% and Singapore’s being 34.2%. The U. S’s taxation
system is quite different meaning that it is known to be quite a complexed
system. Unfortunately, the U.S went through some troubles with their taxation
system and their taxes faced by a U.S worker was the 11 lowest in the OECD.
Unlike Norway and Singapore being very heavy taxed and having a taxation
burden of 45% and 34.2% the U.S has a taxation burden of 9.8%.

Response to the 2008 crisis (ALL):

Luckily, for Norway and Singapore the global recession was largely muted.
Nevertheless, they still did experience a somewhat moderate decline in their
economy compared to several other countries. However, in Norway the
private sector did get affected due to higher interest rates and minimal
availability of loans. The rest of Norway was protected by its sovereign fund
and its gains from its oil and natural gas sector through direct taxes as well as
from the investments it receives for its petroleum projects. Singapore was also
fortunate enough to have a large sovereign fund with enough to donate
billions into Western Banks that suffered deep losses due to the financial crisis.
Unfortunately, The Great Depression had a huge impact on the U.S when it
came to the financial crisis in 2008. It started as a mortgage meltdown and
ended in a recession in the U.S. Their response wasn’t legal and it took many
risks that were considered breaking the law. The part of the U.S government
that were the crisis fighters pushed off the arguments and were unfairly
allowing the activity of the ones that were already privileged and many
worried of this unfairness. 8.8 million people lost their jobs and 6 million went
jobless.

Conclusion (ALL):

In conclusion, the USA has a very diverse economic system compared to

Norway and Singapore. Nevertheless, they all have a huge economic
success compared to many other countries. It is clear to us however, that
Norway and Singapore are more similar in terms of the way they handle their
economy. This is easily observed through their GDP, taxation system and
the intellectual way they responded to the 2008 financial crisis. The USA had a
large downfall after the Great Depression following by the 2008 financial crisis,
causing a drop in their GDP and inflation rates. In addition, through their
income inequality we can tell that the USA and Singapore are more similar in
their Gini index rate while Norway holds the highest rate. This shows that
Norway has one of the best standards of living compared to the USA and
Singapore as well as many other European countries. As we have established,
all three countries clearly have successfully growing economies and use both
aspects of a command and free market economy well.