Essay On Singapore's Economic Crisis

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Tigers. Within the same time period, other regional currencies depreciated much more. The Indonesian depreciated 70%, Philippine peso suffered a 35% hit, and the Thai baht fell 80%. (Kee Jin, 2001). The Singapore dollar’s sharp appreciation against regional currencies results in the fact that Singapore’s “nominal and real effective exchange rates was relatively stable both before and during the crisis” (Kee Jin, 2001). So, what did Singapore do differently?
As a country with a small open economy, Singapore is extremely susceptible to external actions, especially in the surrounding East Asian region. Therefore, the large and adverse economic shocks caused by the Asian financial crisis should have had a devastating effect on Singapore’s economy,
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The current state of Singapore’s economy and its rank in the international economy is compared to those of South Korea, Taiwan, and Hong Kong. Data on Singapore’s economic freedom, gross domestic product (GDP) per capita, gross national income (GNI) per capita, and economic productivity is compared to the other Asian Tigers. According to the Heritage Foundation’s 2015 Index of Economic Freedom, Singapore has an economic freedom score of 89.4, making it’s the second freest economy in the world. With .2 point on Singapore, Hong Kong has the freest economy in the world with an economic freedom score of 89.6. Singapore and Hong Kong make up two of only five countries that are completely economically free. With a “mostly free” status Taiwan has an economic freedom score of 75.1, rendering fourteenth free economy in the world. South Korea comes in at 29th with a score of 71.5 (The Heritage Foundation, …show more content…
As shown in figure 4, since the 1970’s Singapore has led the Asian tigers and Japan in labor productivity. Labor productivity is a two-part structure; productive business is a result of both efficiency and effectiveness. A country’s economy crucially relies on it labor productivity performance. As a result, labor productivity is positively correlated with in economic prosperity (Bhardwaj, 2015). Therefore, Singapore’s steady rise of labor productivity over the other Tigers means its economy is able to produce more for the same amount of inputs, and follows a sustainable growth trajectory. In this research, Singapore’s success is compared to countries in the same geographic region. South Korea, Taiwan, and Hong Kong are logical comparison choices that give leverage on the casual explanation of Singapore’s economic success. These four countries make up the Asian Tiger states and had common roots in the 20th century. From the mid 20th century until 1997, the Tiger economies were admired and favored by foreign investors for their “fast growth, low inflation, macroeconomic stability and strong fiscal positions, high saving rates, open economies, and thriving export sectors” (Aghevli, 1999). The Asian Tiger’s strong economic performance throughout the early 1990s made it close to impossible to predict that nearly all their economies would crumble by the end of the

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