The Economy And The Factors Of Production Economics Essay

General Information and Demographics

“ Singa-Pura ” which means The City of the Lion is from where Singapore derives its name. The official name is The Republic of Singapore. It is a diamond shaped island in South East Asia, holding an eternal coastline of 193 kilometers, surrounded by 60 smaller islets which are a portion of the state. This ‘City-State ‘ is located in the southern tip of the Malay Peninsula, serves as a meeting point between two huge H2O organic structures – the Indian Ocean and the South China Sea. Singapore is separated from Indonesia by the Singapore Strait and from Malaysia by the Straits of Johor. Due to this critical location of the state, it serves as one of the largest ports in Southeast Asia and is besides one of the busiest in the universe. Thus, Singapore is counted as the universes 4th taking fiscal centre, and plays a critical function in international finance every bit good as trade.

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Topographically, the state has hills of sedimentary stones in the northwest part and sandy level land in the E. Bukit Timah, which is built of pyrogenic stones and granite and is 206 m above sea degree, is considered as the highest extremum in the state. The island was ab initio covered with dense and tropical woods inland and Rhizophora mangles along the seashore. 40 % of the land is utilized for parklands, reservoirs and plantations and 50 % of it is urbanised.

Singapore is a city-state. A ‘City-State ‘ may be defined as that independent state which consists of a metropolis which is non under the disposal of another local authorities. The authorities lays particular accent on necessities like H2O, and besides shops resources like oil and sand. This manner, they are non dependent economically or politically on any larger endeavor and run into the definition of a metropolis every bit good as a to the full autonomous province.

Taking into consideration all the islands, the entire country of this state is about 704, and as of twelvemonth 2007 the approximative population is 4.8 million people. The Chinese constitute about 78 % and 14 % of the people are Malays. Indians besides make up about 7 % of the population of this multi-lingual province whose national linguistic communication is Malay. The other official linguistic communications are English, Mandarin and Tamil. It is one of the most densly populated states in the universe, and in 2008 the population growing rate was 3.1 % . The literacy rate in this state in 2009 was 96.3 % and its currency is the Singapore Dollar. 1 Singapore dollar is about 0.74 U.S. dollars.

The Political System

On the 9thA of August, 1965 Singapore became an independent democracy from the Federation on Malaysia.A A Since so, the political relations has been dominated by the People ‘s Action Party ( PAP ) even though in theory there exists a multi party system.A A In the election held in 2006, 82 of the 84 seats in the parliament were won by the PAP. The model is that of a Parliamentary Republic and the Head of State is the Prime Minister. There exists a dominant party system and there are 3 subdivisions present in the authorities – The Executive, The Legislature and The Judiciary.

The legislative power lies in the custodies of the Parliament every bit good as the Government and the Judiciary is free of the other two divisions of the government.A A The executive power is vested in the authorities. Elections in Singapore are held every 5 old ages and after the election, the President appoints, from one of the members of parliament, the Prime Minister. It is known that the President is a front man or more of a representative character and has no existent power to do determinations for the province.

The Executive – It consists of the cabinet of Singapore which is composed of the President and the Government. It is jointly responsible to the parliament and controls jurisprudence devising to some extent. The cabinet is appointed by the President, after confer withing the Prime Minister.

The Legislature – This organic structure along with the President comprises the Parliament. It is made up of the elective representatives of the people. The charge of disposal is in the custodies of the talker. The chief intent revolves around commanding fundss, doing Torahs and guaranting answerability.

The Judiciary – In Singapore, the Supreme Court has full Judicial control. It consists of two bomber tribunals, the High Court and the Court of Appeal. The assignment of Judgess is done by the President after they have been recommended by the Prime Minister. In 2008, it was reported that Singapore has the best Judicial system in Asia.

Singapore is considered as a ‘hybrid ‘ state, as it has democratic every bit good as autocratic elements. The People ‘s Action Party has been re-elected every clip since 1959 and in many of the General Elections they have won all the seats in the Parliament. Some of the major resistance parties include the Workers ‘ Party and the SDA which is the Singapore Democratic Alliance.

Singapore ‘s political system may be mostly interpreted as a successful one, as the changeless re-election of the PAP has uplifted Singapore from a Third World state to a First. The party has proven itself by maintaining the state afloat through assorted crises since the 1970 ‘s, including the oil daze of the 1970 ‘s, the recession of the 80 ‘s and the Asiatic fiscal crisis. The party can be regarded as one with great deepness of experience and is obviously making good for the state as there exists an unchallenged economical success. It is besides rated as one of the least corrupt states in the universe.

However, every system has its drawback. In Singapore ‘s political system, the major point of unfavorable judgment is that there is practically no balance of power between the resistance and the governing party. Another negative facet of the system is the there is no freedom of imperativeness and decease punishment is perceived as a downside by many. It should besides be noted, that the wage of the caput of authorities of Singapore is the highest in the universe at 3.1 Mio S $ and this is frowned upon by many.

The Economy and the Factors of Production

The resources employed to bring forth goods, like land, labor and services are known as factors of production. Each factor is alone in the function it plays in the state ‘s economic system. The economic system of Singapore is extremely developed, and may be called as a free-market economic system. It is extremely dependent on exports, and therefore due to the planetary recession in 2001-2003 it was hit hard.

However, since so, due to a great sum of internal flexibleness, and lowered involvement rates, between 2004 and 2007 the GDP growing was about 7 % per annum. The GDP portion of services of Singapore may be compared to that of states like Taiwan and Ireland, where as in footings of services it may be comparisons to Germany or Japan. ( fig 3 ) . However, after 2008, there has been a rapid and too bad lessening in the GDP of the state ( fig 4 ) . In 2008, the existent one-year growing rate was merely 1.4 % and in 2009, it fell to -2 % .

Due to the presence of an unfastened concern scene, the system is practically corruption free and this has helped the national economic system greatly. Exports are the chief beginning of gross and transshipment center trade is practiced excessively. The fiscal control is in the custodies of the legislative assembly of the state. There is a ‘development fund ‘ where capital assets, land acquisitions and any other capital parts are directed. The authorities can retreat this money one time a ‘supply jurisprudence ‘ is passed by the parliament.


It is considered to be a inactive factor of production, one that is non created by worlds. In Singapore, the land is used to cultivate harvests like gum elastic, copra, domestic fowl, fruits and veggies. The long coastline is besides taken advantage of by deepwater ports and piscaries are a major industry excessively. However, land in Singapore has been the slowest turning factor of production. The land is used for commercial, industrial and agricultural intents but since 1960 has grown merely by 5 % . This reflects on the renewal and the release of province owned land for assorted intents like development. It should besides be accounted, that land used for agribusiness has greatly declined and that used for non-agrarian intents has increased. The graphical representation for the assorted utilizations of the land is depicted in the appendix as fig 5.


This refers to human input and attempt and the ability of the people to work. It may be measured as the physical every bit good as mental input of the employee to the occupation given. In Singapore, the work force is around 2.2 million and is besides dependent on foreign labor. There is a individual trade brotherhood federation, the National Trades Union Congress, which contains about 99 % of organized labor. The general labor affairs are controlled by authorities policies. There is an income threshold and small protection for white collar workers and a particular tribunal to pull off differences which can non be solved informally. The unemployment rate rose to 4 % in 2001, and in 2007 was 2.7 % . A assortment of programmes have been put away by the Singapore authorities to hike the labour force amongst seniors and adult females. The deficit in labour forces is made up by foreign workers, and recent information showed that 27 % of the work force was comprised of them. The services sector is an of import sector of the Singapore economic system. In 2005, the sector accounted for 63.8 per cent of nominal GDP and 68.7 per cent of entire employment ( fig 6 ) .


The capital of a state increases the ability of the state to bring forth more wealth. The accretion of capital has been the most of import factor of production for Singapore. The graduated table of investing is impressive, and Singapore ‘s capital stock increased 33 crease since 1960. In 2003, the entire trade was of $ 279 billion, and it is the fourteenth largest trading spouse of the United States. The rule exports are nutrient, fabrics and crude oil merchandises amongst chemicals and electronic equipment. Singapore ‘s chief imports are aircraft, rough oil, electronic constituents, Fe and steel. It attracts big scale investors and as of 2003, the entire plus acquired by the stock invested by U.S. companies was approximately $ 61.4 billion. Industry accounted for 24 % and Services 64 % of Singapore ‘s entire industrial end product. Fig 7 in the appendix will demo how each sector has contributed to the GDP and growing of the state ‘s economic system.

Decision and Findingss

It can therefore be concluded from the above information obtained, that the Republic of Singapore is a state on an upward rise in this industrialized universe and has a batch to offer. Singapore has besides been involved in advancing biotechnology and top research scientists have been involved in this undertaking. The national authorities besides plans to set into action a financial policy that would concentrate on enlargement and cut down the impact of recession. The two major sectors are the industry and service sectors and steps have been taken by the authorities to keep the place of the economic system. We can hence conclude that this macro-economic tendency for Singapore along with the consistence in the authorities and handiness of resources every bit good as strategic location has worked out good for the state.


Fig 1 – The Map of Singapore

Fig 2 – The National Flag of Singapore

Fig 3 – Comparison of GDP Shares and Services

Fig 4 – GDP of Singapore

Fig 5 – Use of Land in Singapore

Fig 6 – GDP and Employment in Singapore

Fig 7 – Singapore ‘s GDP by Industry


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