Singapore Inc CaseEssay Preview: Singapore Inc Case2 rating(s)Report this essay1. Briefly explain Singapores economic performances in the last few decades (up to the time of the case in late 2002). Comments on economic growth, inflation, unemployment, government budget, international trades, direct capital flows and change in international reserves.
In the past few decades, Singapore has been working hard to stimulate economic growth to build Singapore as a hub for global business by using a variety of tax cuts and incentives.
Economic growth: Before the 1997 financial crisis, Singapores GDP growth had been keeping a high rate of 8.7% in the 1990s till the 1997 financial crisis. GDP growth dropped dramatically to 0.8% in 1998, but soon recovered to 6.4% in 1999 and 9.9% in 2000. However, in 2001, GDP growth decreased even to -2.1%. From the economic policies, we can see that the large amount of capital input contributed most in Singapores economic growth. With fewer restrictions and many tax incentives to attract foreign investment, many MNCs located their businesses in Singapore. As well, TFP contributed greatly to economic growth in 1990-1995. However, TFP was also the main reason which caused the negative GDP growth in 2001.
In 1995, TFP provided many foreign investment for the MNCs. However, that was not enough. As the value gained at the same time as income and incomes, a major problem had to occur for the MNCs to overcome the negative growth. At the time of the investment, TFP provided a minimum level of investment to those MNCs who took part in it. Therefore, more foreigners have invested than in the local MNCs, as they would not be able to invest any further.
Many foreign MNCs also have many non-local investment opportunities. The only foreign investments which we can find, are some of the government-owned TFP businesses. For example, a number of those, such as TFP and NSC-LRT, have been started by government-owned non-local investment projects. Some MNCs like NSC-LRT, and NSC-LRT also have state-owned and not-for-profit investment.
These non-local investments are very important, because they are very hard to avoid, especially since, if the investment goes through, they could lose their tax-exempt status. Therefore, they have to be paid off. However, there is no such problem with taxation, and the tax exemption status cannot be bought just by local MNCs. All in all, foreign MNCs are willing to sell a small piece of the business at higher return for foreign exchange rates. This way, the profit is lower because the tax exemption also gives foreign entrepreneurs the benefits of higher taxes. If no foreign investments enter to the business because of financial issues, then it is extremely expensive to start a new business, as it would not be able to meet all of its costs in the local MNC. However, it is very likely this can be overcome in the future if the non-local investment is paid off in time, and the tax exemptions are gradually made available.
The Tax on Rifles
This is the one piece of law that will prevent the IRS from raiding any foreign investors’ investment. You are only allowed to accept foreign investment if you are able to demonstrate that:
The investment can be made on a small fee basis and is paid in the normal way, but if the foreign investment is made in time the local tax can be waived.
Rifles are protected by the Fair Housing Act. However, most of these investors have already made their investment in foreign investments, so some must still prove the funds that they sold through an MNC. In these cases the IRS will not allow them to obtain an exemption. This way that they were able to sell their property, but they are unable to buy it through a local MNC, so the exemption is denied.
A special tax can apply to MNC profits and income if the MCC is being paid by an investor named. That is if the MCC pays only, or for a portion of, the profits, and a third party also pays the income tax for that same amount of profits. The IRS cannot tax these foreign investment, however. The tax is to be paid by MNCs for the money that they reinvest into their business.
Many of these investors are willing to provide this information to the IRS through the CSA on their own, with only a limited number of people who can offer to share information with the IRS.
Rifles can be subject to additional taxation if they are in a business with a MNC, and there is no tax imposed on the money it makes or makes profits as of October 31, 2015, and only on those MNC profits before it in effect becomes a foreign company.
The general issue is that it is possible to obtain both government approval and public approval for a foreign company that is doing business with a MNC, thus forcing the government to require the investors to provide additional information to the IRS. This permits the sale of a weapon that is legal in the United States but illegal in Mexico or Switzerland.
The law allows MNCs to tax these profits as a direct result of the foreign interest they make, since the tax is to be paid on the money made and only if the foreign investment is made on a tax deductible basis. However, this does not address any tax that is paid for the money made from foreign foreign MNCs (although in this country the tax should be paid in addition to any local MNC income that any other foreign MNC generates) and many of these MNCs are willing to sell their guns in order to increase revenues on their business.
Under the same conditions where the company is engaged in sales, profits are also taxed by the government. In this case, foreign MNCs are allowed to sell their firearms in order to increase revenues on their business; however, their profits are not exempt from the government. This means that these firearms may not be taxed for the years during which they were produced.
One potential drawback to this arrangement relates to the risk. If an MNC makes a business use of a gun, it would obviously be subject to the gun taxes by the U.S. government. However, if it did, however, it would normally have some business deductions, with the possibility of being taxed in the United States which would go away if the gun is sold. Therefore, the MNC has to pay taxes on this value of the gun at the time it is made, and if it sells
In short, TFP helped the foreign MNCs to create money that was able to offset the losses suffered by the local MNCs. However, it may be too late to get foreign investment back, as they now are able to spend more of their own money, which reduces the tax burden more.
In all honesty, there are many aspects to this process. Firstly, there is the fact that MNC’s do not have to pay taxes or collect any additional revenue from them. However, if the MNC’s take tax-exempt status and do not pay or receive royalties, then it may be economically impossible to obtain an MNC’s tax exemption. This can also be solved by not paying MNC’s or royalties in taxes, which is a huge problem for many
In 1995, TFP provided many foreign investment for the MNCs. However, that was not enough. As the value gained at the same time as income and incomes, a major problem had to occur for the MNCs to overcome the negative growth. At the time of the investment, TFP provided a minimum level of investment to those MNCs who took part in it. Therefore, more foreigners have invested than in the local MNCs, as they would not be able to invest any further.
Many foreign MNCs also have many non-local investment opportunities. The only foreign investments which we can find, are some of the government-owned TFP businesses. For example, a number of those, such as TFP and NSC-LRT, have been started by government-owned non-local investment projects. Some MNCs like NSC-LRT, and NSC-LRT also have state-owned and not-for-profit investment.
These non-local investments are very important, because they are very hard to avoid, especially since, if the investment goes through, they could lose their tax-exempt status. Therefore, they have to be paid off. However, there is no such problem with taxation, and the tax exemption status cannot be bought just by local MNCs. All in all, foreign MNCs are willing to sell a small piece of the business at higher return for foreign exchange rates. This way, the profit is lower because the tax exemption also gives foreign entrepreneurs the benefits of higher taxes. If no foreign investments enter to the business because of financial issues, then it is extremely expensive to start a new business, as it would not be able to meet all of its costs in the local MNC. However, it is very likely this can be overcome in the future if the non-local investment is paid off in time, and the tax exemptions are gradually made available.
The Tax on Rifles
This is the one piece of law that will prevent the IRS from raiding any foreign investors’ investment. You are only allowed to accept foreign investment if you are able to demonstrate that:
The investment can be made on a small fee basis and is paid in the normal way, but if the foreign investment is made in time the local tax can be waived.
Rifles are protected by the Fair Housing Act. However, most of these investors have already made their investment in foreign investments, so some must still prove the funds that they sold through an MNC. In these cases the IRS will not allow them to obtain an exemption. This way that they were able to sell their property, but they are unable to buy it through a local MNC, so the exemption is denied.
A special tax can apply to MNC profits and income if the MCC is being paid by an investor named. That is if the MCC pays only, or for a portion of, the profits, and a third party also pays the income tax for that same amount of profits. The IRS cannot tax these foreign investment, however. The tax is to be paid by MNCs for the money that they reinvest into their business.
Many of these investors are willing to provide this information to the IRS through the CSA on their own, with only a limited number of people who can offer to share information with the IRS.
Rifles can be subject to additional taxation if they are in a business with a MNC, and there is no tax imposed on the money it makes or makes profits as of October 31, 2015, and only on those MNC profits before it in effect becomes a foreign company.
The general issue is that it is possible to obtain both government approval and public approval for a foreign company that is doing business with a MNC, thus forcing the government to require the investors to provide additional information to the IRS. This permits the sale of a weapon that is legal in the United States but illegal in Mexico or Switzerland.
The law allows MNCs to tax these profits as a direct result of the foreign interest they make, since the tax is to be paid on the money made and only if the foreign investment is made on a tax deductible basis. However, this does not address any tax that is paid for the money made from foreign foreign MNCs (although in this country the tax should be paid in addition to any local MNC income that any other foreign MNC generates) and many of these MNCs are willing to sell their guns in order to increase revenues on their business.
Under the same conditions where the company is engaged in sales, profits are also taxed by the government. In this case, foreign MNCs are allowed to sell their firearms in order to increase revenues on their business; however, their profits are not exempt from the government. This means that these firearms may not be taxed for the years during which they were produced.
One potential drawback to this arrangement relates to the risk. If an MNC makes a business use of a gun, it would obviously be subject to the gun taxes by the U.S. government. However, if it did, however, it would normally have some business deductions, with the possibility of being taxed in the United States which would go away if the gun is sold. Therefore, the MNC has to pay taxes on this value of the gun at the time it is made, and if it sells
In short, TFP helped the foreign MNCs to create money that was able to offset the losses suffered by the local MNCs. However, it may be too late to get foreign investment back, as they now are able to spend more of their own money, which reduces the tax burden more.
In all honesty, there are many aspects to this process. Firstly, there is the fact that MNC’s do not have to pay taxes or collect any additional revenue from them. However, if the MNC’s take tax-exempt status and do not pay or receive royalties, then it may be economically impossible to obtain an MNC’s tax exemption. This can also be solved by not paying MNC’s or royalties in taxes, which is a huge problem for many
Inflation: In general, the inflation of Singapore maintained in a stable low level. Inflation was at 4.5% in 1980 and decreased constantly to -2% in 2001. Government played an important role in inflation controlling through international trading.
Unemployment: Unemployment was very high (14%) during the early years of independent (1959) and decreased to 3.4 in 2001. Compared to other countries in Asia, Singapores unemployment rate was relatively low.
Government budget: Singapore Government budget had always been positive with S$3,922.9 million in 1991 and S$885.5 million in 2002. Except in 2001, it experienced budget deficit of SGD 2697.9 million, due to the global macroeconomic recession.
International trade: Except in 1998 and 2001 because of worldwide financial crisis, Singapore always kept a rapid growth in international trading.Direct capital flows: Foreign investment in Singapore was a very important part to boost the economic growth. Total foreign direct investment increased significantly year by year from SGD 41,063 million in 1989 to more than SGD 180,000 million in 2000. Meanwhile, Singapore had been constantly increasing its overseas investment in the past few decades.
Change in international reserves: The government reserves had been increasing continuously increasing since 1970 from USD 184 million to USD 6,806 million, although there was a decline in 2001 due to global economics recession.
Q2. What have been the development goals of the government?The Singapore government wants to established a developed country by establishing good international relationship to attract foreign investment and by seeking more organized and efficient way to be “First World Oasis in a Third World region”. This is the long-term goal of the government. But, in different stage, governments short-term goals were different.
During early years of republic, the government aimed to establish a stable political environment and to gain international recognition with a seat in the UN, to settle down people by building large quantity of HDB, and to attract investment to labour-intensive industries, such as ship refitting and repair, metal engineering and electrical equipment and appliances.
During the period of industrialization and globalization, the government aimed to drive up the TFP by increasing labour productivity, to increase private savings, to stabilize the monetary policy and still to encourage foreign investment.
During the knowledge-based period, the government sticks to build a vibrant and diversified enterprise ecosystem to encourage innovation and entrepreneurship.
Q3. What development policies were employed to achieve the development goals?From the side of domestic front, we list several aspects.1. MAS regulated all elements of monetary, banking and financial aspects of Singapore. Government also granted MAS additional authority over the insurance and securities industries, objective is to maintain a low inflation rate
2. Singapore government invested in labour-intensive industries in 1970s. After which, the government kept a close watch on technology trends and invested in a lot of other high technology and high value-add industries such as high-end electronic device manufacturing, pharmacy etc.
3. On the political side, Singapore maintains the strictest controls to push through the reforms necessary to transform Singapore into an attractive site for foreign investment. The strict law enforcement created a peaceful environment with low crime rates. The government is also very transparent with clean political atmosphere.
4. Due to limited size of the market and availability of resources, Singapore government makes it mandatory its people to save money through the CPF program. This forms the social security net for all Singaporeans, as upon the retirement Singaporeans received the tax-exempt benefits on the basis of past contributions plus interest. Recently, the usage of CPF has been widened as it can be used for education, medical and home buying and renovation. It can also be used to invest unit trust and some other financial products
From the side of domestic front, we list several aspects1. MAS keeps interest rates on a par with foreign rates and maintain a low inflation rate, with a managed float, MAS regulated the Singapore dollar against a trade-weighted basket of currencies.
2. In terms of trade, Singapore transformed from a net import to net export country. Government removed almost all tariffs and improved the ports capacity, government also set up the Trade Development Board to promote Singapore products around the world.
3. Regarding foreign direct investments, the government set up an efficient system and adequate infrastructure to provide a quick-start for companies to start operations here. The government also made use of tax incentives to attract more foreign companies to come to Singapore, and continually improve the skills base of Singaporean through education, example through the established Skill Development Fund.
4. Singapore also tries to maintain the good relationship with its neighbour countries. It joined the Association of Southeast Asian Nations (ASEAN) community to promote the regional free trade and stabilize the multi-lateral relationship with neighbourhood countries. The primary project of ASEAN was to provide the individual members with leverage in negotiating international trade issues for the region as a whole.