Country Report: Singapore
Singapore is a wealthy island country, located in Southeast Asia on the southern tip of the Malay Peninsula. Founded as a British trading colony in 1819, Singapore has become one of the most prosperous countries due to its strong international trading links. The inhabitants of Singapore enjoy one of the highest standards of living in the world, with per capita GDP equal to that of the leading countries in Western Europe. (Singapore Profile, Overview). Economic prosperity in Singapore is largely due to its highly developed and successful free-market economy, a remarkably open and corruption-free business environment, stable prices, and a per capita GDP that is higher than most developed countries. The economy depends heavily on exports, and the country is home to one of the busiest ports in the world (The World FactBook, Economy).
Although Singapore is relatively small in size, encompassing just 272 square miles, it is one of the most densely populated countries in the world with a population over 5 million. The major ethnic groups are Chinese, which make up almost 75% of the population, Malays and Indians, with the official languages of the country being English, Malay and Mandarin. Singapore has a 96% literacy rate, low unemployment rates hovering around 2%, and a workforce made up of 70% services, 17% manufacturing, 13% construction, and 10% other. (U.S. Department of State, Doing Business Abroad). Singapore has attracted major investments in pharmaceuticals and medical technology production and will continue efforts to establish itself as the financial and high-tech hub of Southeast Asia (The World FactBook, Economy).
Assessing the Potential of Singapore and its Advantages and Opportunities Assessing market potential of a foreign country is critical to the success of the foreign investment of a firm; however, there are many unique country conditions that can make it extremely hard to do. Firms look to examine per-capita income, size of middle class, GDP growth rate and commercial infrastructure as key indicators of market potential (Cavusgil, Knight, & Riesenberger, 2012, p. 266). Singapore possesses strong advantages and opportunities for investment of a foreign firm, and ranks #1 on the Market Potential Index for Emerging Markets in 2011 (Global Edge, Market Potential Index) .
Per-Capita Income, a Rising Middle Class, and GDP Growth-Rate When considering the per-capita GDP of a country the most accurate estimate of market potential occurs when figures are adjusted for price differences among different economies. This adjustment allows for a more accurate representation of the amount of products consumers can buy in a given country using their own currency and consistent with their own living standards (Cavusgil et al., 2012, p. 264). This figure is found by calculating GDP statistics based on purchasing power parity. The GDP for Singapore in 2011, converted using PPP exchange rates in US dollars, was $57,932 as compared to the United States, with a GDP of $47,153 (The World Bank, Measuring Business Regulations). A continuous rise in Singapore’s per-capita GDP has led to a consistent rise in the middle class. In every country, the middle class represents the segment of people between wealthy and poor. The middle class exercises economic independence by working in businesses, education, government, and hourly jobs. These groups consume many discretionary items such as electronics, furniture, automobiles, and entertainment (Cavusgil et al., 2012, p. 343). The size and growth-rate of the middle class and the per-capita GDP serves as a key indicator of a country with strong market potential because of their buying power (Cavusgil et at., 2012, p. 264). Over the course of 2000-2009, Singapore has continued to have a high, positive growth-rate (Cavusgil et al., 2012, p. 49). The GDP of Singapore experienced an average growth of 8.6% between 2004 and 2007....
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