Chapter 2 sustaining economic development

1. Chapter 2: Sustaining Economic Development in a Globalising World

2. Agenda of Chapter

Globalisation

Definition

Reasons for globalisation

Impacts of Globalisation

Singapore and globalisation

How does Singapore stay relevant in a globalising world?

3. What comes to your mind when you think about the word: Globalisation What questions can you ask?

5. Globalisation

What is the definition of globalisation?

What are the characteristics of globalisation?

What are some examples of globalisation?

What are some non-examples of globalisation?

6. Globalisation

Definition:

The process by which people, their ideas and their activities in different parts of the world become interconnected or integrated.

Main idea: INTERCONNECTEDNESS.

8. What allows globalisation to spread and grow?

[what are the key driving forces?]

Developments in transportation and communication

Transportation

Communications

Transnational Corporations [TNCs]

9. How

Does transportation help to spread globalisation?

Does communications help to spread globalisation?

Transnational Corporations [TNCs] help to spread globalisation?

10. Developments in transportation and communication

Transportation [pg. 47]

Definition : transport systems are the means by which people, materials and products are transferred from one place to another.

Improvement in transportation technology cuts down the time taken to get from one place to another [for both people and products]

Commercial jet aircraft, large ocean-going vessels, Containerisation

What allows globalisation to spread and grow?

12. Developments in transportation and communication

Communications [pg. 48]

Definition : Communication systems are the means by which information is transmitted from place to place in the form of ideas, instructions and images.

Invention of advanced communication technology has allowed consumers to access information about new products and places more efficiently and conveniently.

Internet has transformed the way one communicates, conducts business, obtains information and purchase goods.

What allows globalisation to spread and grow?

16. Transnational Corporations (TNCs)

Definition: Large global firms that operate in a number of countries and have production or service facilities outside the country of their origin

Economies of the different countries become more integrated.

17. What are the impacts of globalisation?

Economic

Social

Environmental

Are these impacts positive or negative?

19. Economic impact of globalisation

Improvements in standard of living

Increased competition among nations

Investment and market

Talent

Widening income gap between the rich and poor

20. Economic impact of globalisation

Elaboration:

Globalisation has both positive and negative impact

Many people experienced an improvement in their living standards due to an increase in their income

However, there are also people who do not get to enjoy the positive impacts of globalisation

21. Economic impact #1: Improvement in standard of living (example)

As countries trade and invest in each other, they earn more money.

Such money are used by the government to develop the country (e.g. education, health, housing etc)

People living in these countries can enjoy the benefits and hence, have a high standard of living.

People also have a wider variety of choices in the products that they buy.

22. Economic impact #2: Increased competition among nations (example)

Countries now face more intense competition to attract Transnational Companies (TNCs) to invest in their country.

E.g. Singapore, China (pg. 52-53)

Poverty cycle: Many developing countries find it hard to attract foreign investments because of their poor infrastructure and political stability. Such countries often remain poor.

23. Dalian, China

24.

Countries also want to attract talented people to work in their country.

E.g. India (pg.55)

Brain Drain: highly skilled people migrating to other countries

Economic impact #2: Increased competition among nations (example)

26. Economic impact #3: Widening income gap between the rich and the poor (example)

Developed countries draw away TNCs, investments, skilled people and resources away from poor areas.

Developing countries are unable to produce better quality goods and higher priced goods.

Developing countries also face trade restrictions from the developed countries.

The gap between the rich and the poor increase [and this can led to tension]

31. Social Impact

Increased awareness of foreign culture

Loss of local culture

32. Social Impact #1: Increased awareness of foreign culture

People become more aware of different cultures [through travelling, through internet, movies etc]

34. Social Impact #2: Loss of local culture

There is a loss of local culture, especially when TNCs, or global brands such as Starbucks and McDonalds dominate the consumer market in developing countries

This leads to a homogenous culture across the world.

35. Social Impact #2: Loss of local culture

Spread of different foreign cultures

countries might be uncomfortable that foreign cultures are affecting their youths as they lose interest in the local culture

Some people may see these foreign cultures as being forced onto them

E.g. pop culture rap music, MTV, Hollywood

37. Environmental impact

Globalisation can be a destructive force to the natural environment.

TNCs use natural resources at a rapid rate and care only about profits and not environmental protection

38. Environmental impact

Deforestation and related problems

Global warming

Environmental management

39. Environmental impact #1: Deforestation

Deforestation: cutting down of trees in forests and jungles

Many rainforests in many countries have been cut down to make way for the development of industries, agriculture, housing and transportation so as to make money for the country.

E.g. Brazil, Indonesia (pg. 59)

40. Environmental impact #1: Deforestation

The clearing of the forests has resulted in many environmental problems:

Soil erosion

Extinction of flora and fauna

Increase in flooding and haze (haze due to burning of forests)

44. Environmental impact #2: Global warming

Globalisation also causes global warming

Causes of global warming

Transportation of goods aeroplanes and ships produce large quantities of greenhouse gases

Factories produce large quantities of greenhouse gases

Such gases leads to an increase in the average global temperature

49. Environmental impact #3: Environmental management

Globalisation ALSO brought about an increase in awareness of environment development: sustainable development.

Sustainable development: development that meets the needs of the present without affecting the ability of future generations to meet their needs

51. Environmental impact #3: Environmental management

When the environment is well preserved, future generations can continue to use the resources to enjoy a high standard of living.

Possible alternative energy sources: wind, solar and geothermal power.

The challenge: to convince countries to find such alternative sources and find ways to generate power using those sources.

56.

Quick recap

57. How is Singapore affected by globalisation?

60. What is Singapores situation right now?

D isease outbreaks e.g. SARS, bird flu

R ise of China and India as competitors

E conomic slowdown in other countries

A geing population

M aturing domestic economy

T ransnational terrorism

61. Biggie question

How does Singapore stay relevant in a globalising world?

62. Strategies for survival

Diversifying the economy

Nurturing growth of Small and Medium Enterprises (SME)

Venturing abroad

Expanding market reach through economic cooperation

Managing resources efficicently

Developing people

Attracting foreign talent

Managing the environment

65.


Singapore aims to be

a centre for technology-intensive, high value-added manufacturing activities such as chemical engineering and pharmaceuticals.

Research and development

Attracting TNCs to set up their high value-added manufacturing activities here.

66.


Example: Seagate

The worlds largest manufacturer of hard disk drives.

Seagate has set up manufacturing facilities in Singapore.

Helped to generate jobs for Singaporeans

67.


Diversifying the economy helps not only to generate jobs for Singaporeans, it also helps to reduce Singapores dependence on a single industry or market. This means that even if one sector of the economy slows down, other sectors can help Singapores economy.

68. 2. Nurturing growth of Small and Medium Enterprises (SMEs)

SMEs play an important role in Singapores economy.

provide jobs to many Singaporeans

support the operations of TNCs by supplying them with components in the manufacturing process.

69.

However, SMEs are not very successful as they face many problems in running their businesses.

The government has many schemes to help nurture the growth of SMEs.

2. Nurturing growth of Small and Medium Enterprises (SMEs)

70.

Examples

Loan schemes from banks that cater to the needs of SMEs.

New companies are also granted tax exemption by the government on their first $100000 income for up to three years.


72.

Schemes are to help SMEs grow.

With the growth, SMEs can continue to enhance the attractiveness of Singapore as a regional manufacturing and service hub and help Singapores economy to grow.


73. 3. Venturing abroad

With limited land and labour resources, Singapore has to look beyond its national boundary to achieve further growth.

2 methods:

Regionalisation

Investing in new markets (in Middle East, Africa and Latin America)

74. 3. Venturing abroad

Regionalisation

Definition: Investing in nearby countries that have much land, lower labour costs and new markets.

Singapore government and companies may provide the expertise and money to develop industrial parks in the host countries and in return the host countries provide land and labour for Singapore companies.

This benefits both countries as well as promotes development in the region.

75.

Venturing abroad allows Singapore to maintain economic growth even if markets and investment opportunities in one particular region are weakened.

3. Venturing abroad

76. 4. Expanding market reach through economic cooperation

Due to Singapores small domestic market, there is a need to establish trade ties with countries around the world to enable local companies to sell their goods to a larger market.

77.

Example:

Free Trade Agreement (FTA) (pg.71)

FTAs with other countries to bring about closer economic collaboration.

Special Economic Zones (SEZs)

A geographical region in a country that has less strict economic laws than those in other parts of the country

This scheme uses tax and business incentives to attract foreign investments.

Zone of rapid economic growth

4. Expanding market reach through economic cooperation

79.

With economic cooperation, there will be expansion of market reach which will allow Singapore to generate more revenue and build up Singapores economy.

4. Expanding market reach through economic cooperation

80. 5. Managing resources efficiently

Developing people

Promoting local entrepreneurship and technopreneurship

Promoting continuous learning among the workforce


Managing the environment

Managing limited land resources

Cooperation with regional and international organisation

Public education

81. 5. Managing resources efficiently

Managing resources efficiently also allows Singapore to maximise its opportunities in a globalised world.

There is a need for Singapore to develop its people so that they can survive in a globalised world.

Singapore also needs to take care of its environment so that future generations can continue to enjoy the clean and green environment enjoyed by the present generation.

82.

Developing people:

Entrepreneurship and technopreneurship

Promoting continuous learning

5. Managing resources efficiently

84.



85.

Managing environment

Managing limited land use

Cooperation with regional and international organisations

Public education


86.

With the correct management of people and resources, sustainable development and progress for Singapore can be maintained and ensured.


Chapter 2 sustaining economic development

Education

attract foreign

expanding

added manufacturing

singapore

foreign cultures

local culture

economic impact

increased