Hi, Qn on How does Singapore compete with emerging markets in attracting Foreign Direct Investment. Pls help with the grammar/content, even if you are not familiar with the background/topic, do tell me with part is confusing because its not meant for professional only. (Foreign Direct Investment- foreign firms invest in a country by setting up factories and operation lines, different from short term speculation like buying shares...)
Thanks!
Singapore has an open and export oriented economy, with export hitting 186% of 2008 GDP. International trade is vital, if not most important, to the growth and development of Singapore economy. Trade, in turn, affects Singapore inward FDI. It is unwise to plan FDI strategy without putting trade into consideration.
The rise of emerging economies create challenges as well as opportunities. Like trade, Singapore can exploit its comparative advantage in attracting FDI. As foreign investors and MNCs will notice the changes in regional trade pattern, Singapore can benefit from the emergence of these countries by targeting FDI in sectors that are complementary to the comparative advantage pattern of China and India (eg, specialised professional services), especially as growth in such countries create a shortage in such areas. At the same time, Singapore should shrift away from FDI in labour-intensive or manufacturing industries that are threaten by their counterparts in emerging countries. Complementary instead of head on competition should see a substantial change in Singapore's FDI pattern, but not necessary a drop in total FDI. It will be easier to persuade foreign firms to invest in industries enjoying trade advantage; and MNCs will response to Singapore's efforts in developing promising industries by increasing FDI.
Furthermore, Singapore should actively establish FTA with more countries. The reduction of trade barrier between FTA members will boost the flow of intermediate inputs across borders and will therefore tend to increase direct investment by vertically-integrated MNCs (eg outsourcing certain part of the supply chain to Singapore). Having free access to more markets, Singapore will also be increasingly attractive for MNCs to set up regional HQ.
Singapore should also maintain an investment and business friendly environment. These include enhancing investment rights, and free transfer of investment capital in and out of the country. Political stability, an efficient but non-corrupted government, as well as a skilled workforce would also help Singapore to be an attracting alternative to emerging countries as FDI destinations.
Thanks!
Singapore has an open and export oriented economy, with export hitting 186% of 2008 GDP. International trade is vital, if not most important, to the growth and development of Singapore economy. Trade, in turn, affects Singapore inward FDI. It is unwise to plan FDI strategy without putting trade into consideration.
The rise of emerging economies create challenges as well as opportunities. Like trade, Singapore can exploit its comparative advantage in attracting FDI. As foreign investors and MNCs will notice the changes in regional trade pattern, Singapore can benefit from the emergence of these countries by targeting FDI in sectors that are complementary to the comparative advantage pattern of China and India (eg, specialised professional services), especially as growth in such countries create a shortage in such areas. At the same time, Singapore should shrift away from FDI in labour-intensive or manufacturing industries that are threaten by their counterparts in emerging countries. Complementary instead of head on competition should see a substantial change in Singapore's FDI pattern, but not necessary a drop in total FDI. It will be easier to persuade foreign firms to invest in industries enjoying trade advantage; and MNCs will response to Singapore's efforts in developing promising industries by increasing FDI.
Furthermore, Singapore should actively establish FTA with more countries. The reduction of trade barrier between FTA members will boost the flow of intermediate inputs across borders and will therefore tend to increase direct investment by vertically-integrated MNCs (eg outsourcing certain part of the supply chain to Singapore). Having free access to more markets, Singapore will also be increasingly attractive for MNCs to set up regional HQ.
Singapore should also maintain an investment and business friendly environment. These include enhancing investment rights, and free transfer of investment capital in and out of the country. Political stability, an efficient but non-corrupted government, as well as a skilled workforce would also help Singapore to be an attracting alternative to emerging countries as FDI destinations.
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