Challenges+of+Globalization

__**Challenges of Globalisation**__

Singapore has pursued the “multilateral approach to trade and investment liberalization” as the primepolicy objective of its foreign economic policy. Singapore views the WTO as at the core of its tradepolicy strategy but also considers that trade liberalization efforts undertaken bilaterally and in regionalfora can accelerate the momentum towards trade liberalization and thus form building blocks for themultilateral trading system.

Its wider systemic strategy of regionalization and bilateral liberalization efforts can be defined as “the twin objectives of further internationalizing Singapore’s indigenous firms and assisting thetransnational restructuring and cost-competitive endeavours of hosted foreign TNCs in an adaptivecontext” by broadening geographical market access (“Foot in many doors” approach). Singapore’sregional, sub-regional and bilateral trade and investment liberalization policies are pursued thus aspart of “an outward-looking economic policy that uses a multi-level trade policy”.Singapore’s development of regional integration and globalization initiatives is due to its highdependence on two-way flows of trade and investment.

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 * "This tiny island republic sits on trillions of dollars in foreign reserves. Yet, Prime Minister Lee Hsien Loong said in a BBC interview this month that his country cannot spend its way out of the economic downturn, until the global economy heals.**=====

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 * Singapore, which has __no natural resources and a population of only four million__ has been badly bruised by the global economic turmoil and the latest figures by the Development Bank of Singapore says 99,000 people will be laid off this year.**=====

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 * "(These measures will) help companies to remain viable but we must understand that what we can do is to buffer the impact," Lee said, in an interview on BBC’s Asian Business Report. "You must wait for the storm to pass," he added.**=====

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 * During good times Singapore benefited greatly, but __when the economies of its trading partners in the West collapsed, this Southeast Asian tiger was among the first to be hit__. The government believes that it will take at least 2 to 3 years for the economy to recover.**=====

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 * The Asian Wall Street Journal, commenting on the emergency budget, said that the global economic crisis was a wake-up call for Singapore which has __depended heavily on export income that has resulted in the growth rate declining by 16.9 percent in the fourth quarter last year__. "Singapore’s economy would be more resilient if it were better balanced," the Journal argued pointing out that consumption was only 40 percent of GDP."**=====


 * Singapore's economy is diversified across manufacturing and services, but both are heavily exposed to global markets. As a city-state with a population of four million, businesses have far greater incentive to serve global markets than domestic consumption.

"There will have to be a global rebalancing because we cannot expect the Americans to be consumers of things made all over the world. And the rest of the world as savers, lending money to the US to buy things from you," MM Lee argued.

__Measures Taken :__**

As a small and open economy highly dependent on trade, Singapore has a strong interest in ensuringthat global trade is based on a strong rule-based multilateral trading system where goods and servicescan flow freely with minimum impediment. Singapore also actively supports regional initiatives that are complementary to the World Trade Organization (WTO) process.

===**FTA Definition : A Free Trade Agreement (FTA) is a legally binding agreement between 2 or more countries to reduceor eliminate barriers to trade, and facilitate the cross border movement of goods and services betweenthe territories of the Parties.**===

Singapore's FTAs have been instrumental in helping Singapore-based businesses strengthen crossbordertrade by eliminating or reducing import tariff rates, providing preferential access toservices sectors, easing investment rules, improving intellectual property regulations, and openinggovernment procurement opportunities.

===IGA Definition : An investment guarantee agreement is designed to promote greater investment flows between the twocountries by providing a legal framework that clearly sets out investment norms and protection wheninvesting in the other country. The usual provisions of an IGA include principle of fair and equitabletreatment; principle of non discrimination (National Treatment and/or Most Favoured Treatment);compensation in the event of expropriation; free transfer of funds; and investor-state disputesettlement mechanism.===

A typical IGA defines ‘investment’ as ‘every kind of asset permitted by each Contracting Party inaccordance with its laws and regulations, including, though not exclusively, any: moveable andimmovable property and other property rights such as mortgages, liens, or pledges; shares, stocks,debentures, and similar interests in companies; claims to money or to any performance under contracthaving an economic value; intellectual property rights and goodwill, and; business concessionsconferred by law or under contract, including any concession to search for, cultivate, extract orexploit natural resources.’