How we teach economics tuition in Singapore

Call Simon @ 96890510 to learn more about our economics tuition

We teach in an exam-oriented approach, by going through jc economics model essays. We use a structural approach as well, by sample model essays for emulations, CSQ practices and discussion with sample answer. We teach through reflective discussion, so that students are exposed to knowledge about economics knowledge are applied and learnt. We teach to induce thinking as we seek to nurture students in their application.

Qn 1: Assess the economic performance of Singapore from 2016 to 2017

The aims of the government are seen in terms of price stability, low unemployment, economic growth and external equilibrium. In order to examine whether Singapore has been able to achieve the aims of government from 2016 to 2017, there is a need to assess the economic performance of Singapore during the same period. The economic performance of Singapore can be measured by assessing the unemployment rate, consumer price index, exchange-rate variation, level of investment, level of balance of trade and sectoral performance of Singapore.

First, the GDP growth rate or the value of the GDP will reflect the level of production capacity which measures the monetary level of the total goods and services produced within Singapore. This will reflect the productivity of the economy as the comparison is made over a previous year.

Second, the consumer price index will reflect the level of price stability in Singapore as a rise in the consumer price index would mean the economy is experiencing inflation and it may undermine the economy from attaining sustainable economic growth as the economy will experience rising cost condition.

The unemployment rate can also help to assess the economic performance of Singapore as the rate of utilization of resources will mean that the economy attained the production efficiency as it has produced on the production possibility curve. Therefore, if Singapore employment rate from 2016-2017 is low, it will indicate that her economy has attained production efficiency which indicates that Singapore economy from 2016 to 2017 is doing well.

Additionally, the sectoral analysis will reveal the scope of economic development as it will reveal the areas of specialization of the Singapore economy and its extent of depth of the development of the economy. This can be seen by examining the percentage of contribution of the sectors to the GDP and the extent of growth the sector over time.

The level of investment in the Singapore can also assess the economic performance, especially in a open economy such as Singapore, the foreign direct investment will raise production, leading to higher level of national income and employment. Higher level of investment in the areas of infrastructural development and research and development will expand the mobility of resources and efficiency in production and thus, expanding potential growth and raising actual production.

Lastly, the level of balance of trade is critical in the examination of international of economic performance, especially for export-oriented country like Singapore which rely extensively on external trade for growth. Balance of trade surplus would mean that there is a higher level of export demand which will induce a higher of local production that will raise national income and employment. When the total trade in proportion to the GDP increase, it implies that the Singapore’s economy resource and production capacity has expanded which will be an indication of economic growth for countries which rely extensively on trade for growth.

The positive and negative effects of the indicators will allow us to analyse the economic performance of Singapore.

In 2017 the GDP growth rate showed a positive effect of the indicators as Singapore GDP grew 3.5 percent. As such, this shows that there is an increase in the level of production capacity which will indicate a positive economic performance in 2017.
Similarly, the unemployment rates in Singapore showed a positive effect of the indicator as unemployment rate have remained low in 2017 at 3%. As such, there is a greater employment utilization of resources. Hence, the production efficiency in Singapore in the year 2017 is attained.

Furthermore, Singapore achieved a record high US$229 million Fintech (Financial Technology) funding in 2017 which indicates a higher level of investment in Singapore. Therefore, the higher level of investment will indicate the positive effect on the indicators since the increase in investment will raise production, leading to higher level of national income and employment.

Moreover, Singapore’s trade of balance is in surplus where it amounted to 45.55 billion US dollars in 2017. Hence, as stated earlier, the balance of trade surplus will indicate that there is a higher level of export demand which will induce a higher of local production that will raise national income and employment. As a result, this shows a positive effect of the indicator.

The consumer price index rose 0.6 per cent in 2017 which may imply that Singapore economy is experiencing rising cost condition hence showing a negative effect of the indicators. However, the rise in the consumer price is very mild which can imply that the percentage of price level did not rise above the percentage increase in GDP. Hence this will still reflect a stability in price level in the economy hence in turn, shows a positive effect on the indicator.

In conclusion, economic performance of Singapore can be analysed with the help of the economic indicator. Since in the year 2017, the economic indicators showed a positive effect when analysed Singapore’s performance, this implies Singapore has a positive economic performance.

Qn 2: Analyse the economic challenges Singapore will face in the coming years

Singapore economy as a whole has been on a steady path and at a stable level. However, Singapore is not immune to challenges in the future that may have significant effects on her economy. Being a developed country with adverse global development, Singapore faces both internal and external challenges which will be explained in this essay.

The first internal challenge that Singapore is the yearly wage increment. The wage increment helps to increase the workers’ wage which can help solve income inequality and raise purchasing power. However, economic challenges can arise as the increase in wage can increase the cost of production which will lead to a reduction in aggregate supply, hence contributing to a shortage or excess demand condition, leading to increase in price level. Wage increment is also affected by the failure to raise productivity to help to dampen cost of production. Although many initiatives by Spring Singapore have been helpful and successful in raising our productivity, especially for SMEs, the wage increment as the key reason undermining our competitiveness cannot be ignored.

Second, Singapore is a small country. As such, in the coming years, there is a high possibility that Singapore will face land scarcity as it continues to develop. This will create an excess demand condition such that this will increase the price of rental. The increase in cost of production will lead to a reduction in aggregate supply, contributing to a shortage or excess demand condition leading to an increase in price level. The failure to address this issue will lead to the failure of retail trade and related areas such as tourism.

Furthermore, Singapore’s focus on high economic growth can create the challenge of skill incompatibility. This can lead to structural unemployment as the economy focuses on high-valued production, which is capital-intensive and technological-based. Consequently, skill incompatibility and displacement of workers will occur as a result of technological and sectoral advancements. Our need to focus on high-valued production will give rise to structural unemployment which can be detrimental as this form of unemployment is often entrenched and prolonged.

Lastly, Singapore’s ageing population can also create a challenge of having an ageing labour force. It is said that in 2018 there will be the same number of people above 65 as those under 15 for the first time in history. This ageing population may create problems as it may be hard for the older generation to adapt quickly to the changes of market condition while Singapore nurtures a capital-intensive and technological-based workforce. This will similarly result in skill incompatibility that inadvertently displaces labourers due to advancements in the technological and sectoral aspects. Furthermore, the greying population will give rise to a further need to increase personal medical expenditure, not to mention the increasing burden placed on the government to provide more fiscal funding for the retirees. Consequently, our present budget diminishes, which may pave the way for greater taxation for the next generation.

In the likes of external challenges, Singapore’s vulnerability in the coming year is to be closely monitored. Protectionism of foreign nations against Singapore will have a significant impact on a small and open economy such as Singapore’s. Prospects of the US trade protectionism strategy against China along with the collapse of the Trans-Pacific Partnership will end the era of flourishing Free-Trade. Tariffs, by its protectionist nature, significantly increase the price of imports which leads to a reduction of quantity demanded for imports. This results in cost-push inflation, causing the fall in local production which raises unemployment and hampers economic growth.

Lastly, the level of balance of trade is critical in the examination of international of economic performance, especially for export-oriented country like Singapore which rely extensively on external trade for growth. Balance of trade surplus would mean that there is a higher level of export demand which will induce a higher of local production that will raise national income and employment. When the total trade in proportion to the GDP increase, it implies that the Singapore’s economy resource and production capacity has expanded which will be an indication of economic growth for countries which rely extensively on trade for growth.

A second external challenge that Singapore is vulnerable to, is the challenging complexity from the One Belt, One Road Initiative. This is one of the key geopolitical and strategic developments where it aims to connect the eastern part of China cities to Europe through the Indian Ocean and the South China Sea. This may have adverse impact on Singapore as the initiative may result in the construction of a new deep-sea port-off Malacca and extensions in Port Klang that can potentially lead to less ships needing to pass through Singapore, especially if the ports are positioned north of Singapore. Resultingly, Singapore, as a small economy that heavily depends on trading activities, will have its economic growth stunted when trading activities fall.

Economics Focus Online Discussion

Given our economic performance in year 2017, Singapore has performed well under circumstances. However, the challenges that lie ahead are also adverse and pressuring for Singapore.

Based on the given context, what policies would you recommend Singapore to adopt in order to overcome the economic challanges ahead and achieve her economic aims? Provide your views and opinions in the commentary box below.