Economic Growth and Development in Singapore

Economic Growth and Development in Singapore

Past and Future

Gavin Peebles and Peter Wilson

In this book Gavin Peebles and Peter Wilson offer an historical overview of the rapid growth and development of the Singapore economy, detailing the institutions and policies which have made this growth possible. They examine the current state of the economy and its future in terms of prospective growth and structural change.

Chapter 8: International Finance and Growth

Gavin Peebles and Peter Wilson

Subjects: economics and finance, economic psychology


8. International finance and growth Between 1965 and the mid 1980s Singapore achieved rapid export-led growth and industrialization without encountering any significant balance of payments problems. The current account was in persistent deficit over this period but was more than covered by a high level of national savings and a continuous inflow of productive export-oriented foreign direct investment. Exchange rate policy has also been remarkably successful in the last two decades in delivering fast growth, low and stable price inflation, and a strong external position without the need for a deliberate weakening of the currency. At the same time, despite a small domestic resource base, Singapore has become a major foreign exchange and international banking centre and the location for the Asian Dollar Market (ADM), one of the largest offshore money markets in the world. Yet Singapore still exhibits some of the features of an underdeveloped economy insofar as capital markets are relatively immature in terms of fixed income assets, equities and the fund management industry, and the impotence of conventional monetary and fiscal policy in such an open economy has limited the options available to the government to implement macro-stabilization policies. These features, together with the characteristics discussed in the previous chapter of extreme openness to trade and factor flows, ‘dependence’ on foreign resources, and vulnerability to external shocks, has provided the rationale for a development strategy based on high levels of forced saving through the CPF, high levels of centrally directed investment, a...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information