Analyzing the Singapore Economy for Commonwealth Bank Expansion Plans

This report analyzes the Singapore economy, focusing on its characteristics, political and legal systems, and the role of government intervention. It examines the advantages Singapore offers for financial institutions like the Commonwealth Bank of Australia, considering factors like high literacy rates, a diverse population, and its position as a financial hub. The report also explores the impact of Singapore's economic system, its history, and the significance of international trade on the banking sector. It discusses both the positive and negative effects of government intervention on banks and provides insights into potential challenges and opportunities for the Commonwealth Bank's expansion into Singapore. The report concludes by highlighting the importance of competitive services and products in Singapore's highly developed financial market and the need to align business plans with government policies.

Running head: SINGAPORE ECONOMY
Singapore Economy
Name of the Student:
Name of the University:
Author Note:

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Table of Contents
Introduction:...............................................................................................................................3
Discussion:.................................................................................................................................3
Characteristics of the Singapore as a country and an Economy:...........................................3
Political and Legal System of Singapore:..............................................................................4
Intervention of the Government in Private Sector:................................................................5
Effect of Government intervention on banks:........................................................................5
Type of Economic System in Singapore:...............................................................................6
History of Singapore Economy:.............................................................................................6
International Trade and Its effect on the bank:......................................................................7
References:.................................................................................................................................8

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Introduction:
The financial sector is an important sector which helps in the boosting of the economy
and helps in the advancement of the businesses in the country. The financial sector comprises
of various industry such as the banking, insurance and various other industry which help the
businesses and the ultimately the general masses. Thus in this report the bank which is being
selected for the purpose of expansion is the Common Wealth Bank of Australia. The bank has
its presence in Australia, New Zealand, United States and some countries of Asia (Tremewan
2016).
Thus in this report the expansion of the Common Wealth Bank of Australia is
analysed in the country of Singapore. The various aspects which needs to be considered while
expanding to Singapore are presented with a relevant conclusion at the end of the report
(Chiu, 2018).
Discussion:
Characteristics of the Singapore as a country and an Economy:
The education is considered as one of the most basic important requirement in the
Singapore economy. The country has a rule of compulsory education of all the citizens which
are present in Singapore. The Literacy rate of the country as per UNESCO is at one of the
highest with 97.05% with the male corresponding to 98.73%, while the female corresponding
to 95.45%.
The country of Singapore is one of the smallest country which is located in south-east
Asia, but has been ranked as one of the best places to live in the world. The country is said to
be cosmopolitan country as it houses individuals from various nationalities. The family life

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and values come before all goals which are materialistic in nature in the country. The
transportation is one of the cheapest in Singapore with greater connectivity. The purchase of
a vehicle is an expensive option in Singapore but leasing a vehicle is a cheaper and viable
option (Rodan 2016).
Thus the citizens of Singapore being highly literate would enable the bank to bring
out financial products which would be easily understood by the masses. Also the wide range
of diversity in the country would enable the bank to expand its operations to other nearby
neighbouring developing countries. As Singapore is a financial hub for many financial
instruments the bank would be able to develop more competitive products. The country being
one of the most desired places to live will attract revenues from the local citizens and from
other nationalities around the world. The availability of employment which is skilled and
easily available since the country has a high literacy rate (Yeung, 2017).
The challenges faced by the bank would be to become highly competitive in its
operations and provide superior services. This is because Singapore has a highly developed
financial markets, and thus attracting business would require services and products which are
exceptionally competitive and beneficial for the masses and the bank (Lim, 2016).
Political and Legal System of Singapore:
The political system in Singapore is centralised and dictating, however the
environment is beneficial for the growth of the companies. The political climate in the
country is stable and has good governance policy which enables the expansion of companies
in Singapore. The legal system in Singapore follows the English Common law system. The
major laws are made and also amended using various statutes. The legal system also takes
reference from various case laws from other countries while making decisions in regards to

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Singaporean cases. The cases are taken from Australia, New Zealand and sometimes even
from India (Ooi & Comunian 2019).
Intervention of the Government in Private Sector:
The Singapore government intervenes in every aspect of the economy, although it is
highlighted to the external world as a free economy. The government intervenes in all the
aspects which range from planning and execution of policy in Singapore. The prices which
are concerned with the private sector are also influenced or determined by the government.
However, the intervention of the government created a positive value for the
economy. It helped and enhanced the welfare of the public. The government is determined in
creating jobs for the public and has huge retirement funds under its management (Ong, 2016).
This however, would benefit the commonwealth bank of Australia as the existing
policies of the government would be applicable on the bank. Thus the bank would be able to
enhance its business under the policies laid down by the government. The negative challenges
faced by the bank would be it would have to create a business plan which would benefit the
economy and the company along with it. The plan would be subject to interference from the
government and the bank would need to devise a plan which would be fitting for all (Ng,
2019).
Effect of Government intervention on banks:
The intervention of the government will have both a negative as well as a positive
effect on the bank. The positive effect of the intervention on the bank would be that the
policies which are determined by the bank would be beneficial for the economy. The
government will regulate the workings of the bank and thus the transparency would be
available to the general masses in this regard (Ong, Heng, & Chun, 2016).

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The negative effect of the intervention on the banks is the banks would need to deal
with the intervention of the government in its operations. Thus every decision would lead to
be subject to a delay which might cause loss the banks in terms of delay in implementing its
decision (Cao & Wang, 2017).
Type of Economic System in Singapore:
The economy in Singapore is favourable for business and is considered as one of the
developed financial sector. The economy is characterized as mixed capitalized with private
sector contributing to 60% of the GDP. The business are have very stable and relatively
corruption free. The government policy promotes savings and investments which is carried
out through compulsory saving in the central provident fund.
The location of Singapore provides it to be at a strategic advantage providing
economic importance in Asia. At a point of time in the past the country lacked resources and
had a very small domestic market. This was changed due to the policies adopted by the
government which were suitable and created an environment which was favourable for
business and export oriented industries. The major of the government expense is incurred in
regards with education and technology. Thus leading to rise in availability of skilled work
force and use of latest technology which helped in the rise in the economy (Rogerson, Anuar
& Huan, 2018).
History of Singapore Economy:
The Singapore economy was underdeveloped in the 1960 and had a very low GDP
which was less than $320. The economic growth of the country is due to the rise in
globalization, rise in free capital and education. Thus the geographic disadvantage of the
company was overcome and it helped the country to become a leader in business and
commerce.

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The country became free in the year 1965, and the country was going through a lot of
problems. The city faced unemployment and other social issues which were needed to be
addressed by the government.
Thus all the problems which were faced by the country were of imminent nature and
had to be addressed by the leaders of the country. Thus the leaders of the country tried to
expand the industry within the economy which was however, insufficient to boost the
economy. Thus the leaders of the country started with globalization which involves trading
with the developed countries. Thus to attract investments the environment in Singapore was
free of corruption and also the taxes were reduced for the country, and investments from
developed countries were attracted which helped in the rise of trade and commerce.
International Trade and Its effect on the bank:
The economy of Singapore had been export oriented from the time of its
independence. The growth of the economy is highly based on the exports which is made to
the developed countries such as the United States, Europe and other countries. The major
exports made by the economy is in regards to the computer parts and peripherals. The major
export is made to those countries and companies who had initially invested in the country.
Thus the economy of Singapore is highly export driven to developed countries which
contribute to the major part of its national GDP.
Thus since the economy is highly export driven, it requires presence of sound
financial institution which would provide the business with policies which help the business
to thrive. Thus the bank would be able to provide service to various business which are
export driven. Thus since the bank has its operation in United States and other export
countries with the country has its business. It would benefit the businesses in Singapore and
ultimately the bank.

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References:
Cao, B., & Wang, S. (2017). Opening up, international trade, and green technology
progress. Journal of Cleaner Production, 142, 1002-1012.
Chiu, S. W. K. (2018). City states in the global economy: Industrial restructuring in Hong
Kong and Singapore. Routledge.
Lim, L. Y. (2016). Fifty years of development in the Singapore economy: An introductory
review. In Singapore's Economic Development: Retrospection and Reflections (pp. 1-
15).
Ng, S. C. (2019). Vulnerability of port of Singapore as a maritime hub due to impact of
international trade affairs.
Ong, B., Heng, L., & Chun, J. (2016). Regulating International Trade in Endangered Species-
Transhipments of Cities-Listed Species via Singapore. Sing. J. Legal Stud., 277.
Ong, H. T. (2016). Singapore Economy and Environment in 2065. In SINGAPORE 2065:
Leading Insights on Economy and Environment from 50 Singapore Icons and
Beyond (pp. 373-380). Ong, H. T. (2016). Singapore Economy and Environment in
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50 Singapore Icons and Beyond (pp. 373-380).
Ooi, C. S., & Comunian, R. (2019). The artrepreneurial ecosystem in Singapore: Enabling
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Rodan, G. (2016). The political economy of Singapore's industrialization: national state and
international capital. Springer.
Rogerson, E., Anuar, A., & Huan, A. (2018). Singapore Trade Policy Forum.

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Tremewan, C. (2016). The political economy of social control in Singapore. Springer.
Yeung, H. W. C. (2017). The political economy of transnational corporations: a study of the
regionalization of Singaporean firms. In Singapore (pp. 57-84). Routledge.