TO5202 - Singapore's Economy: Analyzing the Role of Tourism Sector

This essay examines the interplay between tourism and the developed economy of Singapore. It begins by defining the characteristics of a developed economy, focusing on Singapore's high GDP, low unemployment, and robust industrial sectors like agriculture, manufacturing, and services. The paper analyzes the historical development of Singapore's economy since its independence, highlighting the role of government initiatives in attracting foreign investment and improving living standards. It also discusses the government's influence on key economic indicators such as interest rates, foreign direct investment, and public debt. The essay then evaluates the tourism development in Singapore, its contribution to the national economy, and concludes by suggesting strategies for enhancing tourism in specific locations within the country. This document is available on Desklib, a platform offering a wide range of academic resources for students.

Running head: ECONOMY OF A DEVELOPED COUNTRY AND TOURISM
Economy of a Developed Country and Tourism
Name of the Student
Name of the University
Author Note

1ECONOMY OF A DEVELOPED COUNTRY AND TOURISM
Table of Contents
Introduction:...............................................................................................................................3
Developed economy:..................................................................................................................4
Government Influence:...............................................................................................................7
Tourism Development:...............................................................................................................8
Local impacts and business development:...............................................................................10
Conclusion:..............................................................................................................................12
References:...............................................................................................................................13

2ECONOMY OF A DEVELOPED COUNTRY AND TOURISM
Introduction:
The modern business world is observed to be significantly facing the impact of the
varying economy. The business entrepreneurs are seen to search for the sustainable business
opportunities and in doing so, they are facing the need to identify potential field of business
that will enable them the desired growth. Under such situation, the increment in the tourism
business is having a genuine impact on the modern day entrepreneurs as it is seen that the
concerned business industry is associated with significant growth and improvement over the
years (Sharpley & Telfer, 2014). The concerned business sector is considered as one of the
few industries which faces significantly less strict rules and regulation from the part of the
government due to the number of benefits that it offer to the regional society like the
economic development, the generation of the employment, the exchange of the culture,
tradition, language and the societal values (Chou, 2013).
However it is seen that the modern tourism industries and the growth of the business
associated with it, are notably dependent on the regional and the national economy of that
region. The various aspects of the national economy like the GDP, interest rates, foreign debt
on the nation, the value of the currency of that nation and the life style of the people of the
nation have great potential to influence the business (Webster & Ivanov, 2014). The variation
in the status of a country from developed to developing or vice versa is observed to affect the
tourism business in a significant manner as that has great influence on the intention of
purchasing of the people of that region. The paper is focused in the elaboration of a
developed economy in the form of Singapore with a precise focus on the various important
aspects of the economy like the GDP growth, interest rates, foreign debt, value of the
currency and the personal wellbeing of the people of the nation. Apart from this, the paper
evaluates the tourism development in the mentioned country and the contribution of the

3ECONOMY OF A DEVELOPED COUNTRY AND TOURISM
national government in that as well. In addition to this, the paper identifies a specific location
in the country and discusses regarding the actions that are needed to be taken in order to
develop the tourism business of that location.
Developed economy:
The definition of the developed country is observed to be significantly influenced by
some of the criteria in the modern business context. The tag is observed to be dependent on
the income per capita and the countries with high GDP that is the gross domestic product are
considered to be the developed countries (Stylidis & Terzidou, 2014). Apart from this, one
major aspect in the evaluation of the status is seen to be the industrialization where the
nations with the tertiary and quaternary sectors of the industry are seen to be considered as
the developed country (Boukas & Ziakas, 2013). Apart from these two, another important
aspect for the measurement of the development of a country’s economy is observed to be
with the Human Development Index or HDI (Bhuiyan, Siwar & Ismail, 2013). This
comprises with the economic measure, the literacy rates, the national income and the amount
of resources that a country is observed to have. Depending on the above mentioned criterions,
the chosen country for the paper is Singapore.
The factors that indicate the stage of development for the chosen country, Singapore,
is the high national income of 52600 US dollars per capita for the country in the year 2017
(Mof.gov.sg, 2019). Along with that, the country is seen to be at the 37th place in the list of
nominal GDP and at 39th in the PPP GDP rank. The GDP of the country in the year 2018 is
349.7 billion US dollar in nominal and in PPP, which is 554.9 billion US dollars
(Statista.com, 2019). Apart from this, the significant decrement in the rate of the
unemployment of the country is seen to be only 2.1% in the year 2017 (Mof.gov.sg, 2019).
The government is able to manage the inflation rate to only 0.4% in the year 2017

4ECONOMY OF A DEVELOPED COUNTRY AND TOURISM
(Mof.gov.sg, 2019). The major developmental work that happened in the economy of
Singapore is due to the sharp rise in the profit margins of the organizations operating in the
industries like the Agriculture, manufacturing and the service industry. The significant
increment in the labour force employed in the agriculture industry is a notable factor
responsible in the emergence of the sector as one of the prominent one in the country’s
economy. The agriculture sector is able to show a labour force by occupation of 0.96%
(Eresources.nlb.gov.sg, 2019). Apart from this, two other industries which are significantly
crucial in the development of the Singapore’s economy are the manufacturing and the service
industry. Both of the industries are observed to have a GDP of 26.6% and 73.4% respectively
in the year 2016 (Eresources.nlb.gov.sg, 2019). Along with that, the importance of the two
mentioned sectors in the growth of the economy of Singapore is pretty evident with the
statistics of the labour force by occupation of the two industries where the manufacturing
industry is seen to cover 15.5%. On the other hand the service industry has the maximum
coverage with 83.5% in the year 2016 (Eresources.nlb.gov.sg, 2019).
Along with these aspects, the GDP growth of the country in the year 2017 is observed
to be 3.7% which is approaching towards the average rate of the health economy. In terms of
GDP per capita, the country stands at the 9th place considering the nominal. On the other
hand, the rank of the country in the PPP GDP per capita is 3rd. Along with this, the rate of
literacy in Singapore has increased in a significant manner as statistics claim that the rate of
the male literacy in the country is 98.7% in the year 2016 compared to 96.4% of 2014
(Msf.gov.sg, 2019). At the same time, the literacy rate of the females in the country has
increased over the years. The statistics in this aspect clearly shows that the literacy rate for
the females in the country in the year 2012 was 94.4% and that increased to 95.4% in the year
2016. Apart from that, the development of the economy is significantly influenced with the

5ECONOMY OF A DEVELOPED COUNTRY AND TOURISM
rise in the population of the country which increased from 5074252 of 2010 to 5791901 of
2018 and is expected to rise to 5868104 in the year 2019 (Data.gov.sg, 2019).
The history of the Singapore’s economy is notably dependent on the activities after
the independence. The country’s economy is seen to develop in a significant manner from the
low economy status to the high economy status with an average GDP growth in the city-state
of 7.7% from the time of the independence. After the independence, the country was
observed to face significant economical crisis where it faced high average unemployment rate
of 14%, considerably small GDP per capita of 516 US dollars (Worldbank.org, 2019). Along
with this, majority of the people of the country lived in overcrowded conditions, creation of
several slums and more importantly majority of the people of the country were illiterate. In
order to counter this, the government of the country introduced economic development board
to trigger the investment drive. This was significant in making Singapore an attractive spot
for the foreign investment. As a result of the investment drive, the company’s capital stock
increased to 33 times by the year 1992 and the capital-labour ratio increased in a significant
manner. The improvement in the way of living was significant as the above mentioned
activities were able to increase the number of families belonging to the middle income status.
Lee Kuan-Yew, the prime minister of Singapore during that time was observed to comment
on the success of the plan by stating that the investment drive was able to convert 80% of the
Singaporeans as member of the middle-class depending on the home ownership criterion
(Worldbank.org, 2019). This over the year developed the Singaporean economy in such a
manner that the people of the country are able to experience a healthy way of living. The
country is currently at the second position in the index of ease of doing business. The
mentioned statistics along with the high literacy rates are significant in specifying the practice
of a healthy way of living of the people of the country.

6ECONOMY OF A DEVELOPED COUNTRY AND TOURISM
The Singaporean economy is expected to develop in a significant manner in the
coming years and that is evident with the forecast of the unemployment rate, inflation rate,
government debt to budget, corporate tax rate and the personal income tax rate. The growth
rate is expected to reach 2.7% in the year 2020. Apart from this, the unemployment rate will
decrease to 2%, inflation rate will be at 2.2%, government debt to GDP will be at 108%, the
corporate tax rate will be at 17% and the personal income tax rate will be at 23%
(Worldbank.org, 2019).
Government Influence:
As mentioned earlier, the country is experiencing a GDP growth rate of 3.6% and that
is expected to decrease in a significant manner in the coming years. The government of the
country is trying their level best with the bulk investment in the sectors like chemicals,
electronics, petroleum refining, offshore construction and in the export and import business.
The country is able to acquire 329.7 billion US dollar in export business in the year 2016 and
the sum is expected to increase only. Along with this, the country generated revenue of 69.45
billion Singaporean dollars in the year 2017 (Mti.gov.sg, 2019). Thus, the mentioned revenue
and the generation of the profit in the export and other businesses are notably improving the
GDP of the country.
The government’s investment in the sectors like the manufacturing, service, oil,
electronics and the exports are notable in the development of the country. Apart from this, the
management of the assets by the government of Singapore is a crucial factor in having a
stable interest rate. The country is currently observed to have an interest rate of 1.97 which is
expected to decrease in the coming years. The country is observed to have an FDI inward
stock of 1.096 trillion US dollar and 682.4 billion US dollars as outward FDI stock in the
year 2016 (Mti.gov.sg, 2019). Along with this, the government of the country is able to

7ECONOMY OF A DEVELOPED COUNTRY AND TOURISM
manage the public debt in a notable manner which in the year 2016 was calculated to be
110.5% of the GDP. However the government is unable to manage the value of the currency
in the recent years. In 1981, the country experienced a state where 1 US dollar was equivalent
to 2.05 Singaporean dollars (Exchange-rates.org, 2019). Over the years, the government was
able to manage it and that is evident with the statistics of the currency in the year 2005 when
1 US dollar was equivalent to 1.67 Singaporean dollars. But in the last 10-12 years, the
government was unable to manage it in an efficient manner and that is evident with the
decrement of the value of the Singaporean dollar compared to the US dollar. In the year 2013,
1 US dollar was equivalent to 1.25 Singaporean dollars and in the year 2016 that is same as
1.37 Singaporean dollars (Exchange-rates.org, 2019).
The country’s total trade is seen to be 982 billion Singaporean dollars in the year
2014. Singapore is considered to be a notable place for business conduction due to the
significant ease of doing business. The Singapore Economic Development Board is observed
to play a crucial role in attracting the foreign business organizations and that is visible with
the increment in the export and import for the country. The country is able to form
partnership with China (13%), Hong Kong (13%), Malaysia (11%), European Union (9%)
and Indonesia (8%) for the export business and on the other hand the partnership for the
import business is well distributed between the countries like China (14%), European Union
(14%), Malaysia (11%), United States (11%) and Taiwan (8%) (Mti.gov.sg, 2019).
The suitable environment for the business in the country is notably visible with the
ranking of the country in the index of ease of doing business. As mentioned earlier, the
chosen country is the second best country in the world for the conduction of the business.
Along with that, the Gini coefficient of the country which was 46.4 in the year, portrays the
fact that the wealth distribution is comparatively equal (Singstat.gov.sg, 2019).

8ECONOMY OF A DEVELOPED COUNTRY AND TOURISM
(Courtesy: Statista.com, 2019)
Tourism Development:
Singapore as a country is a notable destination in the Asian tourism. The country is
filled with spots that have the potential to attract the global tourists. The variety in the
tourism of the country is pretty evident and that plays a crucial role in the emergence of the
country as a total package for tourism to the tourists. The country provides the optimum
quality experience of Marina Bay Sands, Gardens by the Bay, Botanic Garden, Singapore
Zoo, Singapore Flyer, Chinatown, Clarke Quay, Universal Studios Singapore, Asian
Cavitations Museum and the great Merlion Park which is considered to be the hallmark of the
Singaporean tourism (Stb.gov.sg, 2019).
The country is observed to have significant infrastructure which is one of the best in
Asia. The focus of the national government on the tourism destinations is pretty visible with
the creation of them in alignment with the tourism concept. The country is seen to have
considerable number of islands and the infrastructural development of those places is visible
from the increment in the number of the tourists ravelling there. Apart from this, the country

9ECONOMY OF A DEVELOPED COUNTRY AND TOURISM
requires a restructuring in the transportation system. The increment in the frequency of the
travel mediums like buses or other vehicles which will be able to connect the mentioned
notable tourist destination will be of great significance in producing the much needed ease to
the foreign tourists. Along with that, the high speed railway system is needed to be aligned
with the needs of the tourists. The government must focus on introduction of the trains which
will reduce the complexity of the travel and the same time, will reduce the consumed time for
travelling. Along with this, the government must take initiative to increase the frequency of
the flights for those destinations with effective tie-up with the organizations like Jetstar Asia
Airways, Silkair, Singapore Airlines and Tiger Airways (Caas.gov.sg, 2019).
The local organizations which are conducting the tourism activities or the group tours
to the above mentioned locations are is in need to be encouraged with effective rewards like
land lease, tax relaxation, reduction in the strictness on the application of the general rules of
sustainable environment. The Singaporean tourism board plays a crucial role in the
development of the tourism activities in the country and are in need to be encouraged with
notable allocation of budget. This will make sure that the board be able to improve the
available infrastructure of the nation.
As the modern tourism business is significantly service oriented, the quality of the
services that the employees of the organizations in this industry offer to the customers,
notably matters. The service quality of the employees is responsible in influencing the
intention of repetitive purchases of the customers. As Singapore is experiencing higher
number of foreign tourists, the employees are needed to be trained in the aspect of the
cultural assimilation in order to make sure that the customers do not feel the cultural shock or
differences from the services of the employees (Guo & Sun, 2016). Hence the training for the
reduction of the cultural differences is recommended to the employees of the industry. In
addition to this, the organizations are in need hire employees who have the education of hotel

10ECONOMY OF A DEVELOPED COUNTRY AND TOURISM
management so that they do not feel any sort of massive problems in dealing with the
customers.
The notable destinations of the nation are seen to be surrounded with significant
promotional activities. However the not so popular locations which are generally the islands,
zoo or the wild life gardens are observed to face the absence of the effective marketing
activity. The government needs to make sure that these destinations are well covered through
the tourism promotional and marketing activities of the country. The Singaporean
government needs to include these destinations in the annual marketing brochure for the
country’s tourism and this will enable the destinations to have a greater chance of achieving
the limelight in front of the foreign tourists (Sharpley & Telfer, 2014). As the modern
generation tourists are significantly tech-savvy, the government needs to focus on the
promotional activities through the social media platforms like Facebook, Twitter or
YouTube. This will enable the government to reach to larger amount of tourists in an
effortless manner.
Local impacts and business development:
The chosen destination for the case is the Pulau Ubin. The destination is not a major
attraction of the Singaporean tourism compared to the other destinations. However, the place
has all the potential to become one of the prominent names in the list of the tourist
destinations in the country. The destination is at the north east region of Singapore and covers
a ground of 10.19 square kilometer (Stb.gov.sg, 2019). The town council for the place is the
East Coast-Fengshan Town Council and the ethnic groups that are present in that region are
the Chinese Singaporean and the Malay Singaporean (Stb.gov.sg, 2019). The location is an
island with considerable amount of natural elements in it. The various kinds of wild life
creatures and the animals that are present in the islands make it look significantly attractive.

11ECONOMY OF A DEVELOPED COUNTRY AND TOURISM
The place has the potential to attract the tourists who have the interest to view the pure nature
in a significantly developed country where the share of greenery is decreasing. Along with
this, the activities like boating or safaris will be of great significance in attracting the
customers. Apart from the wild life and the natural resources, the place has great significance
for the portrayal of the ancient culture and traditions of the local residents and the reflection
of their societal values through the mode of construction of their houses (Smartnet.niua.org,
2019).
The notable increment in the interest among the customers or tourists for the location
is a genuine triggering factor for the local finance providers. Along with this, the popularity
that the activities like boating and the wild life safari or the traditional performances of the
local residents, are able to gain in the tourist groups that visited the place, produces an
absolute base for the larger investments in that region (Sharpley, 2018).
It is seen that Singaporean economy is largely dependent on the tourism sector and a
large share of revenue belongs to the mentioned sector. This makes it pretty evident that the
government is not concerned in employing strict rules which can hamper the business. Rather
it is seen that, the government is only concerned with only the implementation of the
environmental acts like Environmental Public Health Act of 1987 and Environmental
Pollution Control Act of 1999 (Supremecourt.gov.sg, 2019). Apart from this, the government
is influenced with the application of the National Environmental Agency Legislation and the
Singapore green plan.
Apart from this, the plan of developing the chosen location as a place for the tourism
will be of great significance for the local community as the plan will be instrumental in the
generation of increased employment (Edgell Sr, 2016). The economic condition of the region
is expected to get better and along with that the society of that particular region will be

12ECONOMY OF A DEVELOPED COUNTRY AND TOURISM
subjected to a significant development. The plan will certainly increase the skills and
competencies of the people of that region in making them eligible to serve in the industry.
This will be of great significance as the way of living and the literacy rates in the region will
certainly increase.
Conclusion:
On a concluding note, the Singaporean economy is taking giant steps towards the
rapid development in the modern century. The country is expected to be a major power house
in the Asian region. The economic growth of the country is competing with the United States
and China in terms of the speed of development. Apart from that, the notable development of
the tourism industry in the country is considered to be a major reason behind the rapid
economic development of the country.

13ECONOMY OF A DEVELOPED COUNTRY AND TOURISM
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14ECONOMY OF A DEVELOPED COUNTRY AND TOURISM
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