Economic Regulation By the Singapore Government - Assignment Example

DRAFT Economic Regulation By Singapore Government Introduction Economic regulation refers to government involvement in business activities in the country to manipulate the conduct of business entities and public in the private sector. This may take the forms of public spending, dues, nationalization, lending, interests’ rates and ethical suasion. The regulations become a tool for thinning choice in definite areas that may include prices of goods and services, supply of commodities, rates of returns, information revelation, change in methods of production, setting standards for goods and services and a perfect tool for influencing some habits. The overall goals for economic regulation are therefore an improvement of the efficiency in the allocation and use of resources, modify the distribution of income and achieve cultural changes. Reasons for Economic Regulation the government of Singapore, by focusing on communication infrastructure aims at ensuring a quality and most efficient communications which will play a very significant role in sustaining a viable and growing economy since all the services required by business entities and the people are readily available. This will therefore ensure reduced losses and speedier production of goods and services that in turn will lead to improved earnings. Since the aggressive markets mostly the most excellent during the long run periods of production, they have to be protected and developed. These markets are most efficient in encouraging investment and production of high quality goods and services. The government is therefore intervening to prevent the formation of monopolies, which under the present industrial patterns will hinder effectual competition. Consumers will thus enjoy protection through the provision of high quality, dependable and unrelenting services. By focusing on some specific sectors such as ICT, the government is not only going to improve the economy but also ensure that the goods and services produced in Singapore can compete in the global market. This will uplift the standards of living and expand the country’s exportation opportunities. The government is encouraging employment, training and development of the local people. This will have an impact of reducing overdependence on expensive imported labour and also improve service delivery to consumers and ensure that societal and ecological goals achieved efficiently. The government through its policies in economic regulation will be able to safeguard and maintain the strengths of the country’s economic system observed in the past years. Given the number of challenges for the country’s infrastructure, the governments have a vital role in reinforcing the key fundamentals and provide lucidity, confidence and steadiness for future. Arguments for the government economic regulation Free markets typically enable the public to achieve what they can best achieve as well as encouraging efficiency through increased competition. In addition, free markets cultivate responsible behavior and enhance production of high quality goods and services in the country. However, there are some significant exceptions in this phenomenon in that sometimes-free markets fail to attain optimum effectiveness leading to wastage of resources. For example in the provision of utility services, there will be a lot of duplication in the case of free competition, which lead to wasteful utilization of resources. In addition, sometimes the markets misjudge or fail to identify what is most important. For example, markets do not adequately react to medical and safety matters, equality in employment and trade. This calls for government intervention to correct such market failures, which aim at improving the welfare of the society. There is the need for government to intervene and correct where there is judicial inefficiency. For example, in the case of pollution, though one who causes pollution of the environment will face prosecution in a court of law; there are some circumstances in which this is impossible. Small amount of waste emission into the environment can cause damages to individuals whom it is difficult to identify. Since this can result to judicial inefficiency owing to the fact that a threshold of these emissions is necessary to cause adverse effects, the government must intervene to put corrective measures. Arguments against economic regulation The establishment of monopolies through regulation like in the provision of public utilities does not necessarily guarantee efficiency. For example, a strike is more hazardous in the case of monopoly than in a firm that does not have official monopoly. Abolition of strikes is necessary to prevent inefficiency that in turn denies workers the freedom to refute the services they are offering. In the case where there is judicial inefficiency, proper legislation is sufficient to correct such inefficiencies rather than economic regulation. To conclude it is therefore clear that it is impossible to achieve perfect efficiency in economic activities especially where politics is involved. 2.0 Corporate social responsibility Introduction Corporate social responsibility refers to voluntary efforts by an organization to account for its own activities on the effects on the environment and impact on the welfare of the society. This may often go beyond what they are required by the regulations regarding on the environment and social groups. Corporate social responsibility may also refer to small expenditures that do not immediately have positive impacts on the organization but will enhance societal and environmental changes. Reasons for adopting corporate social responsibility Businesses adopt CSR in order to promote innovation in their activities through marketing, communications and sustainability. For example, Unilever, through CRS was able to produce innovative products such as hair conditioner, which uses a lesser amount of water. Sustainability enhanced through adoption of CSR has improved researching and improvement efforts, which in turn produced positive results for the company. Business also uses CSR as a strong tool for saving on costs. For example, if a firms CSR policy is on conservation of energy for future generations it will engage in research on the use of energy in a more efficient manner where finally lead to savings on energy costs. The adoption of CSR is also a means of focusing on the future prospects of the business. For example, unilever believes that CSR is a perfect tool for safeguarding and ensuring that the company’s future is sustainable. Customer engagement is easier through CSR adoption by business entities. Consumer can make choices on the products and made aware about the environment. CSR can help engage with customers in a new manner and educate them on what is beneficial to them. In addition, CSR can enhance employee engagement through community services championed through the organizations policies. This in turn will improve the loyalty of both employees and customers and will affect positively on the growth of the business. In most cases consumers are most likely to pay higher prices on commodities that are socially responsible than those which are not. Businesses therefore adopt CSR in order to facilitate the production of socially responsible products in order to please their customers, which also improve customer loyalty. Read More