The Typical Firms in Hong Kong and Singapore - Assignment Example

There are several methods that are currently being used to encourage economic growth for the typical firm in Hong Kong and Singapore. Four methods will be discussed in this paper namely: the development of well-functioning markets; enhancement access to productive opportunities; strengthening of the international framework of policies and institutions (U.S. Agency for International Development, 2008) and increase in the rate of technological progress. The development of well-functioning markets would include effective fiscal policies which focus on a fair, properly administered and implemented tax system.

It should not be susceptible to corruption and must not be a hindrance to the economic activities of the country. The monetary policy plays a significant role in the economic growth of the country. It can either slow down or speed up the economy through manipulation of interest rates or the exchange rates (Johnson, 2005). Aside from an efficient fiscal and monetary policy, economic growth is promoted by removing the barriers to entry of foreign investors and promoting healthy competition among enterprises (USAID, 2008).

Barriers to entry would include such aspects as corruption and too much red tape from the government. Foreign investors are also attracted to economies which have a strong system of intellectual property rights protection which minimizes investment risks. Systems of commercial law should also be in place for both the public and private institutions. The judicial system must be perceived as being fair and just and settlements of disputes must be expeditious and transparent. Other contributing factors in the development of well-functioning markets are the improvements in the agricultural development programs, support for infrastructure, trade capacity-building, financial sector reforms, enterprise development and privatization and workforce development.

The second method that can be employed to encourage economic growth is to enhance access to productive opportunities. This method would mean that both the poor and non-poor members of society should be given equal opportunity to become productive and contribute to the economy. All sectors of society should be given access to finance especially to sources of credit even without being able to offer adequate collateral. Banks, particularly the government-owned ones should offer financing programs for small and medium-scale enterprises.

Aside from financial support, these small enterprises need access to other non-financial business services such as technical and supply chain expertise (USAID, 2008). This is necessary for the firms to be able to be competitive in the face of globalization. A country’s economic growth is fueled by a productive labor force. To achieve this, the labor markets must be able to create new jobs and at the same time assist in the improvement of the workers’ skills and productivity (U.S. Agency for International Development, 2008).

Fair labor practices, specifically protections and benefit programs for the workers must be observed to motivate them; thereby, increasing their productivity. Other ways of enhancing access to product