Comparison of the Economic Environment between Singapore and Argentina - Essay Example

Qualitative Analysis Comparison of the Economic Environment between Singapore and Argentina Singapore is one of the nations in the world with a well established and efficient free-market economy. The government of Singapore has a significant control in most corporations, which constitutes about 60% of the GDP through business entities like Sovereign Wealth Fund (Temasek, Huff 751). The country has a free business environment with comparatively low levels of corruption, transparency in management of public affairs and constant/predictable prices changes. Compared to other developed countries Singapore has low tax rates with a very high per capita GDP globally. Singapore has a very innovative and stable economy which is merged with efficient economic planning under the Economic Development Board that helped to establish a free market. Singapore’s main exports include; chemicals, services and electronics which provide the main sources of revenue for the country. Most firms are registered as private Limited companies. The country experiences a very low supply of water with a limited arable land for agriculture. Moreover, Singapore has a port that is strategic enough to give it an edge over the neighboring countries that carries Entrepot trade. Most of its labor comes within the population which is owed to the efficient education policy in the country that produces skilled labor for the industries in the country. The Argentinean economy is dominated by agriculture, which contributes the largest percentage of the GDP. The country has fair economic policies that aim at increasing the exports from the main productive sectors. The main natural resources that contribute immensely to the country’s economy are minerals such as zinc, lead, copper, tin, oil and natural gas, uranium, iron, manganese and lithium. The main agricultural products produced in the country include; grains and livestock products. The country does not have a free economy like that of Singapore hence its economy is not that well established. The industries operating in Argentina include: oil refinery, food processing, machinery and equipment, petrochemicals and textile industry. Most of the country’s exports are taken to Europe and Brazil which are the country’s main trading partners. The main sector which is Agriculture has recently shown a rapid recovery with an increasing industrial production which replicates that of its immediate neighbor Brazil. The tax revenues are slowly growing with the debt services reducing. There is a probability of volatility in the financial markets due to the conflict that exist between the central bank and the federal government. Comparison of the Political Environment between Singapore and Argentina Singapore has one of the most efficient political and regulatory policies globally. According to the surveys conducted the country ranks 122 out of the 138 countries in terms of creating a conducive political environment for business. This is in connection with press freedom in regard to the World information technology report of 2011 (Huff 745). The uniqueness of Singapore’s political environment comes in the fact that the immigration rules and laws are not that strict compared to Argentina or any other country. There are very strong law enforcement agencies which make cases of political unrests rare and efficient for business operation. The country is controlled by very few political parties with the main political party being People’s Action Party. This stability in terms of political party policies ensures effective business environment for the development of country. The government of Singapore also ensures free trade agreements and employment laws in industries where a majority of the foreigners are in the job market. The main countries that have set up businesses in the country include China, Europe and the United States. As such, most foreigners use this country as an avenue to establish and expand their businesses through a process of networking and making use of the open trade agreements established by the government. Argentina is one of the few countries that have political systems established on representative democratic norms. The country’s political systems are dominated by the federal system where the governing state is divided into central divisions and the state. The most popular political parties in Argentina are Justicialist and the Radical Civic Union party. The country has strong ties with foreign states such as Brazil, Bolivia, Peru, Paraguay, Venezuela and Ecuador which enhances business relations among the alliances due to an expanded business base. The bilateral and multilateral agreements with the mentioned countries are established on shared interests that comprise of collaboration on transnational matters, non-proliferation of contraband material as well as on matters of international peace and stability. Others include strong commercial ties and multilateral peace relations among the trading partners. Argentina’s foreign policies put much emphasis on improving the regional relationships that comprise of strengthening and expanding the regional trade blocks such as the MERCOSUR and UNASUR (Deloitte 23). Argentina has a very strong role in promoting peaceful international relations by reducing proliferation of arms and use of the nuclear power since it is a member of the Board of Governors of the Intercontinental Atomic Energy Agency (Deloitte 41) Comparison of the Cultural Environments between Singapore and Argentina Argentina has in the recent past implemented the issue of women gaining access to various positions in the workplace as well as in economics and politics. Even though the country has a predominance of men in high positions, there is an increasing trend of women getting to positions of leadership both in the workplace and in government. The country’s religion is predominantly catholic with a few Jews and Muslim, especially in the capital Buenos Aires. However, religion has little impact at the workplace and in business contracts. Moreover, class differences have less influence on business operations even though there are limited cases of physical discrimination based on ethnicity and physical appearance. Spanish is the main language spoken in Argentina with few people speaking English, native languages and some other immigrant languages. This is because the country was colonized by Spain in the nineteenth Century (Paul 27). Singapore has a varied population of approximately 5 million people that is made of mostly Chinese, Indians, Eurasians, Malays, Caucasians and other mixed Asian races. The nation is dominated by immigrants with 42% being foreigners who contribute to the country’s 6th ranking globally with aliens. Moreover, the country is very small that the temples of Chinatown can be viewed from specific towns in Singapore. The culture of Singapore is best defined as the concentration of Indian, British and Malay cultures due to its history of immigration. A majority of the people of Singapore speak at least two languages, English plus any other language which might be Malay, Tamil, Mandarin Chinese or Singlish (Singapore Colloquial English). Singapore as a country has implemented various policies to develop gender based issues. This has been through the initiation of laws that will enable women to have equality at the workplace and steps to reduce on the cases of gender violence and developing the status of women in the family set-up. In spite of all these positive strides, gender equality is far from being achieved in relation to economic empowerment of women and political involvement. The women in Singapore are in abject poverty where older women are at high risk of being vulnerably poor. Comparison of the Competitive Environment between Singapore and Argentina Competition in Singapore is governed by the Competition Act of 2004 which was enacted by Parliament in October of 2004. It is to large extent formulated from the U.K’s Competition Act of 1998. The main purpose of the Act is to support the effective operation of markets in Singapore which promotes the state of competitiveness in the country’s economy. The Act contains various sections such part I that creates a commission for competition in Singapore which helps in enforcing the law on competition. Part III of the Act is the most significant section as it outlines three important activities which have been prohibited in competition. It prohibits anti-competitive agreements, conducts and activities, misuse of monopoly positions and mergers that considerably reduce competition. The main intention of these caps is to control private players in the market but not government corporations. The law also helps in giving power to investigate and adjudicate on the Commission for Competition of Singapore which also listens to appeals against decisions by the commission. Eventually, this creates an ample environment for business operation as far as competition is concerned (Tan & Kor 3). Argentina on its part has for the past 25 years made significant steps towards enhancing an efficient economy in the market.   The competition policy for the country has been quite uneven due to the frequent conflicts in the political and economical environment. Argentina first set up a Competition Act in 1980 which was not well put into force. The forces behind this failure include the hyperinflation which was not controlled up to 1992. Argentina has a competition agency known as the National Commission for the Defense of Competition (CNDC). This was established in 1980, paving way for the establishment of tribunal for the Defense of Competition in 1999 which has various provisions. These provisions aim to affect three main kinds of conduct in business; anticompetitive deals which comprise of cartels, abuse of predominance positions and control of mergers that cuts down on competitions. These provisions apply in accordance with the universally accepted standards of business operation and competition. Works Cited Christopher, Tan and Sia Aik Kor, Competition Law, Singapore Academy of law (2007). Deloitte, Doing Business in Argentina, Deloitte, 2011 Web. Accessed on October 1, 2012 from http://www.deloitte.com/view/en_AR/ar/insights/dbia/index.htm Huff. W.G. “What is the Singapore Model of economic Development?” Cambridge Journal of Economy (1995), 19 (6): 735-75 Kenneth Paul. "Meritocracy and Elitism in a Global City: Ideological Shifts in Singapore". International Political Science Review, Vol. 29, No. 1, 7-27 (2008) Read More