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Singapore Pestle Analysis

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Autor:   •  June 19, 2011  •  Research Paper  •  2,532 Words (11 Pages)  •  4,901 Views

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PESTLE Analysis


The political power is extremely centralized in the government and it is a bureaucratic country. Although the elections are being held often, the offices are mostly assigned instead of elected. The government put efforts in communicating the decisions and policies to the public instead of gathering their opinion. The reason of that is after the "Depoliticize" the power structure in 1965, the government is convinced by a concept that a city state without natural resources, if keeping the political centralized and narrow, the economic and political stability are maintained. The People's Action Party dominated the Singaporean politics since the independence from leaving the Federal of Malaysia in 1965. Singapore is classed as a "Hybrid" country by the Economist intelligent unit because Singaporean politics is a mixture of bureaucracy and democracy. Also Freedom House rank Singapore as "partly free". Western democracies considered the Singaporean government is closer to bureaucratic instead of democratic or illiberal and procedural democratic. Some people considered Singaporean government to be social democratic that listens to the opinions and feedback on policies and lawmaking process instead of purely according to the will of government. However some of the policies consist of socialism, for example; the free education and government owned public housing. These policies help the dominance government controlled the local economics and majority of real-estate. However, Singapore is famous for its anti- corruption policies which also are an attraction to foreign investment. Singapore is ranked the least corruption country in Asia and the cleanest country in the world by the Transparent International. The World Bank's governance indicators also ranked Singapore highly rule on laws, control of corruption and government effectiveness, however the political openness and human rights are lacking.

Also there were huge questions and responses about the salaries of Prime Minister in Singapore. The Prime Minister received a rise in salaries of 60% which equals to $400,000 US Dollars higher than the United States' President. The response from government defined this is the tool of preventing the corruption and governing efficiency to ensure Singaporean image as a world-class government.

The Singaporean government is being actively involved in economy activities. Also the government has monopolized or semi-monopolized certain industries like: real estate which makes the power of government affect the profitability.

Although the economy is growing rapidly and increase of opportunities of: trade, citizen education level is increased and the society is more complex and the policies so governing of PAP (People Action Party) is being questioned. The prediction of Singapore Politic will be the openness of politics should increase to the public. Because of the illiberal democratic affects the country image and the goodwill of the people and because of the mature economic and slow down of growth which is an impact on the trust worth of the government.


Singaporean Economy is one of the best performers. GDP (Gross Domestic Product) has been constantly increasing since Singapore became independent. GDP in market Price of Singapore in 2007 was $161,348.8 million (US Dollars) and a growth of 7.5% after a growth of 7.9% in 2006. Also Singapore is ranked the 8th most expensive country by the Global Property Guide. As a city-country, Singapore is focusing on its economic development. Singapore has a well developed and successful free-market economy. The economy highly depends on exports, especially electronics and information technology products. However the global recession in 2001-2003 had huge impacts on the technology sector, another incident of SARS in 2003 has affected the economy of Singapore. However the internal flexibility led to the real GDP growth of 7% in average annually during 2004-2007. The government is trying to boost the share of market in global demand of information technology products. Government is attracting investments in high technological industries, such as: pharmaceuticals and medical technology production.

However, Singapore's inflation in 2007 was 3.6% and a forecast of 5% in 2008 which is the highest in 16 years and it has a huge impact on costs of food, energy and transportation and the CPI (Consumer Price Index) has been increased accordingly. One of the reasons was the increase of sales taxes from 2% to 7% in July 2007.

The forecast of Singapore growth in GDP 2008 was cut down to 4%-6% because of the risks in recession due to the slowdown in United States, mainly because of the real estate crisis and the stock market. Also the evidences show the slow down of outputs from the foreign drug factories and electronic exporters but the economists believed that even if the recession is happening, Singapore will walk out very quickly, because they estimate the domestic demand can pull it through.

According to Appendix 1, exports in 2007 were $450,587.4 million in current price and it increased 4.4% from 2006 which indicated that the growth is declined sharply from previous years. The growth in 2004 was 20.5%, year 2005 was 14% and year 2006 was 12.8% from previous years. The numbers are insisting of domestic exports, non-oil exports, oil exports and re-exports. Reasons of that may due to the slow down of growth in United States and Europe which affects the technology and manufacturing industries in Asia. As the important transportation port, slowing production and declining demand of shipping indicates the general decline of Asian exports.

The import of Singapore was slightly increased 4.5% and it is by the petroleum products and civil engineering equipment parts. The slowdown is being experienced due to decrease in demand of electronics and technological products, so that imports are slowing down.

The most competitive advantages of Singapore are: free port and free market. High as 99% of imports are duty free in Singapore. However the market in Singapore is very competitive, the exporters have to aware that the after-sell service, because of the Singaporean buying habits are sensitive and the market is competitive.

As the high technology country, Singapore is the first country to use the Electronic Data Interchange(EDI) which use for effectively exchange trading information and this system makes Singapore as an active trading partner, also explained the effective transaction and information exchange can be done on internet. This is an advance technology that implemented by the Singapore government to increase the value of Singapore as a trading center in Asia. (Statistics


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