Whether Singapore Is A Suitable Place To Operate A Business

Abstract

In this research paper, I will talk about whether Singapore is a suitable place to operate a business. The research information is based on weather, geography, population, language, religions, history, political environment, and economy. In my opinion, Singapore is suitable for business activities because of its advantages of religious diversity, history, and economic growth.

Introduction

Singapore is a country in Southeast Asia. More accurately, it is located on the southern tip of Peninsular, which is next to Malaysia (An Introduction to Singapore). This can clear the misconception that Singapore is a part of China. Singapore is a British colony in 1918 (kästle). People sometimes called Singapore as a "city-state" due to the fact that its size is small. Singapore is approximately 276 square miles (Digest 2014). That being said, it is roughly half the size of Los Angeles, and probably two-third the size of New York City (Digest 2014). Singapore is often called "Singapura" in a Malay word. This word can be separated into two parts: "Singa" and "Pura", meaning Lion and City. Therefore, Singapore is also known as Lion City (An Introduction to Singapore). In the 1960s, Singapore, Hong Kong, Taiwan, and South Korea were considered as "Four Tigers" since the level of output per person started growing in these Asian countries (Blanchard 2017 208).

Weather

The weather in Singapore is different from most of the countries because there are no different seasons (An Introduction to Singapore). The hottest period in Singapore begins from April to June (An Introduction to Singapore). Most of the rainfall is experienced during the period from November to January during the northeast monsoon (An Introduction to Singapore). In this period, the rainfall occurs with longer duration continuously. Although there are almost no different seasons in Singapore, people are still facing dramatic climate daily. In Singapore, the weather is usually sunny, sudden rainfall take place daily and heavily. Fortunately, it does not live long (Travelonline).

The temperature in Singapore is around 90°F during the day and 77°F at night on average (Travelonline). This implies that the weather is usually warm in Singapore. This is due to the fact that the seasons are less obvious, thus the variation in temperature is small at the same time (Travelonline). The weirdest phenomenon occurred in Singapore is that thunderstorms can happen at all times during the day over the year (Travelonline). During the period from May to October, fires can easily take place, leading to strong fog (Travelonline). Fortunately, the concentrated mist scatters and disappears immediately.

Geography

As mentioned above, Singapore, is located at the southern part of the Malaysian peninsula, about 85 miles north of the Equator (Kennard, Ho, Leinbach, & Winstedt 2018). It is formed by a main island, which is the island of Singapore, and approximately 60 small islets (Kennard, Ho, Leinbach, & Winstedt 2018). In fact, about two-thirds of the island of Singapore is just 15 meters above the sea surface (Kennard, Ho, Leinbach, & Winstedt 2018).

Based on the geographic structure of Singapore, we can conclude that the lower scarps in the western and southern part are formed by sedimentary rocks, hills in the central are shaped by granite rocks, and the highlands in the eastern part are constructed by sands and small rocks (Kennard, Ho, Leinbach, & Winstedt 2018). Singapore consists of low mountains mostly. The highest hill in Singapore is Timah Hill, following by Panjang Hill and Mandai Hill (Kennard, Ho, Leinbach, & Winstedt 2018). The western and southern part of Singapore are made up of scarp land. To the east is a highland. Due to the erosion, it is separated into lots of mountains and valleys in complex ways (Kennard, Ho, Leinbach, & Winstedt 2018).

Unfortunately, Singapore is not a suitable place for farming due to the flooding. For instance, the soils in the eastern part of Singapore is highly poor and thin (Kennard, Ho, Leinbach, & Winstedt 2018). Even though there are lots of short streams and rivers connecting islets in Singapore, flooding occurs quite often. This can be a serious problem for farming due to the fact that the low streams consist of low gradients, and as mentioned above, rainfall occurs at any time heavily during the day (Kennard, Ho, Leinbach, & Winstedt 2018). Low streams, by its characteristics, can no longer reserve those excess water. As a result, excess water spills over its channels, and overflow onto the land (Kennard, Ho, Leinbach, & Winstedt 2018). Flooding can cause soil erosion, and thus, soils cannot develop formally. Moreover, harvests in the farmland can be wasted away by floods easily.

Population

Based on the estimation, the total population in Singapore in 2017 is approximately 5.9 million (Kennard, Ho, Leinbach, & Winstedt 2018). With just an area of 276 square miles in total, Singapore is considered as one of the most densely populated state-city in the world. The ethnic composition is mainly comprised of 3 groups: Chinese, Malay, and Indian. Based on the statistics of ethnic composition in 2016, approximately three-fourths of the population are dominated by Chinese, followed by Malay with a percentage of thirteen in total, and Indian with a percentage of nine in total (Kennard, Ho, Leinbach, & Winstedt 2018).

Languages

Due to the diversification of population, there are mainly four official languages in Singapore, including English, Mandarin, Malay, and Tamil (Kennard, Ho, Leinbach, & Winstedt 2018). Since pronunciations are highly diversified among these ethnicity, English is reserved as the main language for the medium of communication. This can eliminate the language barriers, so as to facilitate economic activities. Moreover, Mandarin and Malay is crucial to strengthen the relationships between Singapore, China, and Malaysia. For instance, almost one-third of the schools in Singapore teach Mandarin (Kennard, Ho, Leinbach, & Winstedt 2018). This can by no means help removing language barriers.

Religions

Since there are more than three ethnicities in Singapore, different religious affiliations also exist. For examples, since 2000, Buddhist predominated among Singaporeans, and approximately 51% of Chinese in Singapore were Buddhists, and essentially all Malays and Indians belonged to Islam (Kennard, Ho, Leinbach, & Winstedt 2018). According to one of the Pew Research Centre Survey in April 2014, Singapore is considered as the most "religiously diverse country" among the world (The Independent 2016). This study is based on Religious Diversity index (RDI). The calculation of Religious Diversity Index is comprised of the percentage of eight main religions around the world within a country (The Independent 2016). These countries include Buddhists, Christians, Folk, Hindus, Jews, Muslims, other religions than classified as a colony, and the religiously unaffiliated (The Independent 2016). The highest score among all 232 countries is marked by Singapore, with a score of 9 (The Independent 2016). As quoted from the report, "34% of Singaporean are Buddhist, followed by Christian (18%), religiously unaffiliated (16%), Muslim (14%), other religions than classified as a colony (10%) (The Independent 2016). On the other hand, 5% of the total population belong to Hindu, roughly 2% are folk, and less than 1% are Jewish (The Independent 2016)."

History

In my opinion, history is crucial to the economics development of Singapore. During the British Colonial Period, western countries brought its technologies and business opportunities over Singapore in order to make Singapore as one of the greatest trading port among the world. The island of Singapore was first discovered approximately by the third century A.D. Since the seventh century, Singapore served as a port for transiting goods for businessmen among the Southeast Asia (kästle). However, since the seventeenth century, Singapore was controlled by Malayan sultanates in the earlier history (kästle). In 1819, a British governor named Thomas Stamford Raffles, arrived to set up a port for trading (kästle). He established a port for free-trading and free migration, which facilitated the growth of Singapore in size and population (kästle). I believe that this is the cornerstone of Singapore's economy on international status. During that period, different ethnicities, including Chinese, Malaysian, Indian came to Singapore.

During the British Colonial Period, British had taken control of Singapore, Penang and Malacca, and their trading ports (kästle). In 1867, Singapore became the most important country among the Straits Settlements due to the fact that they had approximately 86000 residents around their trading port. This provided a reason that Singapore controlled the Straits Settlements Legislative Council in that period (kästle). In the twentieth century, the trading port in Singapore was the main debarkation for most of the laborers, in which they came from China and India (kästle).

With the establishment of trading ports, Singapore grew rapidly, as expected on Infrastructure, transportation, and financial institutions. However, this provided an incentive for the Japanese invasion. Since Feb 1942, Japanese arrived Singapore and Malaysia, and had overmastered them (Chen). After that, Japanese destroyed British establishment on the trading port. Singapore's trading activities were largely affected by it, since the crime rate and death rate increased significantly, most of the building and infrastructure were destroyed at the same time (kästle). Furthermore, Singapore's economic growth were suffered from the invasion. The recession lasted until 1960. Since the demand for tin and rubber increased significantly over the world, the economics for Singapore boomed again (kästle).

The invasion of Japanese not only impacted largely on Singapore's economic growth, but also on the demand for independence. The decision of independence had brought the economy of Singapore to the next level. Singapore did not grant enough protection by British from the invasion of Japanese, since Singapore was just a state in the previous. In 1963, Singapore became a part of the Federation of Malaysia (kästle). As a state, Singapore could not achieve rapid economic growth as expected (kästle). At the same time, Malaysia worried that the dominance of Singapore and the conflicts between Chinese and Muslim would threaten the political power of Malaysia. As a result, the government decided to separate Singapore from Malaysia (kästle). However, separation posted a critical problem on Singapore. As mentioned above, Singapore is a small place formed by a main island, which is the island of Singapore, and approximately 60 small islets (Kennard, Ho, Leinbach, & Winstedt 2018). They did not have sufficient resources. In 1965, Singapore could still overcome its short under the leading of Lee Kuan Yew and the PAP (kästle). Singapore was able to increase its trading activities with the United States and Japan since 1966. Moreover, Singapore participated the Association of Southeast Asian nations (ASEAN) with other Southeast Asian countries (kästle). This movement helped Singapore to achieve security and rapid economic growth.

Economy

In the 1960s, Singapore, Hong Kong, Taiwan, and South Korea were considered as "Four Tigers" since the level of output per person started growing in these Asian countries (Blanchard 2017 208). The advantages in location, government policies on business and trading, and tax advantages actually lead Singapore to an economic prosperity.

First thing first, Singapore makes use of its strength on location in order to achieve economic success. As mentioned above, Singapore is not a suitable place for farming due to the flooding and its extreme climate. In fact, this promotes Singapore to engage heavily in tertiary production, such as trading services. Moreover, Singapore has only few natural resources since it is one of the smallest country. This implies that Singapore cannot engage in primary production. However, due to the colonial impacts, Singapore can specialize in secondary production, especially on producing manufacturing products such as electronic manufacturing, and oil refining (Arnold 2007). With the well-developed trading port, Singapore is considered as the most active region among the big countries in the world. In fact, approximately forty percent of the world maritime trade passes Singapore (Arnold 2007).

Secondly, Singapore also provide tax benefits for the purpose of attracting foreign investment. Compared with the high corporate tax in the United States, some Asian countries such as China, and Singapore, provide profit tax cut so as to attract foreign investment in domestic. In 2004, Singapore set the goods and service tax rate and the corporate tax rate to be 5% and lower than 15% respectively (Singapore 2004). These policies provide huge incentives for foreign corporations such as KPMG to set their headquarters in Singapore, as companies were assumed to achieve cost minimization. As a result, this can increase competitiveness of Singapore among those developed countries. For instances, in 2009, Singapore reduced its corporate tax rate again to offset the impact of recession, and the rate was approximately half of the corporate tax in Hong Kong (Stevenson 2009).

Conclusion

In conclusion, Singapore is suitable for business activities because of its advantages of religious diversity, history, and economic growth. Ethnicity diversification helps Singaporean to explore to master different languages, so as to facilitate economic development. Moreover, history is crucial to the economics development of Singapore because it shaped the appearance of Singaporean international status. During the British Colonial Period, the establishment of trading port can by no means set up a cornerstone for the rapid growth. Furthermore, the decision of independence had brought the economy of Singapore to the next level.