This paper looks at how government intervention shapes the evolution of the Singapore economy and accounts for its successes and failures over the past 50 years. Compared with other dynamic Asian economies, the Singapore government's approach to intervene in the economy is both more extensive and more intrusive, but with a narrow focus on GDP growth and surplus accumulation as the primary objectives. The ruling government's near complete dominance in politics has enabled it to mobilize resources to create the preconditions for strong GDP growth and high savings. But the impact on the broader development of the economy and the long term sustainability of growth is less obvious. High GDP growth and strong savings have been achieved without developing the inherent production and indigenous innovation capacity, securing a larger hinterland and providing a less skewed income distribution and higher quality of life for residents. As the economy enters a new phase where more complex and multi-faceted development is needed, the Singapore government will require more than its vaunted competency in mobilizing resources to deliver the outcome.
At the Emerging Markets Forum in October 2010, initial results were presented from an exercise that attempted to measure the resilience of emerging market and developing countries (EMDCs) to deal with shocks to their economies. This paper updates, improves upon, and draws conclusions from that index. A key conclusion is that the Resilience Index appears to have the power both to identify economies that are heading to trouble and to identify the specific policy areas of weakness that lie behind their increasing vulnerablility. The Resilience Index can add to the tools of the economic surveillance process-at least as a device to help insure that weaknesses are surfaced, and that deeper analysis is conducted to assess those weaknesses and suggest corrective policies. It is clear from this analysis that building resilience-and making it a priority of policymakers-can pay high dividends. In particular, we show that the Resilience Index clearly demonstrates that emerging weaknesses in many economies were evident well before the global crisis and the crisis in Europe.
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