Untitled document.edited (15)

docx

School

University of Nairobi *

*We aren’t endorsed by this school

Course

2018

Subject

Economics

Date

Nov 24, 2024

Type

docx

Pages

Uploaded by ChancellorBoulder9878

Political, Economic, and Legal Environment Gaining insight regarding the political, economic, and legal climate of Singapore is essential for SMFK to successfully export its products to the country. However, considering that SMFK mostly deals with fashion products, examining the Singaporean political, economic, and legal environment, which may influence the exportation of fashion products to this country is very important. An important political aspect to note about Singapore is that the country's government seems to be notice of every activity that is associated with companies that operate in its markets. This means that the Singaporean government can interfere with the activities of companies operating in the private sector either directly by imposing various restrictions or indirectly through taxes (Political and Economic Risks Consultancy, 2022). Based on the 2022 Political and Economic Risks Consultancy (PERC) has, SMFK will is not at risk of being subjected to high taxes due to Singapore's friend political environment to international businesses. From an economic viewpoint, Singapore has implemented policies that aims to stabilize its economy. SMFK will benefit from Singapore's positive real interest rates, low inflation, and fiscal management that is sound, as well as limited distortions in relative prices in the country's economy (Siddique, 2010). The country's liberal foreign trade policies, as well as its exchange rate policy, have avoided real exchange rate misalignment for prolonged periods. The permissive environment for foreign investment additionally performs a role regarding the country's economic development, as it lays the groundwork for significant development- and export-led growth (Siddique, 2010). A suitable amount of spending on infrastructure and an ongoing dedication to developing human capital via investment in vocational and educational institutions has proved crucial in regards to improving the lifestyle of Singaporeans, therefore, increasing their income. This will benefit SMFK significant because it will allow the company to target different customer groups in the country. Being an international company, SMFK will benefit from the fact that Singapore has passed laws which requires both international and local businesses to be treated equally (Global Data Country Risk Index, 2020). The fact that the country has not put any currency restrictions on repatriation or remittance of capital or profits means that SMFK can easily reap the full benefits of operating in Singapore (Wang, 2018). From the perspectives of corporate law SMFK will have the opportunity to expand its operations in Singapore unless it is restricted by its own constitution. This will allow SMFK to expand in every region of the country, while the country's friendly tax laws will make it easy for SMFK to send most of its profits to its parent company in China. Economic Development Level of Singapore SMFK will find Singapore to be a significantly attractive market. For instance, the country high gross national income (GNI) per year of approximately US$54,530 (The World Bank, 2023) is beneficial to SMFK given that it shows that consumers in Singapore will be able to afford SMFK products. SMFK will capitalize on the favourable regulatory environment for businesses in Singapore given that its operations will not be affected by issues such as stringent tax laws, high cost of operations. In addition to, development in transportation and machinery will benefit SMFK in terms of products distribution, as well as the ability to ensure that products are brought closer to the customers. That that China is among the trading partners with Singapore's is also an

added advantage to SMFK as this economic development aspect will help SMFK to effectively export its products from China to Singapore (The World Bank, 2023). SMFK is also likely to capitalize on Singapore's high GDP growth rate of approximately 9.2% for the first time in 25 years (The World Bank, 2023) which indicates that people in Singapore have more money to spend on new products. Singapore's GDP increased by 3.2% overall in 2018 (Fang, 2023). The primary drivers of growth continue to be added value manufacturing, particularly in the electronic goods and high-precision manufacturing industries, as well as the goods and services industry, particularly the information and communication services industry, which developed by 6.0% per year, and the banking and financial sector, which grew by 5.9% per year (Fang, 2023). Even though, the economic growth of Singapore slowed down in 2019 due to the Covid-19 pandemic (The World Bank, 2023), SMFK will still benefit significant with its operations in this country given that, compared to other Asian countries, Singapore's economic growth did not decrease with significant margins. The distribution of wealth in Singapore is also another important factor that SMFK should consider. This is especially because, the distribution of wealth determines whether it will be easier for SMFK to find consumers for its products. The company, however, is in luck given that, while there are more than 298,650 millionaires in the country, more than 790,000 adults possess a wealth that is lower than $13,500 (Fang, 2023). A significantly lower percentage of the population (2.27%) have a monthly income that is less than Singaporean $1,000 (Fang, 2023). This is a clear indication that there are a significant number of people in Singapore with higher incomes, hence are capable of spending more money on luxury products such as shoes. This also means that the company will find it easier to attract consumers without lowering the price of their products.

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Related Documents

DTE Energy-weaknesses.docx

Final (Repaired).docx

14.docx

image (1).jpeg

Worksheet 6 - Module 3 - Lecture-by-Lecture to-do-list.pdf

Discussion 5.docx

Understanding Supply and Demand: Key Concepts & Models

JB HI-FI VERSION 1.docx

Copy of Balance of Payments Dropbox Assignment (1).pdf

To forecast sales for each quarter of year 4 using the moving average approach with a trend and seas

Macdonald's Final Version.docx

Assignment 5 Activity Based Costing answer2.docx

Recommended textbooks for you

ECON MACRO

Economics

ISBN:9781337000529

Author:William A. McEachern

Publisher:Cengage Learning

Microeconomics: Private and Public Choice (MindTa...

Economics

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:Cengage Learning

Macroeconomics: Private and Public Choice (MindTa...

Economics

ISBN:9781305506756

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:Cengage Learning

Economics: Private and Public Choice (MindTap Cou...

Economics

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:Cengage Learning

Economics:

Economics

ISBN:9781285859460

Author:BOYES, William

Publisher:Cengage Learning

Microeconomic Theory

Economics

ISBN:9781337517942

Author:NICHOLSON

Publisher:Cengage

SEE MORE TEXTBOOKS

Recommended textbooks for you

ECON MACRO
Economics
ISBN:9781337000529
Author:William A. McEachern
Publisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics:
Economics
ISBN:9781285859460
Author:BOYES, William
Publisher:Cengage Learning
Microeconomic Theory
Economics
ISBN:9781337517942
Author:NICHOLSON
Publisher:Cengage