Singapore's financial, economic, and business management: analysis of the Asian Financial Crisis

Abstract

The Singaporean economy was affected by the Asian Financial Crisis, but its effects were masked by Singapore's approaches, and strategies, towards FDI and government investment, and to the external recognition of its robust, transparent financial system. the Asian Financial Crisis and increased competition from China have resulted in a decline in foreign investment in most Southeast Asian economies. Singapore has remained an internationally acceptable financial locality, attracting significant amounts of foreign investment. Singapore's success in (a) withstanding the Asian Financial Crisis and (b) attracting significant foreign investment since the Asian currency crisis may be partly attributed to its relatively well developed and efficient financial system. This paper examines Singapore's financial system and its key responses to the Asian Financial Crisis. The paper also empirically examines the effect of foreign investment, government spending and Asian Financial Crisis on Singaporean manufacturing sector from 1990-2002. It is shown that the Asian Financial Crisis has a significant negative effect on both the aggregate manufacturing output and labour productivity.