Economic Growth
Definition
Economic growth is increase in country’s production of goods and services. #SocialStudiesDefinitions
by being integrated in global econ → countries stand to benefit from econ growth
→ can be measured using country’s GDP (gross domestic product) over period of time
Example
SG GDP increased from 2157 million to 636546 million from 1960 to 2022 #SocialStudiesExamples
country participates in global econ thru intl trade.
- enables their goods and services to reach larger market → means that country’s goods and services can now be sold not just locally but to other countries. → thus countries will increase production of goods and services to meet larger market demand.
Countries may also experience econ growth → as result of receiving FI → which bring in capital + advanced tech.
- Foreign capital → used to build production facilities, while advanced technology helps to raise productivity of businesses and workers
| As land, sea, air transportation networks expand + transport cost decrease → raw materials and goods can be transported across globe at lower costs | rapid growth of ecommerce also helps businesses widen global access to market and consumers |
| developments in digital tech + transport connectivity → allow info, knowledge, tech → to be transmitted more efficiently and at lower costs | Developments in digital tech + business activities of MNCs → also facilitate flow of capital → across world → imp to investment activities |
Example
SG continues to attract FDIs with major sources from China, Japan, US. SG serves as a gateway to fast growing SEA region. 2018 → 59% of total no. of tech based MNCs in ASIa had established regional headquarter in SG SG also invests overseas → with significant investments in China, India, Indonesia. As these countries have larger populations + greater potential econ growth, investing in them will likely bring econ growth to SG
FDI recieved by SG → 2010: 665bil, 2021: 2479bil SG’s FDI abroad: 201: 427bil, 2021: 1251bil
Goods traded by SG: 2010: 907bil, 2022: 1365bil Services traded by SG: 2010: 274bil, 2022: 758bil
with limited natural resources to support production for its own consumption → SG is highly dependent on global economy for many goods + services. At same time → offers world goods and services that is good at producing
Given small domestic market → SG encourages foreign investments and invests in other countries to remain competitive in the global economy. trading of goods and services, and foreign investments have sustained econ growth.
Economic Vulnerability
interconnections and interdependent variable in global econ → can bring economic opp and growth to countries. However they can also make countries economically vulnerable → as what happens in 1 country can affect other countries
Understanding
- 1 country manufactures goods. car manufactures in country A buy parts such as engines, tyres, headlights from suppliers in Countries B C D
- country A experiences econ difficulties → cause many people ot lose jobs. they are less able to afford goods like cards. leads to businesses like car manufacturers closing down
- car manufacturers close down in country A → no longer buy car parts from B C D. decline in business → companies in these countries → dismiss workers to cust cost. many people lose jobs. some comapnies also close down
- ppl in B C D lose jobs → affect income → cannot afford housing, healthcare education. decline in standard of Living
globalisation made world more interconnected and interdependent → expansion of intl trade + investments → provided access to global markets and econ growth.
- some countries → able to tap into size of domestic market + capabilities to ensure self reliance, or take advantage of new growth opp in global econ
- reliance on global trade → does leave counties vulnerable to developments and happenings elsewhere in world