RI Economic Impacts of Globalisation Slides

Economic Impacts of Globalisation

Recap: Defining Globalisation•Economicaspect•An interconnected global economy characterisedby increasedflows of•Trade(cross-border imports and exports of goods and services)•Finance(direct and indirect foreign investment; repatriated corporate profits and wages)•Labour(short and long-term migrant workers/ economic migrants)and an increased number and size of multinational corporations (MNCs)

Economic Impacts of Globalisation5.How did the COVID-19 pandemic contribute to global inflation?6.Why is Singapore especially vulnerable to disrupted global supply chains?7.What are some long-term implications of the pandemic for the global economy? Consider the value of international trade and how national responses to the pandemic affect it

Q5. Pandemic and Inflation•Lockdowns, restrictions, and illness àmanpower shortages àcongestion and delays at ports àlonger shipping times and increased costs àdisrupted supply chains•Govt. financial assistance + WFH àboom in demand for consumer goods•Increasing demand + constrained supply = increased shipping prices àincreased retail prices àinflation

Q6. Why SG is Vulnerable •Singapore’s economic benefits •Rapid economic growthfrom the 1980s driven by•Foreign direct investment –MNCs relocating production to SG create jobs and increase demand for other goods/services•Export-oriented economy (fuelledby Free Trade Agreements) allow businesses to overcome SG’s small domestic market•Easy access to migrant labourfor various skilled and low-/unskilled manpower needs•Growing economy allows govt. to earn more tax revenues(SS textbook p. 273-289)

Q6. Why SG is Vulnerable •Economic vulnerabilities•SG’s open economy is more vulnerable to economiccrisesas slowdowns/recessions in other economies lower export demand and affect financial markets e.g.1997 Asian Financial Crisis, 2008 US Sub-Prime Mortgage Crisis•Local businesses (especially SMEs) facecompetitionfrom MNCs and foreign imports; local workers also face competition with migrant workers for jobs in certain sectors/industries(SS textbook p. 273-289)

Q7. Long-Term Implications•Consider impacts of •Businesses switching to strategies to improve resilience of their supply chains (through diversification, regionalisation, nearshoring, reshoring, redundancy etc.) àincreased costs of production & costs to consumers?•Increased demand for labourin storage, distribution and transport (warehouses, truck drivers) àmore employment opportunitiesor increasedautomation?•Changed workplaces àpreference for remote work effecting business practices, demand for office space, etc?