- Sustaining Competitveness in the New Global Economy
The book delves into a topic pertinent to modern developing economies — that of sustaining competitiveness in an age of globalization. [End Page 396]
Chapter 2 provides an analytical overview of globalization on several fronts. These include the new models of production networks brought about by technological advancement over the past decades, changing government strategies in response to new external stimulus and global interdependence as well as the influence of multilateral organizations such as the World Trade Organization (WTO) on international trade. In so doing, Anderson succinctly draws out both the pitfalls and benefits that globalization would create, particularly in relation to small economies. This provides a useful setting upon which the rest of the book follows.
Chapter 3 by Lall focuses proper on the difficulties of measuring the nebulous concept of competitiveness. Lall took care to point out at the outset that in the measurement of national competitiveness, in view of market failures often seen in developing countries, it was important to focus on variables that could affect the dynamic comparative advantage so as to remedy the market failures that stood in the way of competitiveness of these economies. The well-known indices commonly used to assess competitiveness by the World Economic Forum (WEF) and the International Institute for Management Development (IMD) came under close scrutiny by Lall, who critiqued that these indices were often fraught with methodological weaknesses and unrealistic assumptions. In response to these weaknesses, Lall puts forward the Competitive Industrial Performance (CIP) index with the key objective of helping in the benchmarking of a country's industrial structural features, through the capture of both industrial performances and their related drivers. The chapter maps Singapore's performance based upon the CIP index as well as provides an interesting case study on the implications of China's rise on the East Asian economies.
Chapter 4 delves into a topic highly relevant to Singapore; that of cross-border production sharing and components trade. In highlighting these developments, the author throws doubt on the conventional measurements of the trade balance and the current account as well as hints at the implications for trading agreement negotiations. This chapter makes a case for Singapore to move up the value-added chain of component production in order to stay competitive, an argument in line with current economic policies. It would be more interesting at this point if a comparative analysis of how countries in the region are working towards consolidating their niche in the value chain is provided. This chapter sets the ground for such research to follow.
In the analysis of competitiveness, it is necessary not to neglect the role of services, particularly in the case of Singapore. Chapter 5 deals with this pertinent issue and makes the point that while Singapore is often seen as a net exporter of services based on conventional balance of payment measurements, it is a net importer when foreign direct investment (FDI) in services are taken into account. This observation relates to the difficulties in measuring services trade and the need for better measurement tools. Revealed comparative advantage (RCA) as well as the ranking of impediments to trade in services provides value-added insights as to the competitiveness of the Singapore service sector. Granted the difficulties in measurement of services, however, these indices should only serve as a rough guide until a more comprehensive database is developed.
In assessing national competitiveness, it is imperative to analyse the role of the government. Chapters 6 to 8 prove instructive in the understanding of the specific political economy of the Singapore economy. Chapter 6 provides a review of the development of "Singapore Inc." as well as an examination of the government's initiatives made towards enhancing private corporate ownership. The author manages to fairly reflect the difficulties as well as the necessity of adjustment in the government's strategies in response to the new demands arising from globalization and as it moves towards a value-added knowledge based economy. Likewise, the prominent role of the government also...