The term economic growth can be defined as the increase in productive capacity of the country. Is measured by comparing the GNP in a given year with that of the previous year. Some of the principal causes of economic growth include increased capital, advancement in technology and sustainable development among others.
Currently, the World Bank has taken the responsibility of advising some of the newly industrialised countries such as Singapore and Hongkong on how they can improve their economic growth. The World Bank aims at delivering financial and technical assistance to the countries that are most in needs so that they can promote their economic growth. The World Bank. (2011). however, in order for the industrialised countries to achieve high economic growth, there is a need to implement various strategies which may include: high rate of saving, market economy, and investment in both the human capital and infrastructures among others.
In a nut-shell, the following are some of the ways through which the World Bank can encourage Singapore and Hongkong to promote their economic growth.
- Investment in infrastructure
- Investment in human capital
- Improved technology
- Increased rate of saving.
- Trade alliance
- Taxation
- Property rights.
It is prudent to note that things that are pertinent in the economic growth of Singapore and Hongkong include: trade alliance, taxation and the property rights. It is prudent that the
World Bank’s advices Singapore to join organizations such as association of Southeast Asian nations. This gives them opportunity to be part of some of the largest free trade grouping in the world. This grouping is can be good as well to Hongkong provided that they can access the groupings. The ability of Singapore and Hongkong to join these groupings can be of great benefit to them economically. For instance, trading with these countries will imply that they will not have to pay for tax or tariffs for certain items. The World Bank. (2011).
Tariffs and taxes can be a hindrance to a county’s willingness and ability to trade. Therefore, by lowering or eliminating tariffs on certain items encourages trading between the member countries.
Taxation laws; Hongkong and Singapore also have to keep in touch with taxation laws. In order for them to be able to supply some essential services, develop infrastructures, attract new businesses and to keep the existing one, they need to heavily comply with the tax law. This is because tax collected can be used to improve infrastructural facilities in the country thereby encouraging investments hence boosting their economic growth. It is therefore advisable that Singapore develops heavy taxation laws LowTax.net. (2011).
The available taxation information shows that the tax regime of Singapore is fairly benevolent. For instance, the taxes related to capital gains are very limited. Record shows that estate duty tax was done away with in the year 2008 while gift tax does not exist. In general, the taxation laws are not well developed in Singapore. lowtax.net (2011). On the other hand shows that Hong Kong has also low taxes. Low taxes imply that the companies will be able to maintain their low cost. This will in turn encourages employment of more people.
Property rights; this is another economic consideration for both Singapore and Hong Kong. Hong Kong according to GuideMeHongKong.com (2010) is considered the best place for carrying out business. Therefore, the World Bank should encourage the government to ensure that property rights are seriously taken care of. This should not be very different with Singapore. Imposition and protection of the property rights encourages innovation in the country hence spearheading economic development in the country.
Therefore, in order to promote economic development in both countries, proper taxation laws, enforcement of property rights and engagement in trade alliances should be properly instituted.
References
GuideMeHongKong.com. (2010). Hong Kong, world's 2nd best country for business. Retrieved July 9, 2011 from http://www.guidemehongkong.com/story/doing-business/hong-kong-worlds-second-best-country-for-business.
GuideMeHongKong.com. (2010). Hong Kong, world's 2nd best country for business. Retrieved July 9, 2011 from http://www.guidemehongkong.com/story/doing-business/hong-kong-worlds-second-best-country-for-business.
LowTax.net. (2011). Hong Kong: Taxation. Retrieved July 9, 2011 from http://www.lowtax.net/lowtax/html/hongkong/jhktax.html.
The World Bank. (2011). About Us. Retrieved July 9, 2011 from http://www.worldbank.org.
PressRun.net. (2011). Singapore 2nd freest economy: Heritage Foundation. Retrieved July 9, 2011from http://www.pressrun.net/weblog/2011/01/singapore-nominally-democratic-2nd-freest-economy-heritage-foundation.html.
