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Economic Globalization and

Singapore’s Development

Policies: Competition,

Cooperation and Conflict

Alexius A. Pereira

INTRODUCTION economic globalization. In other words, the
eventual flow of FDI cannot be simply
Economic globalization is often understood understood as the manifestation of corporate
as a process of increasing ‘... integration of strategy but must take competitive state poli-
national economies into the global economy cies into account as well. This chapter will
through trade, direct foreign investment (by use the case of Singapore to illustrate how its
corporations and multinationals), short-term development policies between 1965 and
capital flows, international flows of workers 2005, which focused on attracting FDI, were
and humanity generally, and flows of tech- not only dependent on the process of eco-
nology’(Bhagwati, 2004: 3). With regard to nomic globalization but also contributed to
direct foreign investment, also known as for- the process.
1
eign direct investment (FDI), it is commonly
accepted that competition between corpora-
tions and multinationals drives them to ‘go
abroad’ either to acquire ‘cheaper’ and/or FDI AND ECONOMIC GLOBALIZATION
‘better’ resources, or to penetrate new
markets. Hence, it is when firms actually For purposes of this chapter, FDI is defined
invest abroad that national economies as ‘… the process whereby firms from one
become more integrated. However, this chap- country (the source country) acquire owner-
ter argues that equally important is the ship of assets for the purpose of controlling
system of competition between nation-states the production, distribution and other activities
for FDI that also contributes to the process of of a firm in another country (host country)’