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Singapore and Hong Kong are the two emerging economies from the Asian continent. They are highly developed and are the region's first newly industrialized nations. The countries have maintained exceptionally high rate of growth and fast industrialization that that took place between 1960's to 1990's. The two countries have changed their economic status to advanced high income economy while still rated as the fastest growing industrialized economies.
For this economic transformation to be realized, there are some of the factors and policies that have driven it. Firstly, both countries have a highly educated and well skilled labor or the workforce. The two countries also capitalized on what each think can do better (Yusuf, 2003). This is employment of the rule of comparative competitiveness. Both countries become the leading financial centres that have become internationally recognized. However there are specific factors that have affected the economies of the two countries. To begin with Singapore has specific policies that have affected its economy.
Singapore is rated the least corrupt nation in the Asian continent. This low corruption is evident in the way the politicians and civil servants are not corrupt. This reputation that Singapore has has always been identified with. Hong Kong however comes second in the list of least corrupt economies in Asia. Singapore also operate a free market economy, Free market means having the freedom that allows you to produce, allowed to trade on the goods from outside and being able to consume of any service and goods. These goods and services are always acquired without of force, fraud or theft. The market is characterized by internal and external openness of the market (Yusuf, 2003).
Secure system of private property rights is very essential for a free market economy. The two main rights in the free market economy is the right to control and enjoy the benefits of the property. The other right is the right to transfer property to anybody. Empirically countries with strong property right system have high growth rates. With free market economy, foreign direct investments are encouraged the other factor that Singapore uses is the having of highly skilled and well educated workforce. Through the provision of having an open door immigration coupled with liberalism have caused an influx of foreigners who come and take up the jobs (Stephen, 2008). This the number of the work force then increases causing people to lack employment. Singapore has however not concentrated on the low-skilled jobs that pay low wages. Foreign are however are forced to take up this kind of jobs
Hong on the other hand has its own policies though most of them are similar to those in Singapore. Hong Kong has is its currency stable. A strong currency for Hong Kong means that doing business is good. A stable currency attracts foreigners who come to do business in Hong Kong while other seeks employment opportunities. The country's bureaucracy will was considered to be highly efficient during the colonial era has changed. Today this bureaucracy has lost its meaning and that the country is operating in a liberal context whereby the businesses and government activities are carried out with less bureaucracy (Stephen, 2008).
According to Stephen (2008) the three factors of production that should be encouraged in the industrialized countries are capital, labor and technology. Labor refers to the workforce that is necessary while capital goods are the buildings and the machinery. Technology on its side refers to all the methods used by labor and capital in the provision of some of the services. This however depends on the acquisition of the practical skills. These skills are used to get the job done. Everyone believes that these elements are essential for the economies to grow.