Saturday, April 23, 2011
There are strong arguments that companies will relocate to other countries if Singapore can't offer them lower labour cost. But this argument is flawed. Low labour cost is definitely not the main reason why foreigners invest in Singapore. There are many other reasons i.e. political stability, productivity and knowledge level of workforce, financial system, taxation, ease of access to regional markets etc. Being a developed or a rapidly developing country(whatever you call it), Singapore is never going to be able to compete in low labour cost. Otherwise, foreign investment can just invest directly into China, India, Indonesia, Vietnam etc etc. We are long past that stage that we need low labour cost to attract investment in Singapore.
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