International Finance

International Finance Assignment

Name: Jin Ji
Class: DipFIN15
Student Number: DipFin1501
Lecturer: Mr. Chong Chin Siong

Question 1
The Growth Triangle, in part a marketing scheme, is based on the idea of comparative advantage. The region as an integrated unit is thought to be attractive to investors because Singapore can provide highly developed telecommunications links and management expertise. Batam and Johor can offer abundant land and cheap labour. Together, they can produce the kind of business environment no longer available in Asia's newly industrialized countries. (Far Eastern Economic Review, 3 June 1991:34).
In my opinion, the factor of production which is not enjoyed by Singapore is Land.
Since 1960, land available in Singapore for agricultural, commercial, industrial, and residential purposes has risen by some 5 percent, an amount that reflects both reclamation and release of state-owned land for development.
The industrial land costs in Singapore have been kept increasing for the past twenty years, and these costs are unlikely to come down because Singapore has developed about as much land as is likely to be socially acceptable at present. But in Batam, only 30 minutes away from Singapore's CBD, land costs are about 30 per cent of those in Singapore's suburbs.
As to Johor and Riau, I think both of them are lack of skilled labor or “semi-skilled” labor.
Compare with Penang, the high-tech infrastructure in Penang is better than that in Johor. Technological capabilities developed in Penang's firms are significantly higher and more varied than in Johor. Penang also enjoyed a statistically significant and higher mean for the supply of skilled labor than Johor.
There is a report indicated that the state furniture industry is losing RM65mil a month because there is not enough skilled-labors to meet international demand. Johor Furniture Association vice-president Lim Poh Teot said the industry could not meet increased international demand due...