PROJECT REPORT ON

MONETARY POLICY AND AGRICULTURE DEVELOPMENT IN SINGAPORE

IN PARTIAL FULFILLMENT OF THE DEGREE AWARDED AT

M.COM PART I (GROUP)

SEMESTER I

Economics of global trade

SUBMITTED TO

UNIVERSITY OF MUMBAI FOR ACADMIC YEAR 2012-2013

SUBMITTED BY, NAME: PRAKASH RANJAN ROLL NO: 30

VIVA COLLEGE OF ARTS COMMERCE AND SCIENCE VIRAR (WEST) 401303.

DECLARATION

I hereby declare that the project titled MONETARY POLICY AND AGRICULTURE DEVELOPMENT IN SINGAPORE is an original work prepared by me and is being submitted to University of Mumbai in partial fulfilment ofM.COM-I(GROUP)degree for the academic year 2012-2013.

To the best of my knowledge this report has been submitted to the University of Mumbai or any other affiliated college for the fulfilment of M.COM-I (GROUP)degree.

Date: Place:

Name: PRAKASH RANJAN Signature:

ACKNOWLEDGMENT

I Prakash ranjan the student of VIVA College pursuing my M.COM (GROUP),would like to pay the credits, for all those who helped in the making of this project.

The first in accomplishment of this project is our Principal Dr.R.D Bhagat, Vice Principle Prajakta Paranjape, Course co-ordinater Prof. Neelima Bhagwat and prof. & teaching staff of VIVA College.

I would also like to thank all my college friend those who influenced my project in order to achive the desired result correctly.

INDEX

1. Defination 2. Objective 3. Limitation 4. Singapore Monetary 5. Outlook 6. Agriculture Development 7. Conclusion 8. Bibiliography

According to Prof. Harry Johnson

"A policy employing the central banks control of the supply of money as an instrument for achieving the objectives of general economic policy is a monetary policy."

According to A.G Hart

"A policy which influences the public stock of money substitute of public demand for such assets of both that is policy which influences public liquidity position is known as a monetary policy."

Monetary PolicyMonetary policy is one of the two most important regulatory framework to maintain consistency in the economy, hence, economic development. Monetary policy is a major part of the state policy or precisely part of the economic policy persuedby the state for attaining its goals. It primarily involves decisions regarding monetary management Major Objectives.

Monetary Policy Definition. Monetary Policy is used to describe the activities undertaken by a government agency, typically the central bank of a country, to moderate the supply of money, availability of money, and cost of money or rate of interest to help promote economic growth, price stability, high employment, and a stable currency for use in international trade transactions. The Federal Reserve System is the monetary agency and central bank in the United States. The Fed carefully reviews the status of the domestic economy and, based on that review and accepted economic theories, formulates policies designed to obtain desired economic objectives in the marketplace. Generally, Monetary Policy is regarded as either expansionary or contractionary. The former is achieved by rapidly expanding the money supply in the economy, and the latter relates to the opposite approach. The general method used is to regulate interest rates as a means to achieve these objectives. The counterpoint to Monetary Policy is Fiscal Policy, which is the process of stimulating or contracting the economy through the use of government spending, borrowing and taxation Monetary policy.

Objectives of Monetary Policy The objectives of a monetary policy in India are similar to the objectives of its five year plans. In a nutshell planning in India aims at growth, stability and social justice. After the Keynesian revolution in economics, many people accepted significance of monetary policy in attaining following objectives. Rapid Economic Growth Price Stability Exchange Rate Stability Balance of Payments (BOP) Equilibrium Full Employment Neutrality of Money Equal Income Distribution

Rapid Economic Growth : It is the most important objective of a monetary policy. The monetary
policy can influence economic growth by controlling real interest rate and its resultant impact on the investment. If the RBI opts for a cheap or easy credit policy by reducing interest rates, the investment level in the economy can be encouraged. This increased investment can speed up economic growth. Faster economic growth is possible if the monetary policy succeeds in maintaining income and price stability.

Price Stability :
All the economics suffer from inflation and deflation. It can also be called as Price Instability. Both inflation are harmful to the economy. Thus, the monetary policy having an objective of price stability tries to keep the value of money stable. It helps in reducing the income and wealth inequalities. When the economy suffers from recession the monetary policy should be an 'easy money policy' but when there is inflationary situation there should be a 'dear money policy'.

Exchange Rate Stability : Exchange rate is the price of a home currency expressed in terms of any
foreign currency. If this exchange rate is very volatile leading to frequent ups and downs in the exchange rate, the international community might lose confidence in our economy. The monetary policy aims at maintaining the relative stability in the exchange rate. The RBI by altering the foreign exchange reserves tries to influence the demand for foreign exchange and tries to maintain the exchange rate stability.

Balance of Payments (BOP) Equilibrium : Many developing countries like India suffers from the
Disequilibrium in the BOP. The Reserve Bank of India through its monetary policy tries to maintain equilibrium in the balance of payments. The BOP has two aspects i.e. the 'BOP Surplus' and the 'BOP Deficit'. The former reflects an excess money supply in the domestic economy, while the later stands for stringency of money. If the monetary policy succeeds in maintaining monetary equilibrium, then the BOP equilibrium can be achieved.

Full Employment : The concept of full employment was much discussed after Keynes's publication of
the "General Theory" in 1936. It refers to absence of involuntary unemployment. In simple words 'Full Employment' stands for a situation in which everybody who wants jobs get jobs. However it does not mean that there is a Zero unemployment. In that senses the full employment is never full. Monetary policy can be used for achieving full employment. If the monetary policy is expansionary then credit supply can be encouraged. It could help in creating more jobs in different sector of the economy.

Neutrality of Money : Economist such as Wicksted, Robertson have always considered money as a
passive factor. According to them, money should play only a role of medium of exchange and not more than that. Therefore, the monetary policy should regulate the supply of money. The change in money supply creates monetary disequilibrium. Thus monetary policy has to regulate the supply of money and neutralize the effect of money expansion. However this objective of a monetary policy is always criticized on the ground that if money supply is kept constant then it would be difficult to attain price stability.

Equal Income Distribution : Many economists used to justify the role of the fiscal policy is
maintaining economic equality. However in resent years economists have given the opinion that the monetary policy can help and play a supplementary role in attainting an economic equality. monetary policy can make special provisions for the neglect supply such as agriculture, small-scale industries, village industries, etc. and provide them with cheaper credit for longer term. This can prove fruitful for these sectors to come up. Thus in recent period, monetary policy can help in reducing economic inequalities among different sections of society.

Price stability Inflation distorts economic calculations and expectations while deflation creates depression in the economy. Thus price stability should be the main aim of monetary policy. Price stability promotes business confidence, makes economic calculation possible, controls business cycle and introduces certainty in economic life. Exchange Stability Maintenance of stable exchange rates is an essential condition for the creationof international confidence and promotion of smooth international trade on the largest scale possible. Full Employment In under developed countries, the full employment objective is more crucial, because such economies have both unemployment and under employment. In less developed countries, though full employment cannot be achieved within a short period, the monetary policy should try to achieve at least a near full employment situation. Economic Growth This is comparatively a recent object of monetary policy. If refers to the growth of real income or output per capita. Monetary policy can contribute to economic growth in the following ways:

The Federal Reserve actions that are designed to influence the availability and cost of money. Specific policy includes changing the discount rate, altering bank reserve requirements, and open-market operations. In general, a policy to restrict monetary growth results in tightened credit conditions and, at least temporarily, higher rates of interest. This situation can be expected to have a negative impact on the security markets in the short run, although the long-run effects may be positive because of reduced inflationary pressures Monetary policy. A country's central bank is responsible for its monetary policy. In the United States, for example, the Federal Reserve aims to keep the economy growing but not allow it to become overheated. In a sluggish economy, the Fed may lower the short-term interest rate to loosen credit and allow more cash to circulate in an attempt to stimulate expansion. Or, if it fears the economy is growing too quickly, it may tighten credit by raising the short-term interest rate to reduce the money supply, in an attempt to rein in potential inflation. In pursuit of its monetary policy, the Fed can also increase or decrease the money supply by buying or selling government securities. To avoid a potential recession, for example, the Fed might increase its purchases of US Treasury notes and bonds from banks and brokerage firms, providing them with more money to lend.

The actions of a central bank, a currency board, or another regulatory committee that determine the size and rate of growth of the money supply, which in turn affects interest rates. In the Singapore, the Federal Reserve is in charge of monetary policy. Related Terms: Discount Rate Federal Funds Rate Federal Open Market CommitteeFOMC Interest Rate Required Rate of Return

What are the three tools of the monetary policy?

1. Open Market Operations: The Fed constantly buys and sells U.S. government securities in the financial markets, which in turn influences the level of reserves in the banking system.

2. The Discount Rate: This is the interest rate that banks pay on short-term loans from a Federal Reserve Bank.

3. Reserve Requirements: This is the amount of physical funds that depository institutions are required to hold in reserve against deposits in bank accounts. It determines how much money banks can create through loans and investment.

LIMITATION OF MONETARY POLICY IN SINGAPORE

1. There exists a Non-Monetized Sector

In Singapore there is an existence of non-monetized economy in large extent. People live in rural areas where many of the transactions are of the barter type and not monetary type. Similarly, due to nonmonetized sector the progress of commercial banks is not up to the mark. This creates a major bottleneck in the implementation of the monetary policy.

2. Excess Non-Banking Financial Institutions (NBFI)

As the economy launch itself into a higher orbit of economic growth and development, the financial sector comes up with great speed. As a result many Non-Banking Financial Institutions (NBFIs) come up. These NBFIs also provide credit in the economy. However, the NBFIs do not come under the purview of a monetary policy and thus nullify the effect of a monetary policy.

3. Existence of Unorganized Financial Markets

The financial markets help in implementing the monetary policy. In many developing countries the financial markets especially the money markets are of an unorganized nature and in backward conditions. In many places people like money lenders, traders, and businessman actively take part in money lending. But unfortunately they do not come under the purview of a monetary policy and creates hurdle in the success of a monetary policy.

4. Higher Liquidity Hinders Monetary Policy

In rapidly growing economy the deposit base of many commercial banks is expanded. This creates excess liquidity in the system. Under this circumstances even if the monetary policy increases the CRR or SLR, it dose not deter commercial banks from credit creation. So the existence of excess liquidity due to high deposit base is a hindrance in the way of successful monetary policy.

5. Money Not Appearing in an Economy

Large percentage of money never come in the mainstream economy. Rich people, traders, businessmen and other people prefer to spend rather than to deposit money in the bank. This shadow money is used for buying precious metals like gold, silver, ornaments, land and in speculation. This type of lavish spending give rise to inflationary trend in mainstream economy and the monetary policy fails to control it.

6. Time Lag Affects Success of Monetary Policy

The success of the monetary policy depends on timely implementation of it. However, in many cases unnecessary delay is found in implementation of the monetary policy. Or many times timely directives are not issued by the central bank, then the impact of the monetary policy is wiped out.

7. Monetary & Fiscal Policy Lacks Coordination

In order to attain a maximum of the above objectives it is unnecessary that both the fiscal and monetary policies should go hand in hand. As both these policies are prepared and implemented by two different authorities, there is a possibility of non-coordination between these two policies. This can harm the interest of the overall economic policy.

These are major obstacles in implementation of monetary policy. If these factors are controlled or kept within limit, then the monetary policy can give expected results. Thus though the monetary policy suffers from these limitations, still it has an immense significance in influencing the process of economic growth and development.

SINGAPORE MONETARY POLICY

Singapores monetary policy has been centred on the management of the exchange rate since the early 1980s, with the primary objective of promoting medium term price stability as a sound basis for sustainable economic growth. The choice of our monetary policy regime is predicated on the small and open nature of the Singapore economy. There are three main features of the exchange rate system in Singapore. 1. The Singapore dollar is managed against a basket of currencies of our major trading partners. 2. MAS operates a managed float regime for the Singapore dollar with the trade-weighted exchange rate allowed to fluctuate within a policy band.

The exchange rate policy band is periodically reviewed to ensure that it remains consistent with the underlying fundamentals of the economy. The Monetary Policy of Singapore carries out the full range of central banking functions related to the formulation and implementation of monetary policy. Monetary policy objective is price stability over the medium-term as the basis of sustainable economic growth. As monetary policy in Singapore is centred on the management of the trade-weighted exchange rate, MAS carries out foreign exchange operations to ensure that the Singapore dollar nominal effective exchange rate remains within the policy band. Monetary Policy also conducts money market operations to provide sufficient liquidity for a wellfunctioning banking system and to meet banks' demand for reserve and settlement balances.

INTRODUCTION
1 In October last year, Monetary Policy increased slightly the slope of the S$NEER policy band, with no change to the level at which the band was centred. This policy decision was made in light of upside risks to inflation amidst sustained high levels of domestic economic activity. At the same time, the policy band was widened slightly to accommodate volatility across international financial markets.

2 Since then, the S$NEER (Chart 1) has appreciated gradually within the upper half of the policy band. This took place in the context of a general strengthening in regional currencies given broad-based weakness in the US$ and continued investor interest in higher-growth Asian and emerging markets. Amidst conditions of abundant global liquidity, the domestic three-month interbank rate has eased further since end-October last year to 0.44%. OUTLOOK FOR 2011 3 The Singapore economy saw a step-up in the level of economic activity in Q1 this year following a slowdown in H2 2010. According to the Advance Estimates released by the Ministry of Trade and Industry today, Singapores GDP expanded by 23.5% on a quarter-on-quarter seasonally adjusted annualised basis in Q1 2011. The expansion was broad-based across the trade-related1 and services sectors, reflecting an improvement in final demand.

4 The global economy is expected to grow at a moderate pace in 2011, notwithstanding the increased uncertainty arising from the spike in oil prices and the calamity in Japan. Supported by a gradual improvement in the labour market and accommodative fiscal measures, the US economy should continue on its recovery path. In Asia ex-Japan, resilient household spending and a pickup in business investment are expected to underpin growth. In Singapore, while a temporary slowdown is forecast for Q2, economic growth is projected to be sustained across a wide range of industries for the rest of the year. Reflecting in part the robust expansion in Q1, GDP growth for the year as a whole is likely to be at the upper end of the 4-6% forecast range. 5 CPI inflation rose from 3.4% in Q3 2010 to 5.2% in the first two months of 2011, while MAS Core Inflation2 remained at around 2%. The increase in headline inflation was largely due to a sharp rise in COE premiums and imputed rentals, but the contribution of these two factors will ease as base effects dissipate. However, wage pressures have been building up amidst a tightening labour market. Although the pass-through of wages to services costs has been relatively muted so far, the pass-through could strengthen given firm economic conditions. On the external front, global oil and food prices have increased and will remain high. Taken together, headline inflation is forecast to stay elevated and will moderate only gradually to around 3% by Q4 2011. For the whole year, CPI inflation is expected to come in at the upper half of the 3-4% forecast range3 while MAS Core Inflation will be 2-3%.

MONETARY POLICY 6 Economic activity is likely to be sustained at a high level for the rest of the year, even as the underlying growth momentum moderates. With factor markets tight, domestic cost and price pressures will remain firm. 7 MAS will therefore re-centre the exchange rate policy band upwards. The exchange rate policy band will be re-centred below the prevailing level of the S$NEER. This adjustment takes into account the tighter policy stance adopted in April and October last year, which will continue to have a restraining effect on the economy and prices. There will be no change to the slope and width of the band. This policy will ensure price stability in the medium term while keeping growth on a sustainable path.

AGRICULTURE DEVELOPMENT IN SINGAPORE (1991-2011)

Decision-Making: Coordinating Bodies The Agricultural Policy is implemented by the Primary Production Department (PPD), Ministry of National Development, and it forms an integral part of the Departments overall food policy of ensuring a stable and adequate supply of safe, wholesome and quality meat, fruits and vegetables in Singapore. PPD is the national authority dedicated to safeguarding the health of people, animals, fish and plants through advanced technology in agriculture, fisheries and veterinary science.

Decision-Making: Strategies, Policies and Plans The National Agricultural Policy of Singapore aims to develop the limited agricultural areas, both land and sea, to produce prime quality food and to serve as benchmarks on quality and pricing for imports and exports (i.e. export of ornamental fish and plants).

Programmes and Projects Integrated pest management is practised in the farms. (E.g. netted vegetable production and hydroponics to reduce the use of pesticides in the vegetable production). Singapore's agro technology parks were built following its Ministry of Environment's anti-pollution guidelines. All land in Singapore is utilised according to its National Master plan. About 1500 ha of land is reserved for our Agro technology Park Development while 500 ha is reserved for our Marine Park development.

Status
Agriculture is of very limited significance to the Singapore economy, representing only 0.1 per cent of GDP, estimated at S$134 billion (US$84 billion) in 1998. Agriculture products include vegetables, eggs, fish, milk, and ornamentals, namely orchids and other ornamental plants, and ornamental fish. Approximately 90 per cent of food consumed in Singapore is imported. In 1998, value of total supply of primary produce was S$2 billion. Singapore is an island city state consisting of a total land area of 647 sq km. With limited land and sea resources for agriculture, Singapores agricultural developments take place mainly in allocated areas, called Agro technology Parks on land and Marine Parks at sea. These Parks are developed and managed by the Department, and cover a total of 2,000 ha, with 1,500 ha for Agro technology Park development and 500 ha for Marine Park development. Agro technology is the application of modern science and technology to large-scale, intensive farming so as to optimise use of resources and increase yield and productivity in the farm. It is the aim of the Department that, in the long-term, Singapore could develop to become an agro technology centre focussing on tropical and urban agriculture. There are six Agro technology Parks, with 441 farms occupying some 1,034 ha (1998 figures), producing vegetables, eggs, fish, milk, as well as ornamental plants and fish. Usually the Parks have a mix of farms. This is to minimise spread of disease specific to a single type of species of plant or animal and to minimise environmental impact and pollution. Adjacent to the Lim Chu Kang Agro technology Park, a 10 ha Agri-Bio Park has been established, which is dedicated to agri-biotechnology investments. The Marine Parks are for marine fish farming, there being five Parks with 90 floating fish farms producing both finfish and shellfish. The Department regulates the number of floating farms in each Park so as to prevent water stagnation and poor water quality within the farming site. The agricultural products, with the exception of the ornamentals, are destined for domestic consumption, which is relatively high, in terms of per capita consumption. Example: per capita consumption of chicken is 32 kg, pork 23 kg, fish 26 kg, vegetables 77 kg, and fruits 82 kg.

Agriculture activities in Singapore can be broadly classified into 12 categories, viz,

Food fish:

1. Food fish production in floating cages at sea; 2. Food fish production on land-based ponds/tanks, 3. Ornamental fish production in ponds/tanks;

Animals:

4. Hens egg production; 5. Production of duck, quail and other game birds; 6. Farming of dairy cattle and goats; 7. Farming of Frog and Crocodile; 8. Breeding of exotic birds.
Plants:

9. Vegetable production; 10. Fruit growing; 11. Orchid and ornamental plant production;
Aquatic Plant production.

Singapore imports 90% of its food supply as it is not self-sufficient. Capacity-building, Education, Training and Awareness-raising The Government has initiated extension services to farmers, education programmes and visits to the farms in its Agro technology Parks.

Decision-Making: Coordinating Bodies The key ministries and bodies involved in the issues related to climate change and sea-level rise are the Ministry of the Environment, Ministry of Trade & Industry and Attorney-Generals Chambers. Decision-Making: Legislation and Regulations The Montreal Protocol (1987) was acceded to on 5 January 1989, and the London Amendment (1990) was acceded to on 2 March 1993. The latest report to the Montreal Protocol Secretariat was prepared in 1995. The United Nations Framework Convention on Climate Change was signed on 13 June 1992. Decision-Making: Strategies, Policies and Plans The strategy adopted in Singapore is to take no-regrets measures such as promoting energy efficiency. As a long-term measure to alleviate flooding, all development of land would need to comply with a requirement of a minimum platform level that is above the predicted flood level. Low-lying areas thus have to be raised in order to meet the requirement before the land can be built upon. The requirement is imposed during the planning process. Decision-Making: Major Groups involvement Depending on the issues at hand, the relevant groups have been invited to participate in the formulation of policies or to provide feedback on proposed policies. Various channels have been employed and these include setting up formal committee, organising forum or specific feedback sessions and regular dialogue sessions. Programmes and Projects The key programmes that address issues related to climate change and sea-level rise are the following:

Switch from fuel oil to natural gas; Promote energy efficiency in both supply and demand sides; Provide an efficient and comprehensive public transportation to curb growth in vehicle population and use;

Waste minimisation programmes (e.g. Green label scheme);

Programmes to encourage the corporate sector to integrate environmental concerns into their businesses e.g. a national committee to promote ISO 14000 ).

Status
Singapore has adopted a multi-pronged approach to reduce and eventually phase out the consumption of ozone-depleting substances (ODS). The Ministry of the Environment (ENV), acting as a focal point between government agencies, is responsible for formulating strategies and policies to control the use of ODS in industries. The Ministry of Trade and Industry, through the Trade Development Board, administers a Tender and Quota Allocation System to cap the consumption of ODS in accordance with guidelines set by the Protocol. The system ensures an equitable distribution of the controlled supply of ODS to registered distributors and end-users. The government and the private sector have collaborated in various activities under this programme. To keep carbon dioxide emission level as low as possible, action programmes have been formulated to promote energy efficiency and resource conservation. Power generation is from fuel oil and natural gas and accounts for about half of the carbon dioxide emission. To improve efficiency, combined-cycle technology is being introduced wherever it is technically feasible to do so. Resource conservation programmes aim to minimise use of energy, water and other raw materials and hence to reduce waste generation. Financial and technical assistance schemes have also been made available to help industries switch to non-ODS substitutes or alternatives. The Singapore Productivity and Standards Board (PSB) provides technical consultancy to small and medium enterprises wishing to switch to ozone-friendly processes under the Local Enterprise Technical Assistance Scheme. Companies which require financial assistance can seek grants through the PSB which administers the Local Enterprise Finance Scheme (for concessionary loans) and also approach the Economic Development Board for the Investment Allowance Scheme (tax allowance for approved investment in new equipment).

Climate change and sea level rise

Coastal and low-lying areas would be affected by a sea level rise, if preventive or adaptative measures are not taken. The long-term measure to alleviate flooding is to require all developments of land to comply with a minimum platform level that is above the predicted flood level. Low-lying areas thus have to be raised in order to meet the requirement before the land can be built upon. The main issues relating to climate change and sea level rise in Singapore are the total dependence on imported fuels for energy needs, and the limited scope to develop renewable energy sources. Using resources in an efficient way to stay competitive and to contain growth in greenhouse gas emissions.

Financing The costs for implementing plans for adaptation to sea-level rise are borne by the developers and included in the cost of development. Activities related to climate change and sea level rise are financed by the individual developers, most of which have their own source of funding.

Cooperation Singapore participates in the IPCC programmes and meetings. Singapore has Regional Fire fighting Arrangement for Sumatra on haze.

BIODIVERSITY MANAGEMENT FOR AGRICULTURE Decision-Making: Coordinating Bodies National Parks Board, Ministry of National Development is responsible for biological diversity. The designated land planning agency obtains the views and feedback from all the concerned parties before making decisions on land-use. Decision-Making: Legislation and Regulations National Parks Act, Parks and Trees Act, Endangered Species (Import and Export) Act, The Wild Animals and Birds Act and The Control of Plants Act address the issues of biological diversity. Decision-Making: Strategies, Policies and Plans The Singapore Green Plan documents Singapores approach to environmental management, of which nature conservation is one component. Decision-Making: Major Groups involvement Participation of community groups for the protection and conservation of biological diversity is encouraged through the following activities:

Clean and Green Week; National Youth Achievement Award; Schools curriculum-based and extra-curriculum activities; Extension courses by the School of Horticulture (SOH); Activities by the Singapore Environment Council; and The National Parks Boards Adopt-a-Park Programme and Reforestation Programme which involves schools and youth organisations.

Programmes and Projects

The following main activities and programme are underway:

Formulation of policies on nature conservation, access to genetic resources and biosafety; Identification and safeguarding representative ecosystems; Survey, stocktaking and monitoring biodiversity of indigenous species; Restoration ecology projects; Setting up of databases on biological diversity; Co-ordination and identification of scientific research projects that are pertinent to the documentation and management of biodiversity; and

Awareness and conservation education programmes targeted at schools and the general public.

Status

Inventory and monitoring of indigenous species, and competing land use demands are the main issues relating to biodiversity management in Singapore. The major constraints to effectively implement programmes on biodiversity are related to competing demands for very limited resources, and insufficient staff.

About 5 % of the land area is naturally vegetated. A biological survey of the Nature Reserves that comprise of the largest area under natural vegetation has just been completed. The data collected is currently being used to identify management priorities and form the basis for future research and monitoring. Inputs on nature conservation are considered in the planning and development processes.

Capacity-building, Education, Training and Awareness-raising Campaigns or other efforts to raise awareness of issues related to sustainable development and biodiversity resources include:

Clean & Green Week; and The Singapore Environment Councils programmes and activities, e.g. Earth Day celebrations

Singapore has biological diversity, socio-economic and present land use data, and proposed land-use information for decision-makers and planners working in the area of biodiversity resources. Research and Technologies Biosafety is a field in which Singapore is active for development, transfer and use of environmentally sound technologies. Safety to human health is accorded top priority when decision on choosing technologies are made. Financing This sector is financed by the national budget. Private sector partnership for some projects. Cooperation Singapore is Party to:

Convention of Biological Diversity; Convention on International Trade of Endangered Species; and Association of Southeast Asian Nations (ASEAN) Working Group on Nature Conservation.

Other international co-operation includes:

ASEAN Regional Centre for Biodiversity Conservation (ARCBC); and ASEANET (Southeast Asian Loop of BioNet).

Benefits of the cooperation include: harmonised policies can be adapted (e.g. bio safety, access to genetic resources)

ENERGY FOR AGRICULTURE Decision-Making: Coordinating Bodies The Ministry of Trade and Industry is responsible for energy resources. The key ministries and bodies involved in the issues related to climate change and sea-level rise are the Ministry of the Environment, Ministry of Trade and Industry and Attorney-Generals Chambers. A national inter-agency committee on energy efficiency comprising government ministries, statutory boards and academics from the universities has been formed to review and study issues related to improving energy efficiency on a national basis.

Decision-Making: Legislation and Regulations Codes of practice on energy conservation include:

Part 1: Coefficient of Performance of Air-conditioning equipment Part 2: Ventilation and Air-conditioning system Part 3: Procedure for determination of a lighting power budget Code of practice for mechanical ventilation and air-conditioning in buildings Code of practice for artificial lighting in buildings.

The codes of practice and standards were drawn up by the Government jointly with the industry. Unlike the Building Control Regulations, compliance with the codes of practice is voluntary. Decision-Making: Strategies, Policies and Plans The national policy relating to energy resources covers issues on pricing, energy conservation, efficiency in energy production, and diversification in fuel supplies. The main policy measures are:

1. Letting market forces of supply and demand determine energy price ensures that energy is used more efficiently. 2. Regular review of electricity and gas tariffs to ensure that they are cost reflective. Energy Conservation 3. Promotion of energy conservation through a combination of financial incentives and disincentives and through education. 4. Incorporation of a set of energy conservation standards for building design into the Building Regulations. 5. Design of fiscal policies to encourage the public to use smaller, more efficient vehicles. 6. Encouragement in the use of public transport. Efficiency in Energy Production 7. Achieving greater efficiency through market competition in the generation and sale of electricity. Diversion of Energy Supplies 8. Energy diversification through the use of natural gas in addition to oil. Government legislation for energy conservation comes under the Building Control Regulations, 1989. The energy conservation requirements under the Building Control Regulations stipulates that the building envelope overall thermal transfer value (OTTV) of an air-conditioned building shall not exceed 45 W/m2. Decision-Making: Major Groups involvement The process of national decision-making for issues related to energy resources involves members from the Government, business, industry and the science and technology community.

Status Almost all of Singapores energy needs are imported. With the current technologies in renewable energy development, the potential for increasing energy supply through renewable energy is relatively small. The main issues relating to climate change and sea level rise in Singapore are the total dependence on imported fuels for energy needs, and the limited scope to develop renewable energy sources. Using resources in an efficient way to stay competitive and to contain growth in greenhouse gas emissions.

Capacity-building, Education, Training and Awareness-raising The inter-agency committee on energy efficiency comprising the government, statutory boards and academia was formed to review the current status of energy usage in order to identify opportunities and make recommendations to improve the overall national energy efficiency. Energy management courses are conducted by the Public Utilities Board jointly with the polytechnics and universities. These courses are targeted mainly at working technical staff and professionals. Workshops and seminars and talks are also organised for the different sectors of the industry on a regular basis. The Singapore Green Label Scheme, administered by The Ministry of the Environment, is a voluntary scheme for consumer appliances such as computers, air-conditioners, refrigerators, etc, to be awarded the green label for efficient use of resources. The annual national Clean & Green week, held in the month of November every year, also raises the awareness of issues related to sustainable development and energy efficiency. Other campaigns and programmes include: a two-day energy conservation awareness programme conducted for school children, on an on-going basis; periodic Save Energy Campaigns and educational programmes aimed at promoting energy conservation; establishment of a permanent exhibition open to the public in the Energy Conservation and Exhibition Centre; and the Energy Audit, an on-going service provided by the Public Utilities Board (Energy Conservation centre) to promote energy efficiency in the corporate sector.

Information The kinds of information available to decision-makers and planners include: Energy audits and surveys of industry sectors, and energy balance data. The relevant information is made available through various reports and publications. Plans are underway to develop benchmarks on electricity usage to enable consumers to know whether they are using electricity efficiently. Research and Technologies There is limited scope for development of renewable energy source in Singapore. Only commercially proven and viable technologies are considered. In addition to this consideration decisions are made based on economic cost-benefit and environmental impact analyses. Financing Until recently, power generation was solely a government-owned development and operation. The financing was thus from the national budget. The private sector can now develop and operate power plants. Industries can also generate their own power if they wish to. The private sector seeks their own source to finance the venture. The costs for implementing plans for adaptation to sea-level rise are borne by the developers and included in the cost of development. Activities related to climate change and sea level rise are financed by the individual developers, most of which have their own source of funding. Cooperation Singapore is involved in the Energy Working Group (EWG) of the Asia Pacific Economic Cooperation (APEC), and ASEAN Energy Ministers Forum.

FRESH WATER FOR AGRICULTURE Decision-Making: Coordinating Bodies In Singapore, the Public Utilities Board (PUB) is responsible for management of freshwater resources. It is the statutory board responsible for the provision of an efficient and reliable supply of potable water to the nation at the most economic cost. PUB is under the purview of the Ministry of Trade and Industry that is responsible for economic policies in Singapore. In the management of local water resources, PUB coordinates with various government ministries and agencies, such as the Ministry of National Development on land-use, Ministry of the Environment (ENV) on control of water pollution control of water pollution, and Ministry of Law in regard to legislation and regulations. PUB maintains close liaison with the relevant government agencies on expansion of the water supply network and on integrated land use planning that includes pollution control of run-offs. Decision-Making: Legislation and Regulations PUB, together with other government bodies, are empowered under the following legislation and regulations to protect the water catchments, water courses and reservoirs:

Public Utilities Act; The Public Utilities (Water Supply) Regulations; The Public Utilities (Central Water Catchment Area and Catchment Area Parks) Regulations; Water Pollution Control and Drainage Act; The Trade Effluent Regulations; The Cattle Act; The Poisons Act; The Environmental Public Health Act; and The National Parks Act.

PUB uses the World Health Organisations Guidelines for Drinking Water as the standard to monitor the quality of its potable water.

PUB uses the Singapore Standards (SS) CP 48:1989 Code of Practice for Water Supply (published by the Productivity & Standards Board of Singapore). The SS serve as a guideline for architects, professional engineers and licensed plumbers. Where applicable, the equivalent British Standards and ISO standards are also used. Decision-Making: Strategies, Policies and Plans Singapore has a national policy that covers all of the major issues relating to freshwater management. Under the drainage development programme, the Ministry of the Environment (ENV) builds new drains and canals to reduce flooding in flood-prone areas and to provide drainage outlets for new developed areas. Singapore also maintains 22 tide-gates to protect low-lying areas against tidal inundation. PUB has contingency plans and operating procedures to cope with prolonged dry weather situation. These include early alerting of the public to conserve water. Singapores water pricing policy is based on cost-recovery and support of water conservation objectives. There are fiscal incentives to promote water conservation in industry and monetary penalties to discourage wasteful use of water. The water tariff structure comprises two broad categories: (i) domestic (households) and (ii) non-domestic (industrial and commercial). The water conservation tax, which is a percentage of water charges, is imposed. Currently, the non-domestic tariff is a flat rate for all consumption levels while the domestic tariff comprises three consumption block rates. However, since July 1997, annual tariff adjustments will be made up to year 2000 to bring the domestic water tariffs (for consumption of 40 cubic metres per month or less) into a uniform flat rate with the non-domestic tariff. The objective is to reflect the strategic importance of water and to prepare consumers for the higher cost of water from future sources. Water costs are fully (100 percent) recovered through pricing. Prevention of pollution of freshwater supplies for potable use is effected through pollution surveillance of catchments, which includes enforcement action by the relevant agencies, and constant water quality monitoring.

Water conservation is a national policy in Singapore in view of the limited water resources. A comprehensive water conservation plan has been formulated to check the growing water demand and ensure that water is being used efficiently. The plan covers the following aspects:

Public education and publicity programme to raise the level of public awareness on the need to conserve water;

Mandatory installation of water-saving devices (e.g. self-closing delayed action taps, constant flow regulators) at non-domestic premises and public places. The use of low capacity flushing cisterns is also mandatory for new housing developments and residential upgrading projects;

Reuse and recycling of process water by industries; Substitution of potable water requirement with non-potable water such as industrial water (treated sewage effluent), seawater and rainwater; and

Audits of large non-domestic installations.

LAND MANAGEMENT Decision-Making: Coordinating Bodies Singapore has one land-use planning authority that handles every aspect of planning from strategic longterm planning to day-to-day development control. Coordination among responsible bodies for land management is facilitated by various standing committees and panels. Some examples are: - Master Plan Committee: Members include Ministry of the Environment, National Parks, Ministry of Defence, Land Transport Authority, etc. The committee considers and co-ordinates public department proposals and resolve conflicts and land uses among the public agencies. - Waterbodies Design Panel: Members from various agencies work to enhance the aesthetic and recreational potential of waterways to turn canals running through urbanised areas into richly landscaped rivers, enhancing the residential developments along them. - The URA works with various agencies when preparing and reviewing the Concept Plan and Master Plan. OCEANS AND COASTAL AREAS Decision-Making: Coordinating Bodies The Maritime and Port Authority of Singapore (MPA) is responsible for marine environment protection from sea-based activities. The MPA has established the Marine Emergency Action Procedure (MEAP) to deal with marine emergencies, including oil spills. The MEAP sets out the roles of various other agencies involved in such emergencies. MPA adopts a comprehensive approach towards the protection of Singapores marine environment, based on prevention and preparedness. The key ministries and bodies involved in the issues related to climate change and sea-level rise are the Ministry of the Environment, Ministry of Trade & Industry and Attorney-Generals Chambers.

Orchard Road, now one of Singapore's most up-scale thoroughfares, got its name because it originally was lined with fruit orchards and vegetable gardens. Although contemporary Singapore still maintained a tiny agricultural base, by 1988 urbanization had reduced the land area used for farming to only about 3 percent of the total. Nonetheless, with intensive production, the farming sector met part of the domestic demand for essential fresh farm produce: poultry, eggs, pork, some vegetables, and fish. In 1988 there were 2,075 licensed farms occupying only 2,037 hectares of land, with a total output of some S$362 million worth of farm produce. A decade earlier farm holdings had covered 1,280 hectares. The Primary Production Department, under the Ministry of National Development, ensured an adequate and regular supply of fresh produce and provided support for agro-industries, including research and development aimed at improving commercial and hightechnology farming. The department projected in 1988 that a total of 2,000 hectares of land in ten agro-technology parks would be developed and rented out for long-term farming over the next decade. The government began phasing out pig farming in 1984 because of odor and environmental pollution. Some 200 pig farms raising about 500,000 pigs in 1987 were scheduled to be reduced to 22 farms with 300,000 pigs by 1990. Imports from Malaysia, Indonesia, and Thailand would be increased to meet domestic needs. Some 1,000 poultry farms kept a total of about 2.2 million layers, 1.6 million broilers, 245,000 breeders, and 645,000 ducks. Singapore remained free of major animal diseases. Singapore grew 5.6 percent of its total supply of 180,000 tons of fresh vegetables in 1988 and imported the rest from Malaysia, Indonesia, China, and Australia. The main crops cultivated locally included vegetables, mushrooms, fruit, orchids, and ornamental plants. About 370 vegetable farms produced an estimated 10,000 tons of vegetables, and mushroom cultivation expanded rapidly after the mid-1980s. The Mushroom Unit of the Primary Production Development conducted research on mushroom cultivation and advised commercial mushroom growers, who produced a variety of mushrooms for the local market. Noted for its orchids, Singapore exported flowers worth S$13.8 million in 1988, mainly to Western Europe, Japan, Australia, and the United States. Singapore's 153 orchid farms produced another S$2.2 million worth of flowers for the domestic market.

Local fishermen provided about 13 percent of the country's 110,000-ton fresh fish supply in 1988, using three major fishing methods--trawling, gill-netting, and long-lining. There were about 1,170 licensed fishermen operating nearly 400 fishing vessels, most of which were motorized. The Jurong Port and Market Complex was a major fish landing point for both domestic and foreign vessels and handled 84 percent of the total fresh fish supply in 1988. Many foreign vessels brought their catches there for processing and reexport. Fresh fish arrived also by truck from Malaysia and Thailand and by sea and air from other neighboring countries. Fish farming was a small but growing field. In 1988 seventyfour licensed marine fish farms raised mainly high-value fish such as grouper and sea bass in a total of forty hectares of coastal waters. Many of the farms had also introduced prawn farming in floating cages. Exports of ornamental fish for aquariums amounted to S$60 million in 1988. Some 400 licensed aquarium fish farms operated in Singapore in 1988, including 36 commercial farms operating in the Tampines Aquarium Fish Farming Estate.

The Singapore economy has weakened over the last two quarters, alongside some softening in global economic activity. According to the Advance Estimates released by the Ministry of Trade and Industry today, Singapores GDP declined by 1.5% on a quarter-on-quarter seasonally adjusted annualised basis in Q3 2012, following marginal growth of 0.2% in the revised Q2 data. The external oriented sectors, including the manufacturing, wholesale and transport & storage industries, bore the brunt of the downturn. However, construction and financial services remained broadly resilient. With the unemployment rate at 2.1%, car prices at a 10-year high, and mass-market home prices 25% above the previous peak in 1996, a key challenge for the government will be to facilitate the inflow of the foreign workforce in a tight job market while addressing overcrowding concerns. We expect population growth to slow in the next two to three years.

Conclusion

Singapores GDP growth is thus likely to be positive though below-trend next year but the level of output will remain above trend and the labour market at full employment. Domestic labour cost pressures are therefore likely to persist and feed into services inflation. Together with higher imported food prices, due to weather-related supply disruptions, underlying inflationary pressures will continue into 2013. Given the extended deleveraging process in the advanced economies, Singapore will continue to face short-term cyclical headwinds over the next few years while domestic restructuring policies are implemented.

We think QE2 will benefit Singapore, not by re-rating nominal asset prices per se,but by lifting regional demand for consumer and investment services, which wouldplay into Singapores strength as a regional hub. Stocks appear inexpensive versusbonds; the latter have heavily re-rated as inflows chase Singapore dollarappreciation.

BIBLIOGRAPHY

http://www.mas.gov.sg/News-and-Publications/Surveys/MAS-SurveyofProfessional-Forecasters.aspx

http://www.mas.gov.sg/Monetary-Policy-and-Economics/MonetaryPolicy/Macroeconomic-Review.aspx

http://www.mas.gov.sg/Monetary-Policy-and-Economics/MonetaryPolicy/Monetary-Policy-Statements-and-Speeches.aspx

http://www.mas.gov.sg/Monetary-Policy-and-Economics/EducationandResearch/Education/Economics-Explorer.aspx