End of part a 3 p a g e part b policy brief report

End of Part A
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PART B: Policy Brief report
Subject:
Making Singapore Future Ready: Macroeconomic Challenges and Recommendations
Executive Summary:
From the analysis conducted in the initial part of the report,it can be said that the Singapore
and economy is facing two major macroeconomics challenges; rising household debt and
rising unemployment. The main rationale behind the recommendations is to improve the
flexibility of the economy for dealing with short term effects and building sufficient
capability in the economy for dealing with the long-term challenges. The major
recommendations are adopting demand side expansionary policies, restructuring of household
debt, debt consolidation plans, taking policies to improve productivity and reducing
inequality.
Recommendations:
Singapore mainly faces two different types of Unemployment, frictional unemployment, and
unemployment caused by business cycles. Frictional Unemployment generally takes place as
the workers changed their jobs regardless of the state of the economy (Channel NewsAsia,
2018). However, the major cause of concern for Singapore is the unemployment related to
change in business cycles. For dealing with such kind of unemployment it is important that
the government of Singapore adopts various fiscal policies that will encourage the
organisation to preserve the jobs even during the downturn of the economy (Channel
NewsAsia, 2018). Along with that, the government will also take fiscal policies for ensuring
that the organisations remain financially viable by providing them access to credit for
sustaining their operations and retaining their jobs during the economic downturn period.
However, the long term unemployment in Singapore can be reduced by continued focus on
education and training and offering subsidies in diversified sectors of the economy (Snower
& Dehesa, 2005).
In order to reduce the rising household debt in Singapore, there are several measures that can
be adopted by the government. Firstly the government can provide temporary
macroeconomic stimulus through policies (Debelle, 2004). Secondly, the government can
provide support to the household through the various social safety net. Additionally, the
government can also offer support to the financial sector and provide support in the
restructuring of household debt (Cynamon & Fazzari, 2008). Also, the financial institutions
would have to introduce new policies that would help the consumers to rein their bloating
debt issue.
Economic Rationale:
One of the major economic rationale behind adopting demand-side policies is that they are
helpful in reducing unemployment caused due to demands of deficiency in the economy. Like
in the case of unemployment caused due to business cycles (Snower & Dehesa, 2005). Fiscal
policies can be helpful in reducing the unemployment rate by improving the aggregate
demand and the economic growth rate. The Government of Singapore would have to pursue
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