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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 4 | P a g e
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