Question:
Discuss about the Global Economic Policies.
In the contemporary global economic scenario, several countries have emerged as the new economic giants, showing highly impressive trends in aspects of economic growth, productivity, employability, industrial growth and overall increased welfare of their residents. One of such economically growing countries in the recent periods is that of Singapore (Tremewan, 2016). The economy of Singapore is the most open economy in the world and is one of the least corrupt ones in the international scenario. The country, over the years, have shown significant growth in economic and welfare terms, much of which can be attributed to the robust strategic framework and the economic policies taken by the governing authorities of the country (Rodan, 2016).
One of the most outstanding as well as economically contributing aspects of this country is the Changi Airport, which stands as the centre of attraction of the populous and commercially busy economy of the country and is one of the biggest facilitator and contributor to the economic progress of the country in the recent years. The airport, has been evolving and modifying since its establishment and has been winning the title of the World Airport of the Year, for five consecutive years, including 2017 (Hwang & Low, 2012).
The report tries to discuss the unique characteristics of the Changi Airport and sheds light on its contributions, not only in facilitating business and progress of the economy, but also in creating new sources of employment and industrial linkages of the same with aviation related sectors, thereby contributing to the progress of the country (Bok, 2015). In light of economic theories and conceptual frameworks, the report also tries to highlight the competitions, which the airport faces in the cotemporary commercial scenario and tries to recommend ways in which it can stay ahead and contribute in the overall economic development of the country.
Since its establishment in 1981, the Changi Airport has expanded its domain of operations significantly with time and has grown at par with the progress and economic and commercial growth of the country. The airport served to more than 100 airlines, flying to and from 270 cities across the world, thereby establishing commercial relationships with above 60 countries across the globe. The flights are inclusive of both domestic and international transport of not only passengers as well as cargos. In the previous year, the airport facilitated nearly 54.1 million domestic and international passengers, which is its highest in the history of the airport (Tsui et al., 2014).
In terms of contributions to the economic growth also, the airport plays a significant role. This is unique and highly subjective to the Changi Airport and Singapore only. The airport single handedly created around 163,000 jobs (both in the facility itself as well as in airport and aviation related industry) in 2013, with the scopes increasing further in the coming years with the commercial expansion of the country (Teo & Chang, 2012). The airport also contributed to almost 6% of the Gross Domestic Product of the country in the recent years, which is huge given the fact that the country experiences tremendously high. This in turn, indicates towards the fact that the airport has capabilities of contributing significantly to the economic development and the overall welfare of the residents the country.
From the time of its opening, the airport has received immense limelight from the local residents and over the years has become one of the international attractions as well as it facilitates both businessmen as well as pleasure travelers in the country as well as from all over the world. The huge number of employments created by the airport in the country, in the recent periods, has also increased the income in the hands of people in the country, which in turn has resulted in increase in their aggregate demand, thereby increasing the productivity in the economy (Burghouwt & Redondi, 2013). On the other hand, by facilitating worldwide transport of passengers as well as cargos all over the world, the airport has been facilitating trade and commerce significantly, which in turn has resulted in convenience for the producers in the country as they can import raw materials as well as export their products with convenience. For the foreign investors as well as entrepreneurs also, this facility has proved to be helpful, which has increased the inflow of capital and businesses from all over the world to the country.
In the recent years, with the economic development of the Asian countries, especially the Four Asian Tigers, Taiwan, Singapore, South Korea and Honk Kong, commercial activities have increased significantly in these nations and their international relations have strengthened considerably. This has led to immense expansion of activities of the international air hubs in these Asian countries (Jimenez, Claro & de Sousa, 2014). Changi Airport of Singapore, thus, experiences considerable competition from similar air hubs, especially those present in Hong Kong, Taiwan and others. In this highly competitive scenario, to remain as the foremost airport and air hub of Southeast Asia, each of these air hubs have engaged in immense competitive and expansive behavior. While the air hub in Hong Kong is expected to get a third runway, costing nearly 18.2 billion USD, the strategic plans for Changi airport is also similar. Changi airport, in the near future is expected to get a fifth terminal connected to the third runway (Bush & Starkie, 2014). For the same, the governing authorities have allocated a first installment of 2.15 billion USD and the project, if succeeds, is expected to increase the annual passenger capacity of the airport to 150 million by 2025.
As can be seen from the above figure, though the number of passengers catered by the Changi airport has increased over the years, the annual growth rate of the same has consistently decreased moderately over the last few years. Much of which can be attributed to the presence of other competing and able international air hubs in the other Southeast Asian countries.
Thus, from the above discussion it can be asserted that it is of utmost importance for the concerned airport to take the presence of high competition into consideration. To stay ahead of the competition and to increase the passenger growth rate in the coming years, Changi airport needs to develop and execute their strategies in such a way that the airport remains as the primary international air hub in the Southeast Asian zone and one of the main facilitator of international travel and transit.
As can be seen from the above discussion, the Changi airport in Singapore has been, over the years, has remained one of the primary facilitators of international as well as domestic transport across the world. The airport has contributed significantly in building up the industrial as well as commercial sector of the country and has also created employment for a huge number of workers in the airport and aviation related sectors in the country. However, with the increase in the commercial activities and integration of the same across the globe the scopes of Changi airport is also expected to increase. However, with the considerable amount of competition in this sector, the need for expansion as well as diversification is felt in case of Changi airport (Graham, 2013).
The airport has already diversified to a huge extent from being a mere transport facility to much more for the travelers as well as the residents of the country. Apart from the efficient managements of flights and the comfort and convenience of the in transit passengers, the airport has developed into a social space and entertainment destination for family outings as well as for the travelers. In the recent years, the airport has developed a unique complex of indoor gardens, which has gained immense attention globally. This Jewel Changi Airport not only serves the purpose of airport but also has the importance in the aspect of tourism and environment preservation (Halpern & Graham, 2013).
However, the airport still has scopes of expanding its operations in educational and skill building purposes, which may increase the employability of greater sections of population thereby contributing to the economic development. On the other hand, the new developments and beautification of Changi airport has been gaining huge amount of attraction from pleasure travelers as well as local residents. This is expected to create considerable revenue generation and inflow of cash, which is expected to contribute in the economic development of the country.
Conclusion
The above discussion asserts that Changi airport has developed significantly in the last few decades and is currently one of the busiest as well as most popular international air hubs in the county. The airport also has significant contributions in the economic and commercial growth of Singapore due to its contribution in the GDP of the country as well as its employment generations capabilities. However, in the contemporary competitive scenario, there still scopes of expansion and revenue generation of the facility, which can help, in transforming the same as a sustainable source of economic development in the country.
References
Bok, R. (2015). Airports on the move? The policy mobilities of Singapore Changi Airport at home and abroad. Urban Studies, 52(14), 2724-2740.
Burghouwt, G., & Redondi, R. (2013). Connectivity in air transport networks: an assessment of models and applications. Journal of Transport Economics and Policy (JTEP), 47(1), 35-53.
Bush, H., & Starkie, D. (2014). Competitive drivers towards improved airport/airline relationships. Journal of Air Transport Management, 41, 45-49.
Graham, A. (2013). Managing Airports 4th edition: An international perspective. Routledge.
Halpern, N., & Graham, A. (2013). Airport marketing. Routledge.
Hwang, B. G., & Low, L. K. (2012). Construction project change management in Singapore: Status, importance and impact. International Journal of Project Management, 30(7), 817-826.
Jimenez, E., Claro, J., & de Sousa, J. P. (2014). The airport business in a competitive environment. Procedia-Social and Behavioral Sciences, 111, 947-954.
Rodan, G. (2016). The political economy of Singapore’s industrialization: national state and international capital. Springer.
Ryerson, M. S., & Kim, H. (2013). Integrating airline operational practices into passenger airline hub definition. Journal of Transport Geography, 31, 84-93.
Teo, P., & Chang, T. C. (2012). Singapore: tourism development in. Tourism in south and southeast Asia, 117.
Tremewan, C. (2016). The political economy of social control in Singapore. Springer.
Tsui, W. H. K., Balli, H. O., Gilbey, A., & Gow, H. (2014). Operational efficiency of Asia–Pacific airports. Journal of Air Transport Management, 40, 16-24.
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