The Effects Of Institutionalised Inefficency

Essay by PaperNerd ContributorUniversity, Master's February 2002

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I will elaborate on how competition helps Singapore and how the lack of competition has lead to the downfall of the communist governments.

Now I would like to elaborate more on the effects of competition on a country's economy. Let us take a look at a communist country's economic system first. It is a centralised system where the government decides where resources are allocated, and what is produced. This results in institutionalised inefficiency where everyone is assured of lifetime employment and there is no motivation to achieving beyond what is excepted. As a result, products of low quality are produced. In this sort of economy there is no competition and the economy fails miserably. One example is the USSR, which used to be communist and now it's economy is in tatters. Even China, which is a communist country, saw the need for a change in centralised planning as there is little competition in order to achieve higher productivity and greater profits and now allows companies to compete against each other.

Japan joined the G7 in 1997. How had a country which economy was focused on war in the 1940's managed to transform itself to a world leading economy in 30 years? This was through competition, as Japan was competing furiously with the USA, as it wanted to have a strong economy. The Japanese economy saw that it needed to change to a more competitive economy, and we see that this was highly successful. As we can see today, Japanese cars and electrical products are known throughout the world and their economy is second only to the USA.

Singapore is also adopting changes to be more competitive. The Monetary Authority of Singapore (MSA) is implementing changes to the banking system. It is no longer protecting the banks but exposing them to competition. This will improve the standard of banking here tremendously as banks learn to compete on their own. We see that companies such as Singapore Airlines, Creative, Singtel are competing against the region's and world's best companies. This has resulted in these companies being recognised worldwide and competing with the world's best companies to achieve excellence in costumer service and product quality.

The PSA is facing more competition but this has in fact spurred workers to work harder. As we see that the workers forgo their Chinese New Year holidays to put extra hours to compete against the regional ports. Also, competition has made the PSA more focused on achieving excellence in customer service. We see that even in commerce, competition is keeping businesses on their edge and making sure they excel.

Obviously, competition is far superior in cooperation in achieving excellence, whether in school, technology or in the economy. And now, only one team has proven itself superior than it's opponent in this competition, and that is team Yuhua. Without a shadow of a doubt, this motion must stand.