Singapore – Economy Overview

• Capital: Singapore City
• Area: 707.1 km²
• Population: 4,839,400
• GDP (PPP): US$228.303 billion
• GDP (Nominal): US$161.349 billion
• Currency: Singapore Dollar
• Time Zone: GMT+8

Singapore has a highly developed capitalist mixed economy. Officially government intervention in the Singapore economy is kept to a minimum; however, 60% of Singapore's GDP is accounted for by corporations controlled by such government bodies as the sovereign wealth trust Temasek. The business environment is generally open and transparent, prices are mostly stable, and the per capita GDP is one of the highest in the world. The main source of revenue in the Singapore economy comes from exports of processed and manufactured goods. Singapore itself relies heavily on imports since it does not have natural resources and raw goods. Thus it has the status of an entrepot trader - purchasing raw materials and refining them for export. This is particularly true in the oil refinement and wafer fabrication industries.

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In the 1960s Singapore's government adopted a pro-foreign investment, pro-business, export-oriented economic policy and became increasingly became openly capitalist despite still officially calling it a socialist regime. Thanks to these policies, Singapore's annual growth rate has averaged at 8% from 1960 to 1999, remaining as high as 7.9% in 2006.

Singapore has also become one of the busiest ports in the world, more so than its neighbors in Hong Kong and Shanghai, which gives it disproportionate importance in the South East Asian economy relatively to its miniscule size. The success of the country's educational policy has lead to the production of a remarkably skilled workforce, which is essential to providing easier access to both import and export markets, and supplying the needed skills for refining imports into exports.

Industry

Singapore is now looking towards a globalized future by positioning itself as South East Asia's financial and high-tech centre. Manufacturing and financial business services dominate the Singapore economy with 26% and 22% of the national GDP respectively. The manufacturing sector is lead by the electronics industry, with the government now placing priority on the development of the biotechnology and chemicals industries. Other major industries include oil drilling equipment, rubber processing, petroleum refining, processed food and beverages, offshore platform construction and ship repair.

Foreign Trade Relations

In 2000, Singapore recorded a total of $135 billion in imports and $138 billion in exports. Singapore is currently the fifteenth-largest trading partner of the United States, a remarkable figure considering its small size. To improve bilateral trade relations, the US signed the U.S.-Singapore Free Trade Agreement. Singapore's main import source and export market is Malaysia, with the United States close behind. Over 40% of Singapore's total foreign trade is accounted for by re-exports..

Investment

The Singapore government continues to encourage both foreign investment in Singapore and local investment outside of Singapore. The U.S. leads in foreign investment with 40% of commitments made to the manufacturing sector in 2000. Over 1,500 U.S. firms operate in Singapore. The country's total direct investments abroad were up to $39 billion by the end of 1998, the top destination being The People's Republic of China with 14% of total overseas investments. Nowadays, the highly developed technology sector in India is becoming an expanding attraction for foreign investment from Singapore.

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