FANDOM


Singapore is a highly developed trade-oriented market economy.[1][2] Singapore's economy has been ranked as the most open in the world,[3] least corrupt,[4] most pro-business,[5] with low tax rates (14.2% of Gross Domestic Product, GDP)[6] and has the highest per-capita GDP in the world; in terms of Purchasing Power Parity (PPP). Singapore's sovereign wealth fund, Temasek Holdings, holds majority stakes in several of the nation's largest companies, such as Singapore Airlines, SingTel, ST Engineering and MediaCorp. The economy of Singapore is a major Foreign Direct Investment(FDI) outflow financier in the world. Singapore has also benefited from the inward flow of FDI from global investors and institutions due to her highly attractive investment climate and a stable political environment.[7]

Exports, particularly in electronics, chemicals and services including the posture that Singapore is the regional hub for wealth management[8][9][10] provide the main source of revenue for the economy, which allows it to purchase natural resources and raw goods which she lacks. Moreover, water is scarce in Singapore[11] therefore water is defined as a precious resource in Singapore along with the scarcity of land to be treated with land fill of Pulau Semakau. Singapore has limited arable land[12] that Singapore has to rely on the agrotechnology park[13] for agricultural production and consumption. Human Resource is another vital issue for the health of Singaporean economy.[14]

Singapore could thus be said to rely on an extended concept of intermediary trade to Entrepôt trade, by purchasing raw goods and refining them for re-export, such as in the wafer fabrication industry and oil refining. Singapore also has a strategic port which makes it more competitive than many of its neighbours in carrying out such entrepot activities. Singapore has the highest trade to GDP ratio in the world, averaging around 400% during 2008-11.[15] The Port of Singapore is the second-busiest in the world by cargo tonnage. In addition, Singapore's port infrastructure and skilled workforce, which is due to the success of the country's education policy in producing skilled workers, is also fundamental in this aspect as they provide easier access to markets for both importing and exporting, and also provide the skill(s) needed to refine imports into exports.

Singapore's government promotes high levels of savings and investment through policies such as the Central Provident Fund, which is used to fund its citizen's healthcare and retirement needs. Singapore's savings rates have remained among the highest in the world since the 1970s.[16] Most companies in Singapore are registered as private limited-liability companies (commonly known as "private limited companies"). A private limited company in Singapore is a separate legal entity, and shareholders are not liable for the company's debts beyond the amount of share capital they have contributed.

To preserve its international standing and further its economic prosperity in the 21st century, Singapore has taken measures to promote innovation, encourage entrepreneurship, re-train her workforce, and even attract foreign talents. These measures aim to boost Singapore's productivity, so that Singapore remains competitive and ready for the challenges of an information-driven global economy.

Economic historyEdit

This is a chart of trend of gross domestic product of Singapore at market prices estimated by the International Monetary Fund.

Year Gross Domestic Product
($ millions)
US Dollar Exchange Nominal Per Capita GDP
(as % of USA)
PPP Per Capita GDP
(as % of USA)
1980 25,117 2.14 Singapore Dollars 39.65 55.00
1985 39,036 2.20 Singapore Dollars 36.63 63.41
1990 66,778 1.81 Singapore Dollars 52.09 74.76
1995 119,470 1.41 Singapore Dollars 86.14 90.60
2000 159,840 1.72 Singapore Dollars 66.19 91.48
2005 194,360 1.64 Singapore Dollars 67.54 103.03
2007 224,412 1.42 Singapore Dollars 74.61 107.92
2008 235,632 1.37 Singapore Dollars 73.71 107.27
2009 268,900 1.50 Singapore Dollars 78.53 108.33
2010 309,400 1.32 Singapore Dollars 82.13 119.54
2011 270,020 1.29 Singapore Dollars - -
2013 - 1.25 Singapore Dollars - -

Upon separation from Malaysia in 1965, Singapore faced a small domestic market, and high levels of unemployment and poverty.[16] 70 percent of Singapore’s households lived in badly overcrowded conditions, and a third of its people squatted in slums on the city fringes. Unemployment averaged 14 percent, GDP per capita was US$516, and half of the population was illiterate.[17][18]

In response, the Singapore government established the Economic Development Board to spearhead an investment drive, and make Singapore an attractive destination for foreign investment.[18] FDI inflows increased greatly over the following decades, and by 2001 foreign companies accounted for 75% of manufactured output and 85% of manufactured exports.[16] Meanwhile, Singapore's savings and investment rates rose among the highest levels in the world, while household consumption and wage shares of GDP fell among the lowest.[16][19][20][21]

As a result of this investment drive, Singapore's capital stock increased 33 times by 1992, a tenfold increase in the capital-labor ratio.[22] Living standards steadily rose, with more families moving from a lower-income status to middle-income security with increased household incomes. During a National Day Rally speech in 1987, Lee Kuan-Yew claimed that (based on the home ownership criterion) 80% of Singaporeans could now be considered to be members of the middle-class. However, much unlike the economic policies of Greece and the rest of Europe, Singapore followed a policy of individualizing the social safety net. This lead to higher than average savings rate and a very sustainable economy on the long run. Without a burdensome welfare state or its likeliness, Singapore has developed a very self-reliant and skilled workforce well versed for a global economy.[23]

Singapore's economic strategy produced real growth averaging 8.0% from 1960 to 1999. The economy picked up in 1999 after the regional financial crisis, with a growth rate of 5.4%, followed by 9.9% for 2000. However, the economic slowdown in the United States, Japan and the European Union, as well as the worldwide electronics slump, had reduced the estimated economic growth in 2001 to a negative 2.0%.

The economy expanded by 2.2% the following year, and by 1.1% in 2003 when Singapore was affected by the SARS outbreak. Subsequently, a major turnaround occurred in 2004 allowed it to make a significant recovery of 8.3% growth in Singapore, although the actual growth fell short of the target growth for the year more than half with only 2.5%. In 2005, economic growth was 6.4%; and in 2006, 7.9%.

As of 8 June 2013, Singapore's unemployment rate is around 1.9% and the country's economy has a lowered growth rate, with a rate of 1.8% on a quarter-by-quarter basis—compared to 14.8% in 2010.Template:Citation needed

SectorsEdit

Manufacturing and financial business services accounted for 26% and 22%, respectively, of Singapore's gross domestic product in 2000. The electronics industry leads Singapore's manufacturing sector, accounting for 48% of total industrial output, but the government also is prioritising development of the chemicals and biotechnology industries.Template:Citation needed

To maintain its competitive position despite rising wages, the government seeks to promote higher value-added activities in the manufacturing and services sectors. It also has opened, or is in the process of opening, the financial services, telecommunications, and power generation and retailing sectors up to foreign service providers and greater competition. The government has also attempted some measures including wage restraint measures and release of unused buildings in an effort to control rising commercial rents with the view to lowering the cost of doing business in Singapore when central business district office rents tripled in 2006.

Banking Edit

Template:See also Singapore is considered a global financial hub, with Singapore banks offering world-class corporate bank account facilities. These include multiple currencies, internet banking, telephone banking, checking accounts, savings accounts, debit and credit cards, fixed term deposits and wealth management services.[24] According to the Human Rights Watch, due to its role as a financial hub for the region, Singapore has continually been criticized for reportedly hosting bank accounts containing ill-gotten gains of corrupt leaders and their associates, including billions of dollars of Burma’s state gas revenues hidden from national accounts.[25]

BiotechnologyEdit

Singapore is aggressively promoting and developing its biotechnology industry. Hundred of millions of dollars were invested into the sector to build up infrastructure, fund research and development and to recruit top international scientists to Singapore. Leading drug makers, such as GlaxoSmithKline (GSK), Pfizer and Merck & Co., have set up plants in Singapore. On 8 June 2006, GSK announced that it is investing another S$300 million to build another plant to produce pediatric vaccines, its first such facility in Asia.[26] Pharmaceuticals now account for more than 8% of the country's manufacturing production.[27]

Energy and infrastructureEdit

Singapore is the pricing centre and leading oil trading hub in Asia. The oil industry makes up 5 per cent of Singapore's GDP, with Singapore being one of the top three export refining centres in the world. In 2007 it exported 68.1 million tonnes of oil. The oil industry has led to the promotion of the chemical industry as well as oil and gas equipment manufacturing.[28] Singapore has 70 per cent of the world market for both jack-up rigs and for the conversion of Floating Production Storage Offloading units. It has 20 per cent of the world market for ship repair, and in 2008 the marine and offshore industry employed almost 70,000 workers.[29]

Trade, investment and aidEdit

Template:Update

File:2006Singaporean exports.PNG
File:Singapore Export Treemap.png

Singapore's total trade in 2000 amounted to S$373 billion, an increase of 21% from 1999. Despite its small size, Singapore is currently the fifteenth-largest trading partner of the United States.[30] In 2000, Singapore's imports totaled $135 billion, and exports totaled $138 billion. Malaysia was Singapore's main import source, as well as its largest export market, absorbing 18% of Singapore's exports, with the United States close behind.

Re-exports accounted for 43% of Singapore's total sales to other countries in 2000. Singapore's principal exports are petroleum products, food/beverages, chemicals, textile/garments, electronic components, telecommunication apparatus, and transport equipment. Singapore's main imports are aircraft, crude oil and petroleum products, electronic components, radio and television receivers/parts, motor vehicles, chemicals, food/beverages, iron/steel, and textile yarns/fabrics.

Trade in Singapore has benefited from the extensive network of trade agreements Singapore has passed. According to Healy Consultants, Singapore has free trade access to the entirety of the ASEAN network, with import duty reduced when dealing with Indonesia, Malaysia, the Philippines, Thailand, Brunei, Burma, Cambodia, Laos and Vietnam.

The Singapore Economic Development Board (EDB) continues to attract investment funds on a large-scale for the country despite the city's relatively high-cost operating environment. The U.S. leads in foreign investment, accounting for 40% of new commitments to the manufacturing sector in 2000. As of 1999, cumulative investment for manufacturing and services by American companies in Singapore reached approximately $20 billion (total assets). The bulk of U.S. investment is in electronics manufacturing, oil refining and storage, and the chemical industry. More than 1,500 U.S. firms operate in Singapore.

Singapore's largely corruption-free government, skilled workforce, and advanced and efficient infrastructure have attracted investments from more than 3,000 multinational corporations (MNCs) from the United States, Japan, and Europe. Foreign firms are found in almost all sectors of the economy. MNCs account for more than two thirds of manufacturing output and direct export sales, although certain services sectors remain dominated by government-linked corporations.

The government also has encouraged firms to invest outside Singapore, with the country's total direct investments abroad reaching $39 billion by the end of 1998. The People's Republic of China was the top destination, accounting for 14% of total overseas investments, followed by Malaysia (10%), Hong Kong (8.9%), Indonesia (8.0%) and U.S. (4.0%). The rapidly growing economy of India, especially the high technology sector, is becoming an expanding source of foreign investment for Singapore. The United States provides no bilateral aid to Singapore, but the U.S. appears keen to improve bilateral trade and signed the U.S.-Singapore Free Trade Agreement. Singapore corporate tax is 17 per cent.Template:Citation needed

YearTotal tradeImportsExports% Change
2000$273$135$13821%
2001   -9.4%
2002$432  1.5%
2003$516$237$2799.6%
2004$629$293$33621.9%
2005$716$333$38314%
2006$810$379$43113.2%

All figures in billions of Singapore dollars.

International trade agreementsEdit

EconomyAgreementAbbreviationConcludedSignedEffectiveLegal text
New ZealandAgreement between New Zealand and Singapore on a Closer Economic PartnershipANZSCEP18 August 200014 November 20001 January 2001[1]
European Free Trade AssociationAgreement between the EFTA States and SingaporeEFTA-Singapore FTA11 April 200226 June 20021 January 2003[2]
JapanAgreement between Japan and the Republic of Singapore for a New-Age Economic PartnershipJSEPAOctober 200113 Ja [3]
United StatesUnited States-Singapore Free Trade AgreementUSSFTA19 November 20026 May 20031 January 2004[4]
JordanSingapore Jordan Free Trade AgreementSJFTA29 April 200416 May 2004 [5]
BruneiTrans-Pacific Strategic Economic Partnership AgreementTrans-Pacific SEP August 20051 January 2006[6]
Chile18 July 2005
New Zealand18 July 2005
IndiaIndia - Singapore Comprehensive Economic Cooperation AgreementIndia-Singapore CECANovember 200429 June 20051 August 2005[7]
KoreaKorea-Singapore Free Trade AgreementKSFTA28 November 20044 August 2005End 2005[8]
PeruPeru-Singapore Free Trade AgreementPesFTASeptember 200729 May 2008Early 2009

Singapore workforceEdit

In 2000, Singapore had a workforce of about 2.2 million. The country has the largest proficiency of English language speakers in Asia, making it an attractive place for multinational corporations.[31] The National Trades Union Congress (NTUC), the sole trade union federation which has a symbiotic relationship with the ruling party, comprises almost 99% of total organized labour. Government policy and pro-activity rather than labour legislation controls general labour and trade union matters.

The Employment Act offers little protection to white-collar workers due to an income threshold. The Industrial Arbitration Court handles labour-management disputes that cannot be resolved informally through the Ministry of Manpower. The Singapore Government has stressed the importance of cooperation between unions, management and government (tripartism), as well as the early resolution of disputes. There has been only one strike in the past 15 years.

Singapore has enjoyed virtually full employment for long periods of time. Amid an economic slump, the unemployment rate rose to 4.0% by the end of 2001, from 2.4% early in the year. Unemployment has since declined and as of 2012 the unemployment rate stands at 1.9%.[32]Template:Dead link

While the Singapore government has taken a stance against minimum wage and unemployment benefit schemes, in 2007 the government introduced a Workfare Income Supplement (WIS) scheme to supplement wages of low-skilled workers.[33]

The Singapore Government and the NTUC have tried a range of programs to increase lagging productivity and boost the labour force participation rates of women and older workers. However, labour shortages persist in the service sector and in many low-skilled positions in the construction and electronics industries. Foreign workers help make up this shortfall. In 2000, there were about 600,000 foreign workers in Singapore, constituting 27% of the total work force. As a result, wages are relatively suppressed or do not rise for all workers. In order to have some controls, the government imposes a foreign worker levy payable by employers for low end workers like domestic help and construction workers. In 2012, the Ministry of Trade and Industry (MTI) reported that Singapore should continue to fine-tune the calibration of its inflow of foreigners as the country continues to face an ageing population and a shrinking workforce. Singapore Parliament accepted the recommendations by its Economic Strategies Committee (ESC) for the optimal ratio of the level of immigration and foreign manpower for both high and low skilled workers.[34] The Government recognises that the current overall foreign workforce should complement the local resident workforce and not replace the Singaporean Core concept, and helps companies greatly as they raise productivity through business restructuring and workforce retraining; raise resident labour force participation rate.[35][36]

Public financeEdit

Government spending in Singapore has risen since the start of the global financial crisis, from around 15% of GDP in 2008 to 17% in 2012. The government's total expenditure as a percentage of GDP ranks among the lowest internationally and allows for a competitive tax regime.[37]Template:Dead link[38] The government has no foreign debt and consistent budget surpluses. Singapore government debt is issued for investment purposes, and not for fiscal needs.[39]

Personal income taxes in Singapore range from 0% to 20% for incomes above S$320,000. There are no capital gains or inheritance taxes in Singapore.[40][41] Singapore's corporate tax rate is 17% with exemptions and incentives for smaller businesses. Singapore has a single-tier corporate income tax system, which means there is no double-taxation for shareholders.[42]

Singapore introduced Goods and Services Tax (GST) with an initial rate of 3% on 1 April 1994, increasing government's revenue by S$1.6 billion (US$1b, €800m) and establishing government finances.[43] The taxable GST was increased to 4% in 2003, to 5% in 2004, and to 7% in 2007.[44]Template:Dead link

The Singapore government owns two investment companies, the Government of Singapore Investment Corporation and smaller Temasek Holdings, which act as the nation's sovereign wealth funds. Both operate as commercial investment holding companies independently of the Singapore government, but Prime Minister Lee Hsien Loong and his wife Ho Ching serve as Chairman and CEO of these corporations respectively.[45][46][47] Temasek Holdings holds around S$60 billion of assets in Singapore, holding majority stakes in several of the nation's largest companies, such as Singapore Airlines, SingTel, ST Engineering and MediaCorp.

In 2012, an economics professor, Dr.(PhD) Christopher Balding, based in China began scrutinizing and criticizing the Government of Singapore Investment Corporation and Temasek Holdings on its alleged accounting and auditing of public finances.[48][49][50]

In April 2013, the country was recognisedTemplate:By whom as an increasingly popular tax haven for the wealthy due to the low tax rate on personal income, a full tax exemption on income that is generated outside of Singapore and 69 double taxation treaties[24] that can minimize both withholding tax and capital gains tax. Australian millionaire retailer Brett Blundy, with an estimated personal wealth worth AU$835 million, and multi-billionaire Facebook co-founder Eduardo Saverin are two examples of wealthy individuals who have settled in Singapore (Blundy in 2013 and Saverin in 2012). Additionally, Australian mining magnate Gina Rinehart owns property in Singapore[51] and American investor Jim Rogers moved to Singapore in 2007—Rogers has identified the 21st century as an era in which Asia will dominate and wishes for his two daughters to learn Mandarin as a key outcome of the relocation.[52][53] Chinese Media TV celebrities Jet Li and Gong Li have also taken up naturalized Singapore citizenship.[54][55]

Monetary policyEdit

The Monetary Authority of Singapore is Singapore's central bank and financial regulatory authority. It administers the various statutes pertaining to money, banking, insurance, securities and the financial sector in general, as well as currency issuance. The MAS has been given powers to act as a banker to and financial agent of the Government. It has also been entrusted to promote monetary stability, and credit and exchange policies conducive to the growth of the economy.

Unlike many other central banks such as Federal Reserve System or Bank of England, MAS does not regulate the monetary system via interest rates to influence the liquidity in the system. Instead, it chooses to do it via the foreign exchange mechanism. It does so by intervening in the SGD market.[56]

Facts & figuresEdit

Percentage of economic growth: 3.7% (2013)[57]

Industrial production growth rate: 6.8% (2007 est.)

Electricity - production: 41.137.7 billion kWh (2007)

Electricity - production by source:
fossil fuel: 100%
hydro: 0%
nuclear: 0%
other: 0% (1998)

Electricity - consumption: 37.420.3 billion kWh (2007)

Electricity - exports: 0 kWh (2007)

Electricity - imports: 0 kWh (2007)

Agriculture - products: rubber, copra, fruit, vegetables; poultry, eggs, fish, orchids, ornamental fish

Currency: 1 Singapore dollar (S$ or SGD) = 100 cents

Exchange rates:

Year Singapore Dollars per US$1
1981 2.0530
1985 2.1213
1990 1.7275
1995 1.4148
2000 1.7361
2005 1.6738
2011 1.2573
2012 1.2498
2013 1.2513

International rankingsEdit

Main article: International rankings of Singapore

See alsoEdit

Template:Portal

ReferencesEdit

  1. Script error
  2. Script error
  3. Script error
  4. Script error
  5. Script error
  6. Script error
  7. http://www.unctad-docs.org/files/UNCTAD-WIR2012-Chapter-I-en.pdf
  8. Template:Cite journal
  9. Script error
  10. Script error
  11. Script error
  12. Script error
  13. Script error
  14. Script error
  15. Script error
  16. 16.0 16.1 16.2 16.3 Template:Cite journal
  17. Script error
  18. 18.0 18.1 http://www.vcc.columbia.edu/files/vale/documents/Singapore_IFDI_-_FINAL_-_31_May_2012.pdf
  19. Template:Cite book
  20. http://www.treasury.gov.au/PublicationsAndMedia/Publications/2012/Economic-Roundup-Issue-4/HTML/article3
  21. http://www.straitstimes.com/microsites/parliament/story/wage-share-gdp-has-risen-over-the-decades-minister-trade-and-industry-20
  22. Template:Cite book
  23. Driven by Growth: Political Change in the Asia-Pacific Region edited by James W. Morley
  24. 24.0 24.1 Script error
  25. Script error
  26. Script error
  27. Script error
  28. Script error
  29. Script error
  30. Script error
  31. Singapore Company Registration Healy Consultants Retrieved 3 September 2013
  32. http://www.channelnewsasia.com/stories/singaporelocalnews/view/1234476/1/.htmlTemplate:Dead link
  33. Script error
  34. http://www.edb.gov.sg
  35. http://www.nptd.gov.sg
  36. http://www.wda.gov.sg/
  37. http://www.channelnewsasia.com/stories/singaporelocalnews/view/384172/1/.htmlTemplate:Dead link
  38. Script error
  39. Script error
  40. Script error
  41. Script error
  42. Script error
  43. Script error
  44. Script errorTemplate:Dead link
  45. http://www.gic.com.sg/faqs#38
  46. http://www.temasek.com.sg/abouttemasek/faqs
  47. http://www.channelnewsasia.com/news/specialreports/parliament/news/govt-s-role-relating-to-t/200876.html
  48. http://www.baldingsworld.com/
  49. Dr. Christopher Balding, a professor of business and economics at the HSBC Business School at the Peking University Graduate School. An expert in sovereign wealth funds, he has published in such leading journals as the Review of International Economics, the Journal of Public Economic Theory, and the International Finance Review on such diverse topics as CDS pricing, the WTO, and the economics of adoption and abortion. His work as been cited by a variety of media outlets including the Wall Street Journal and the Financial Times. Prof Balding received his PhD from the University of California, Irvine and worked in private equity prior to entering academia.
  50. http://www.sbsgroup.com.sg/singapore-accounting-services/
  51. Script error
  52. Script error
  53. Script error
  54. Jet Li
  55. Gong Li
  56. Script error
  57. Script error
  58. Freedom in the World (report)
  59. Freedom of the Press (report)
  60. Press Freedom Index
  61. Democracy Index
  62. Corruption Perceptions Index
  63. Privacy International
  64. List of countries by GDP (nominal) per capita
  65. List of countries by GDP (PPP) per capita
  66. List of countries by foreign exchange reserves
  67. List of countries by income equality
  68. Ease of Doing Business Index
  69. Global Enabling Trade Report
  70. Global Competitiveness Report
  71. Human Development Index
  72. 72.0 72.1 Quality-of-life index
  73. List of countries and dependencies by population density
  74. List of countries by immigrant population
  75. List of countries by carbon dioxide emissions per capita
  76. List of countries by number of troops
  77. List of countries and territories by fertility rate


External linksEdit

Template:Library resources box Template:Commons category

Template:Singapore topics Template:APEC Template:Asia in topic [1]


Cite error: <ref> tags exist, but no <references/> tag was found
Community content is available under CC-BY-SA unless otherwise noted.