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Singapore Economy

Singapore is an amalgamation of 63 islands, and is the smallest country in Southeast Asia. Once a British trading colony, Singapore became a part of the Malaysian Federation in 1963. It became an independent nation two years later. Despite the small geographic size of the nation, Singapore economy is one of most prosperous in the world, with a strong international trade link. Singapore economy is a capitalist mixed economy, with minimal government intervention in the market. 

Singapore Economy: Snapshot

According to the World Bank “Doing Business 2010 Report,” Singapore economy is considered to be the easiest to do business in. In fact, Singapore has been awarded the most competitive country in Asia. Some favorable findings about Singapore stated in the report:

  • Ranked No.1 for having the most open and liberal economy for international trade
  • Ranked No.2 as the economy with the best investment potential
  • Ranked #1 in Asia and #4 in the world for having low levels of corruption in the economy

 

The following key indicators of Singapore economy, according to CIA World Factsheet, are reflective of these favorable recognitions:

 

Economic Indicator

 
Value

 

GDP (Official Exchange Rate)

$163.1 billion

CPI

110.4

Industrial Production Index

104.9

Total Exports

$268.9 billion

Total Imports

$245 billion

 

Singapore’s GDP (Purchasing Power Parity) growth over the past few years are illustrated below:

 

Singapore’s GDP (Purchasing Power Parity) 2005-2009

 

 

 

Singapore Economy and Employment Scenario

 

In a further bid to boost Singapore's economic prospects, the government approved the creation of two integrated resorts with casino licenses, the first to be granted in the republic. The first license was awarded to Marina Bay Sands, a more business-focused integrated resort (IR) with extensive convention facilities. The second license was awarded to Resorts World at Sentosa, a family-oriented IR. The Marina Bay Sands IR will draw over $5 billion in investment and will open in 2009, while Resorts World at Sentosa will open in 2011. The IRs are expected to generate 35,000 jobs.

The awarding of casino licenses is a direct response to the growth of the gambling industry in Asia. In 2007, Macau overtook Las Vegas as the biggest casino center in the world, and casino revenues will continue to soar as ever more wealth is created in Asia, a continent with a long history of gambling.

A number of other events will boost the Singapore economy. In September 2007, Singapore will host the first Formula 1 night race, and in 2010 it will host the world's first Youth Olympic Games.

A number of major redevelopment initiatives are also boosting the construction, property, tourism, leisure and retail industries, including projects to refurbish Orchard Road and the Singapore River regions, the extension of the Biopolis, and the development of the Sports Hub.

The organized labor sector in the Singapore economy is largely administered by the National Trades Union Congress (NTUC). All labor management issues are primarily handled by the Singapore Ministry of Labor. The philosophy of ‘tripartism’ or cooperation between labor union, management and government is stressed on by the Singapore Government.

As of 2009, the country had a net labor force of 3.03 million. Singapore has enjoyed nearly full employment levels for the past decade, although the unemployment rate peaked at 4.6% in 2003, amid slow economic growth. The unemployment status again touched 3.3% in mid-2009 due to the global economic meltdown. The rate came down to 3% by the end of 2009.

Foreign Investment in Singapore Economy

Post independence from Malaysia, Singapore was left with a small domestic market and lack of resources. The nation has, nonetheless, become a hub of foreign investment because of its strategic location and favorable government policies. The Singapore government enforces a pro-foreign investment and export-oriented economic policy, helping the nation attract large-scale foreign investments despite its relatively costly operating environment. The US is the leading foreign investor in Singapore, accounting for about $106.5 billion worth assets in the manufacturing and services sectors.