Singapore’s far-sighted economic policies have helped to transform the Singapore economy into an Asian powerhouse. Exciting developments such as the integrated resorts will continue to change the face of the Republic.
The Singapore economy is an example of a vibrant free-market economy that is developing at a rapid pace. The per-capita income of the country is very high and it has been supported and strengthened by a corruption-free environment, an educated and motivated workforce, and well-established legal and financial business framework.
Singapore’s economy is heavily dependent on export activities. The main goods that exported from the country are high-tech products such as semiconductors and consumer electronics.
In recent years, the Singapore government has invested heavily in diversifying the economy. This has led to growth in the tourism industry, the pharmaceutical industry with a particular focus on biotechnology, financial services, education, multimedia, retail and leisure, and the medical technology industry.
With strong economic tailwinds behind it, in 2007 Singapore added thousands of millionaires to its already rich populace. Property prices rose faster than in any other country in the world, with over 29% increases in transacted property sale prices.
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.
A snapshot of the Singapore economy in 2007:
GDP-purchasing power parity
US $222.7 billion
GDP-real growth rate
7.5%
GDP per-capita (purchasing power parity)
US $48,900
Investment (gross fixed)
24.4% of the GDP
Industrial Production Growth Rate
5.6%
Exports
US $450.6 billion
Imports
US $396 billion
Rate of Inflation
4.4%
The government of Singapore follows a particular policy to promote savings and investment in the country. Its large reserves are invested in the development of the education and technology sectors. More and more investments have also been made outside the country, through its two sovereign wealth funds, the Government Investment Corporation of Singapore (GIC) and Temasek Holdings.
The country’s geographical location is also a major contributor to its steady financial growth. It has one of the busiest seaports in the world and is used for both import and export activities. Since Singapore has an export-dependent economic policy, the port is crucial to development.
The economic strategy that is followed by the country is successful enough to provide it with steady real growth rates. During the period between 2000 and 2003, the economy of the country was hit by a global economic slump, recession in economies of the US and other European Union countries, and SARS.
After absorbing these major shocks, Singapore’s economy recovered well, and in 2007, it recorded 7.5% in real growth of its GDP. This recovery was mainly due to a sound economic strategy, a highly skilled workforce, excellent infrastructure, and a number of foreign investments. Government-linked corporations have also contributed to the development of the economy, and a major part of the services industry is regulated by these corporations.