Singapore Market

The Singapore Market economy is characterized by an open business environment and is a relatively corruption-free and transparent economy exhibiting reasonable degrees of price stability. Singapore market is the second freest economy in the world after Hong Kong. According to the Index of Economic Freedom, Singapore Economy is 85.7% free with Labour Freedom accorded the highest status with 99.3% followed closely by Business Freedom at 94.6% and Monetary Freedom at 89.5%. Freedom from Government and Investment Freedom is also at quite high levels at 86.2% and 80% respectively. Since gaining independence in 1965, the country has experienced a dramatic rise in its standards of living and presently holds the 18 th rank in terms of per-capita Gross Domestic Product (GDP) for all countries of the world. GDP measured by Purchasing Power Parity (PPP) stood at S $138.6 billion and GDP per-capita at S $ 30, 900 according to 2006 estimates. Singapore has grown to a modern economy based heavily on electronics and manufacturing and the island-state has also achieved the Asian Tiger status (along with South Korea, Hong Kong and Taiwan) due to heavy and intense open-capitalist industrialization in the four decades since its independence. Manufacturing thus takes up the largest portion of the economy followed by businesses and financial services. Measuring in terms of quality of life, the Economist (2005) ranked Singapore as the highest in Asia and as the 11 th highest in the world.

The key Singapore Markets can be stated as follows :

•  Export Markets: Exports providing the main source of revenue for the economy are particularly dependent on electronic goods, machinery and equipment, chemical products and services. Singapore is said to be engaged in entrepot trade, i.e. purchasing raw goods and refining them for re-export which is evident in the fields of water fabrication and oil refining. Two basic factors contributing to the surge in this sort of trade are said to be the port facility of Singapore which due to its strategic location makes it easier to carry out entrepot activities and its skilled labour force. The port of Singapore is the busiest in the world surpassing the ports of Hong Kong and Shanghai. The main export partners Malaysia, Indonesia, Hong Kong, China, Japan, Thailand and Australia. According to figures for 2005, export was the highest to Malaysia at 14.7%.

•  Import Markets: Imports purchased are mainly natural resources such as mineral fuels and raw materials which are scarce in the country. However, machinery and equipment form an important component of the country’s imports. Total imports according to the 2006 estimates, stood at S $ 246.1 billion. Malaysia accounted for the highest import share with 14.4%. Total trade for the Singaporean Economy amounted to S $ 716 billion for the year 2005, an increase of about 14%.

•  Money and Capital Markets: Singapore is the world’s fourth-largest trading centre for foreign exchange after London, New York City and Tokyo. The Monetary Authority of Singapore (MAS) is the central bank of Singapore supervising the banking, insurance, securities and futures sectors. The stock exchange in Singapore is called the Singapore Exchange Limited or the SGX and was formed on December 1st, 1999 following the merger of the Stock Exchange of Singapore (SES) and the Singapore International Monetary Exchange (SIMEX) and has now developed into the first demutualised and integrated securities and derivatives market in the Asia-Pacific region. Its key indices are SiMSCI, MSCI Taiwan and FTSE Xinhua China A50.

•  Labour Market: Unemployment for the Singapore economy stood at 3.1% according to 2006 estimates which is low by international standards. Singapore economy enjoyed a virtual full employment for long periods of time and an economic slump, the unemployment rate rose to 4% at the end of 2001 from about 2.4% at the beginning of the year. The National Trades Union Congress (NTUC) is the sole trade union federation in the country and is the umbrella organization for about 99% of the formal labour. The efforts by the Singapore government and the NTUC to increase the labour productivity have not been fully successful as shortages persist in the service sector and in positions in the electronics and construction industries.