Singapore’s Economy in Brief

 

Singapore’s economy has been tested and survived all the hardships. Singapore’s economy remained relatively stable while most of its neighbouring economies were sliding during the 1997 financial crisis. The country’s economy also emerged as one of the world’s fastest growing economies in 2010 after braving the 2008 global financial crisis while the developed economies of US and Europe were still struggling with the aftermath of the crisis. Despite of no natural resources and a very small land area, Singapore’s economy has flourished. The economy if driven by:

  • Exports in electronics manufacturing and machinery
  • Financial services
  • Tourism
  • The world’s largest cargo seaport

 

Key Industries

  1. The major industries include :
    1. Manufacturing Sector
      1. Electronics (semiconductors, precision engineering etc.)
      2. Pharmaceuticals and bio medical sector
  • Chemicals
  1. Construction
  2. Ship building
  1. Services Sector
    1. Wholesale and retail
    2. Financial and business services
  • Tourism

The manufacturing sector contributes anywhere between 20-30% to Singapore’s GDP annually. The key industries under the service sector are expected to witness strong growth.

 

  1. The financial services industry of Singapore offers a business-supportive environment and if politically stable. Every major bank and investment firm from the US and Europe operating in Asia has been headquartered in Singapore.
  2. Other emerging industries making significant contributions to Singapore’s economy includes casinos, healthcare, education, infocomm & media.

 

Natural Resources

Singapore, located at the southernmost tip of the Malaysian peninsula, if devoid of natural resources. Though Singapore operates the third largest oil refinery in the world, the raw materials come from overseas, specifically Saudi Arabia.

The people of the country are its true natural resource who have been an essential reason for the country’s economic success. Foreign and local have had access to a pool of an educated workforce & a burgeoning consumer market.

 

Infrastructure

  • Singapore has a well-developed infrastructure in place due to it being a commercial and military seaport during the colonial era. The postcolonial also spared no effort to improve and expand the country’s transport, communications, industrial, and housing systems.
  • The transport system is efficient, safe, and punctual. Singapore is served by:4
    • Land
      • 3,297 kilometres of paved highways
      • 2 kilometres of rail (mass rapid transit and light rail combined)
      • Island -wide bus and taxi operations.
    • Air
      • Changi International Airport connects to 182 cities in 57 countries with more than 4,000 weekly flights transporting passengers and cargo worldwide.
    • Sea
      • Port of Singapore (PSA Corporation) has over 200 shipping lines and access to some 600 ports in 123 countries. It has the capacity of docking 1,000 ships at one time which makes it the busiest container port in the world.
    • The government’s consistent efforts to drive the internet usage has led to 99% of the population being online. There are about 1,225 mobile phone subscribers per 1,000 of the population. A free national wifi service called Wireless@SG is available in public places like coffee chains, fast food restaurants and the stretch of Orchard Road and Changi Airport.
    • A choice of world-class high-rise and low-rise offices in the Central Business District and other parts of town are available. The Jurong Town Corporation (JTC) has over 7,000 hectares of industrial land and 4 million square metres of built industrial space strategically located to suit any business type.

 

Gross Domestic Product

Singapore’s gross domestic product was $326.8 billion in 2011 which accounted as a 4.9% growth than before, about $260 billion based on average exchange rates or $252 billion based on year-end currency rates.

 

Public Debt

The Singapore government has maintained zero foreign debt since 1995.

A report released by the Ministry of Finance stated the total outstanding government borrowing as $312 billion as of December 2010. This comprised of treasury bills, bonds, and Singapore government securities. Despite the high figure, Singapore government has a strong balance sheet and has assets that outweigh the liabilities. The government has the ability to meet that debt throughout its strong asset protection, robust economic growth, and prudent microeconomic policies.

 

Government Revenue, Revenue Sources and Surplus

Singapore government earns the bulk of its revenue from taxes like income, property, excise duties, customs duties, and GST among others. Other revenue sources are

  • fees and charges collected from licenses and permit,
  • rental of residential, business, local and overseas quarters,
  • Fines and forfeitures
  • Capital receipts from sale of capital goods such as land

Tax revenue for the financial year 2010-11 accounts for 91% of the government operating revenue. The overall budget surplus for the financial year 2011 is estimated to be about $2.3 billion or 0.7% of GDP.

 

Currency Strength

The Singapore dollar has been consistently appreciating against major currencies. Singapore’s economy has been on a healthy growth plan. The country was ranked as third wealthiest nation in the world.

 

Trade

  • Export
    • Singapore’s main export industries
      • Machinery and equipment
      • Electronics
      • Consumer goods
      • Pharmaceuticals
      • Chemicals
      • Mineral fuels
    • Singapore’s primary export partners
      • Hong Kong
      • Malaysia
      • The Unites States
      • Indonesia
      • China
      • Japan
    • Import
      • Singapore’s main import industries
        • Machinery and equipment
        • Mineral fuels
        • Chemicals
        • Foodstuffs
        • Consumer goods
      • Singapore’s primary import partners
        • The United States
        • Malaysia
        • China
        • Japan
        • Indonesia
        • South Korea

Singapore is the world’s 14th largest exporter and 15th largest importer.