The
worldwide electronics slump in 2001 and the outbreak of severe acute
respiratory syndrome (SARS) in 2003 dealt blows to the economy, but
growth bounced back each time, driven by world demand for electronics,
pharmaceuticals, other manufactured goods, and financial services,
particularly in the economies of its major trading partners: the United
States, the European Union, Japan, and China, as well as expanding
emerging markets such as India. The global financial crisis of 2008 and
2009 dealt a blow to Singapore's open, trade-oriented economy. Singapore
saw its worst two quarters of contraction in late 2008 and early 2009,
but quickly recovered with strong performance in later quarters. The
official growth forecast for 2010 is between 4.5% and 6.5%.
Singapore's
largely corruption-free government, skilled work force, and advanced
and efficient infrastructure have attracted investments from more than
7,000 multinational corporations from the United States, Japan, and
Europe. Also present are 1,500 companies from China and another 1,500
from India. Foreign firms are found in almost all sectors of the
economy. Multinational corporations account for more than two-thirds of
manufacturing output and direct export sales, although certain services
sectors remain dominated by government-linked companies.
Manufacturing
(including construction) and services are the twin engines of the
Singapore economy and accounted for 26% and 69.3%, respectively, of
Singapore's gross domestic product in 2009. The electronics and
chemicals (including petroleum products) industries lead Singapore's
manufacturing sector, accounting for 31.5% and 27%, respectively, of
Singapore's manufacturing output in 2009. To inject new life to the
tourism sector, the government in April 2005 approved the development of
two casinos that resulted in investments of more than U.S. $5 billion.
Las Vegas Sands' Marina Bay Sands Resort is scheduled to open in April
2010, while Genting International's Resort World Sentosa opened its
doors in February 2010.
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 to
foreign service-providers and greater competition. The government also
has pursued cost-cutting measures, including tax cuts and wage and rent
reductions, to lower the cost of doing business in Singapore. The
government is actively negotiating eight free trade agreements (FTAs)
with emerging economic partners and has already concluded 18 FTAs with
many of its key trade partners, including one with the United States
that came into force January 1, 2004. As a member of the Association of
Southeast Asian Nations (ASEAN), Singapore is part of the ASEAN Free
Trade Area (AFTA), and is signatory to ASEAN FTAs with China, Korea,
Japan, India, and a joint agreement with New Zealand and Australia.
Singapore is also a party to the Transpacific Strategic Economic
Partnership Agreement, which includes Brunei, Chile, and New Zealand.
Trade, Investment, and AidSingapore's
total trade in 2009 amounted to $513.9 billion, a dip of 11.5% from
2008. In 2009, Singapore's imports totaled $245 billion, and exports
totaled $269 billion. Malaysia was Singapore's main import source
country, as well as its second-largest export market, absorbing 11.5% of
Singapore's exports, after Hong Kong (11.6%). Other major export
markets include the United States (11.2%), China (9.7%), and Indonesia
(9.7%). Singapore was the 13th-largest trading partner of the United
States in 2009. Re-exports accounted for 48.9% of Singapore's total
sales to other countries in 2009. Singapore's principal exports are
petroleum products, food and beverages, chemicals, pharmaceuticals,
electronic components, telecommunication apparatus, and transport
equipment. Singapore's main imports are aircraft, crude oil and
petroleum products, electronic components, consumer electronics,
industrial machinery and equipment, motor vehicles, chemicals, food and
beverages, electricity generators, and iron and steel.
Singapore
continues to attract investment funds on a large scale despite its
relatively high-cost operating environment. The United States leads in
foreign investment, accounting for 63% of new commitments to the
manufacturing sector in 2008. As of 2008, the stock of investment by
U.S. companies in the manufacturing and services sectors in Singapore
reached about $106.5 billion (total assets). The bulk of U.S. investment
is in electronics manufacturing, oil refining and storage, and the
chemical industry. About 1,500 U.S. firms operate in Singapore.
The
government also has encouraged firms to invest outside Singapore, with
the country's total direct investments abroad reaching $206.5 billion by
the end of 2007. China was the top destination, accounting for 13.2% of
total overseas investments, followed by Malaysia (7.1%), Indonesia
(6.1%), United Kingdom (10.5%), Hong Kong (5.9%), Thailand (5.2%),
Australia (5.3%), and the United States (4.5%).
LaborAs of
December 2009, Singapore had a total labor force of about 2.99 million.
The National Trades Union Congress (NTUC), the sole trade union
federation, comprises almost 99% of total organized labor. Extensive
legislation covers general labor and trade union matters. The Industrial
Arbitration Court handles labor-management disputes that cannot be
resolved informally through the Ministry of Labor. The Singapore
Government has stressed the importance of cooperation between unions,
management, and government ("tripartism"), as well as the early
resolution of disputes. There have been no strikes since 1986.
Singapore
has enjoyed virtually full employment for long periods of time. Amid
slower economic growth in 2003, unemployment rose to 4.0%. As of the end
of June 2008, the unemployment rate was 2.2%. In tandem with the global
economic crisis and the economy’s contraction, unemployment as of
end-September 2009 rose to 3.4% and resident unemployment reached 5.0%.
However, the overall and resident unemployment rate dipped to 2.1% and
3.0%, respectively, in December 2009 in view of the Singapore
Government’s job saving measures and the gradually improving global
economy. Overall, some of Singapore’s unemployment is attributable to
structural changes in the economy, as low-skill manufacturing operations
have moved overseas. Since 1990, the number of foreign workers in
Singapore has increased rapidly to cope with labor shortages. Foreign
workers comprise 35% of the labor force; the great majority of these are
unskilled workers.
GDP (2009 nominal prices):
$177.1 billion.
Annual real growth rate:
8.7% (2006), 8.2% (2007), 1.4% (2008), -2% (2009)
Per capita GDP (2009):
$35,515.
Natural resources:
None.
Agriculture (under 0.5% of GDP):
Products-poultry, orchids, vegetables, fruits, ornamental fish.
Manufacturing
(18.2% of real GDP): Types-electronic and electrical products and
components, petroleum products, machinery and metal products, chemical
and pharmaceutical products, transport equipment (mainly aircraft
repairs/maintenance, shipbuilding/repair and oil rigs), food and
beverages, printing and publishing, optical and photographic equipment,
plastic products/modules, instrumentation equipment.
Trade :
Exports-$268.9 billion: petroleum products, food/beverages, chemicals,
pharmaceuticals, industrial machinery and equipment, electronic
components, telecommunication apparatus, transport equipment. Major
markets-Malaysia (11.5%), Indonesia (9.7%), Hong Kong (11.6%),
Germany/France (2.9%), China (9.7%), United States (11.2%), and Japan
(4.6%).
Imports-$245 billion: aircraft, crude oil and petroleum
products, electronic components, radio and television receivers/parts,
motor vehicles, chemicals, food/beverages, iron/steel, electricity
generators. Major suppliers-Germany/France (6.6%), Malaysia (11.6%),
United States (14.7%), China (10.5%), and Japan (7.6%).
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