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Economic Profile of Singapore Economy of Singapore can be characterized as very well advanced and flourishing, with opened and prosperous business opportunities and with stable and high economic indexes. It is an example of balanced free-market system, which is strongly export oriented and has developed industrial and service sectors. During last four decades economic rise and growth of Singapore was extraordinary, and recently the country remains leading and one of the most dynamic, developing and wealthy states in the South East Asian region, along with Hong Kong, Taiwan and South Korea. Island location and lack of natural resources determined the main outlines of economic approaches of the country. Since 1965, after gaining independence and separating from Malaysia, Singapore government follows thoroughly planned and pragmatic policy of economic expansion, based on traditional potency and development of international trade and shipping. Singapore has one of the largest and busiest ports in the world, leaving behind the ports of Rotterdam or Long Beach, with its shipping tonnage and facilities, including more than 600 shipping lines and opportunity to receive about 700 ships at the same time.
It has connections with 800 international ports around the globe. [ 7 ] The other principal strategy of the government was industrialization and expansion of export-oriented manufacturing. Despite of initially small and poor labor force market, huge lack of technologies and production experience, during last three decades industrial market has been transforming into developed and profitable economic sector, opened for foreign investments, supported with advanced modern technological opportunities and provided with strong educational basis. Recently Singapore has leading positions in producing and exporting electronics and chemicals, mineral fuels, tools and machinery, rubber products, processed food, beverages, consumer goods, etc. In 2004 industrial manufacturing growth rate in Singapore was 2. 8 %. [ 3 ] And, finally, the other strongest economical sectors are business and finance.
Singapore is famous with its numerous multi-national corporations and companies, which are being financed from the USA, Europe and Japan. Enterprises with foreign capitals cover about two thirds of the whole industrial sector of Singapore, but there are some certain spheres, which remain under control of domestic or governmental investments. [ 2 ] The country is connected to international financial and banking system and fully enjoys modern financial facilities and opportunities. There are about 130 commercial banks in the country, and the majority of them are foreign. Singapore is estimated to be among the largest and busiest foreign exchange commercial centers: it is surpassed only by New York, London and Tokyo; and the Singapore Exchange stock market (SGH) is leading in the whole Asia. [ 4 ] In 2000 the index of Gross Domestic Product (GDP) of Singapore was USD 92 billion or USD 22, 960 per capita, with stable annual growth about 2 %. [ 4 ] In 2004 GDP reached USD 109. 4 billion: 32. 2 % was contributed by industry and 67. 8 % was contributed by service sector. At the same time GDP per capita totaled USD 23. 700, which is comparable with the same indexes of advanced economic systems of Western European countries. [ 3 ] Service sector has dominant contribution into the GDP of the country.
Mostly services are rendered in business and financial spheres, but maintenance of up-to-date communication and transportation networks also brings considerable profits. The rest of the service sector is covered by retail and wholesale trade and, of course, tourism. Annually millions of tourists, mostly from Japan and China, visit Singapore, and it is the second (after Malaysia) most attractive and entertaining traveling destination in South East Asian region. Tourism is the principal source of foreign exchange for the country. [ 6 ] The key point of Singapore industry is oil refining sector, shipbuilding and construction. The other most developed manufacturing spheres are chemicals and rubber products, textiles, food.
Since the 1990 s manufacturing of high-technological electronic equipment, machinery and devices, like computers or communication equipment, became dominating in industrial sector of Singapore. It covers about 50 % of industrial output and exceeds 50 % of total non oil export, besides, it employs about one third of total labor resources of the country. In some recent years pharmaceutical segment has been growing and developing, supported by large foreign investments. [ 6 ] Prevalent exports and imports are various types of fuel and equipment, but imports also include iron and steel, different consumer goods, textile and fabric, some types of food, etc. The value of exports is considerably higher than the value of imports: in 2003 the amount of exports totaled USD 142. 4 billion, and value of imports came to USD 121. 6 billion. The main import-export partners of Singapore are Malaysia and USA, which together cover more than 30 % of trading capacity of the country. The others are China, Hong Kong, Japan, Thailand and South Korea. [ 3 ] Exports and trade remain the most important components of Singapore economy.
For five recent years the country became a participant of 6 free trade agreements with different European countries, Australia, New Zealand, Japan and the USA. As a member of the Association of Southeast Asian Nations (ASEAN) and ASEAN Free Trade Association, Singapore has strong and profitable commercial ties established with almost all the countries of Asian region and with many more countries around the globe. Now Singapore is tenth largest commercial partner of the USA. Besides, Singapore is a big supporter of trade liberalization ideology of World Trade Organization (WTO) and frequently hosts official meetings and consultations of this organization. [ 1 ] Characteristic feature of Singapore economy is extremely poor agricultural sector: its contribution to GDP is almost negligible. Only less than 2 % of the territories are farmlands [ 3 ], and the majority of agricultural products, like meat, vegetables, eggs, poultry, are produced to satisfy the needs of small domestic market, though some food products are being exported. Fishing is slightly better developed.
The other notable characteristic is that there are no proper energy and natural gas resources in the country, thats why Singapore fully depends on their import. In 2004 natural gas consumption was 2. 5 billion cu m, and it was imported mostly form Malaysia and Indonesia. [ 3 ] Labor market of Singapore is very reliable and competent. It presents over 2. 2 million domestic and 0. 6 million foreign potential employees (2004). [ 6 ] High demand and compatibility of Singapore working power is proved by very low unemployment rate: in 2003 it was only 4. 8 %. Almost 50 % of working power is occupied in service and business, 18 % in manufacturing, 6 % in construction, and 16 % in other sectors of economy. [ 3 ] Singapore has very low rate of inflation, which in 2004 was only 0. 5 %. External debt of the country is USD 15. 6 billions (2003), but due to very rich exchange and gold resources, which in 2003 were estimated as USD 95. 75 billion, such debt can be considered as small and easy coverage.
The unit of currency is Singapore Dollar (SGD), and exchange rate is 1. 74 SGD per 1 USD (2004). [ 3 ] Well-considered governmental strategy of free trade and free market, directed on stimulation of economic progress and growth, became the key point of such success of Singapore economy. The other factors, which significantly contributed into such rapid and extensive economical development of the country, are geographic location of the island in the prospective ASEAN zone, modern and advanced financial system, liberal and corruption free governmental structures, clear and favorable taxation policy, excellent communication and transportation systems, availability of flexible and qualified working power, openness to innovations and modernization, etc. [ 4 ] Singapore offers wide and variable industrial and commercial opportunities for Western and American investors and businessmen. Despite of different culture and life-style, European traditions and social customs are familiar, and English is commonly spoken. Besides, Singapore has very developed and advances business infrastructure, including comfortable hotels provided with modern facilities for meetings and conferences (halls with simultaneous translation and interpretation audio systems, with up-to-date visual support opportunities, etc), numerous sophisticated office and business centers, educated and skilled working power, perfect transportation and telecommunication systems, and also high culture and developed ethic of doing business.
That is why interest to Singapore economy and market is not fading away, and the capital of the country frequently becomes a center of different commercial and business events, exhibitions and fairs, like annual trade presentations in Singapore Expo, etc. [ 5 ] Within five last years economy of Singapore has been recovering after Asian financial crisis of the end of 1990 s and worldwide economic slump, caused by war in Iraq and consequences of invasion of SARS. During 2004 improving performance and considerable growth of Singapore economy, leaded by trade, services and manufacturing, signals about positive tendencies and good prospects for the nearest future, though the risks and probabilities of jeopardizing economic expansion of the country (like rising prices for oil or threat of terrorist acts) are still high. Anyway, specialists of the World Bank consider Singapore to be the fastest developing economy in South Eastern Asia. [ 1 ] Therefore, for the last forty years Singapore economy demonstrated miraculous rise and the country of a small market, poor natural resources and phantasmal opportunities became an advanced business and financial centre with high-tech facilities. Following the policy of total globalization, Singapore constantly continues developing its principal advantages, like perfect political environment, excellent business and commercial infrastructure, flexible and competitive labor force, and many others.
Besides, it is always looking for new opportunities and new economic strategies to be implemented in the future. Bibliography: "Economic Outlook for Singapore. " Trade Watch. 01 Apr. 2004. Australian Department of Foreign Affairs and Trade. 14 Apr. 2005 < web >. "Economy of Singapore. " About Answers. Guru Net. 14 Apr. 2005 < web >. "Singapore. " CIA. The World Factbook. 10 Feb. 2005. 14 Apr. 2005 < web >. "Singapore - Advanced Economy, New Economy. " Ministry of Trade and Industry. 14 Apr. 2005 < web >. "Singapore. Business Profile. " Columbus Guidelines. 2005.
Columbus Travel Publishing Ltd. 14 Apr. 2005 < web >. "Singapore, Economy. " Countries Quest. 14 Apr. 2005 < web >. "The Singapore Economy and Currency. " Expat Singapore. 14 Apr. 2005 < web >. Outline In the first paragraphs of the work the main factors of economic rise and growth of Singapore are described. Geographical location, well planned economic strategies of the government, export-oriented policy in industry and manufacturing, vivid commercial activity, development of business and financial infrastructures, modernization of technological and communication nets are among them. Further paragraphs present a lot of statistical information, which demonstrates advancement of Singapore economy, like indexes of GDP, inflation and unemployment rates, export and import rates, etc. The main directions of contemporary development of industry, services, trade and export-import activity are sketched as expanding into electronic, chemical, pharmaceutical, construction, banking and telecommunication spheres. Closing paragraphs of the work emphasize significance of Singapore economy on international background and describe prospects and opportunities for foreign businessmen, who intend to make investments into it.
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