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GDP (2002 real, 1995 prices): $91 billion.
Annual real growth rate: 9.4% (2000), -2.4% (2001); 2.2% (2002)
Per capita GNP (2002--purchasing power parity): $21,255.
Natural resources: None.
Agriculture (under 0.5% of GDP): Products--poultry, orchids, vegetables, fruits.
Manufacturing (26% of real GDP): Types--electronic and electrical products and components, petroleum products, machinery and metal products, chemical and pharmaceutical products, transport equipment (mainly shipbuilding and repair), food and beverages, printing and publishing, textiles and garments, plastic products, instrumentation equipment.
Trade (2002): Exports--$126 billion: petroleum products, food/beverages, chemicals, textile/garments, electronic components, telecommunication apparatus, transport equipment. Major markets-- Malaysia (18%), U.S. (15 %), EU (13%), Hong Kong (9%), Japan (7%), and China (5.5%). Imports--$117 billion: aircraft, crude oil and petroleum products, electronic components, radio and television receivers/parts, motor vehicles, chemicals, food/beverages, iron/steel, textile yarns/fabrics. Major suppliers--Malaysia (18%), U.S. (14%), Japan (13%), EU (12%), and China (7.6%).
Economy of Singapore
Singapore's strategic location on major sea lanes and industrious population have given the country an economic importance in Southeast Asia disproportionate to its small size. Upon independence in 1965, Singapore was faced with a lack of physical resources and a small domestic market. In response, the Singapore Government adopted a pro-business, pro-foreign investment, export-oriented economic policy framework, combined with state-directed investments in strategic government-owned corporations. Singapore's economic strategy proved a success, producing real growth that averaged 8.0% from 1960 to 1999. The economy picked up after the 1997 regional financial crisis, with a growth rate of 9.4% for 2000, but then fell back in tandem with the economic slowdown in the United States, Japan, and the European Union, as well as the worldwide electronics slump, so that GDP fell by 2.4% in 2001. The economy rebounded in 2002, up 2.2%, but is expected to register only 0%-1% growth in 2003, given the effect of SARS in the first half of the year and continued weakness in the export sector.
Singapore's largely corruption-free government, skilled work force, and advanced and efficient infrastructure have attracted investments from more than 3,000 multinational corporations from the United States, Japan, and Europe. 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 corporations.
Manufacturing and financial/business services are the twin engines of the Singapore economy and accounted for 26% and 63%, respectively, of Singapore's gross domestic product in 2002. The electronics industry leads Singapore's manufacturing sector, accounting for around 40% of Singapore's total industrial output, but the government also is prioritizing the development of the chemicals and biomedical/pharmaceutical industries.
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 also is actively negotiating free trade agreements with key trading partners, and has concluded one with the United States.
Trade, Investment, and Aid
Singapore's total trade in 2002 amounted to $243 billion, an increase of 3% from 2001, but below the level for 2000. Despite its small size, Singapore is the 12th-largest trading partner of the United States. In 2002, Singapore's imports totaled $117 billion, and exports totaled $126 billion. Malaysia was Singapore's main import source, as well as its largest export market, absorbing 17% of Singapore's exports, with the United States close behind. Re-exports accounted for 47% of Singapore's total sales to other countries in 2002. Singapore's principal exports are petroleum products, food and beverages, chemicals, textile and garments, electronic components, telecommunication apparatus, and transport equipment. Singapore's main imports are aircraft, crude oil and petroleum products, electronic components, consumer electronics, microelectronics manufacturing equipment, motor vehicles, chemicals, food and beverages, iron and steel, and textile yarns and fabrics.
Singapore continues to attract investment funds on a largescale despite its relatively high-cost operating environment. The United States leads in foreign investment, accounting for 35% of new commitments to the manufacturing sector in 2002. As of 2003, the stock of investment by U.S. companies in the manufacturing and services sectors in Singapore reached about $61.4 billion (total assets). The bulk of U.S. investment is in electronics manufacturing, oil refining and storage, and the chemical industry. More than 1,300 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 $53 billion by the end of 2000. China was the top destination, accounting for 15% of total overseas investments, followed by Hong Kong (11%), Malaysia (9.0 %), Indonesia (6.0%), and the United States (5.0%).
The United States provides no bilateral aid to Singapore.
In 2002, Singapore had a total labor force of about 2.13 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 has been only one strike in the past 15 years.
Singapore has enjoyed virtually full employment for long periods of time. Amid slower economic growth, unemployment rose to 5.9% in September 2003. Much of the unemployment is structural, as low-skill manufacturing operations move overseas. To cope with labor shortages, the number of foreign workers in Singapore increased rapidly from 1990-97. Foreign workers still comprise 30% of the labor force; the great majority of these are unskilled workers.
Transportation and Communications
Situated at the crossroads of international shipping and air routes, Singapore is a center for transportation and communication in Southeast Asia. Singapore Changi International Airport is a regional aviation hub served by 62 international airlines and is being expanded with the construction of a third terminal slated for completion in 2006. The Port of Singapore is the world's busiest and ranks in second place globally as a center for containerized transshipment traffic. The country also is linked by road and rail to Malaysia and Thailand.
Telecommunications and Internet facilities are state-of-the-art, providing high-quality communications with the rest of the world. Radio and television stations are all ultimately government-owned or government-linked. The print media is dominated by a company with close ties to the government. Daily newspapers are published in English, Chinese, Malay, and Tamil.