Country Brief: Singapore

November 19, 2004

            The Republic of Singapore is located in Southeastern Asia, and consists of islands between Malaysia and Indonesia.[1]  Founded as a British trading colony in 1819, it joined the Malaysian Federation in 1963, but declared its independence two years later.[2]  It has since become one of the most prosperous countries in the world, with a national GDP equal to that of the leading nations in Western Europe.

Singapore’s governmental system is parliamentary republic, and the country’s geographic size is slightly more than 3.5 times the size of Washington, DC.[3]  Chinese, Mala, Tamil, and English are Singapore’s official languages, but the government has mandated that English be the primary language used at all levels of the school systems.[4]  Therefore, essentially all Singaporeans are fluent in English. Singapore has a 94% literacy level, and an average life expectancy of 81.53 years.[5]

As a highly developed free market economy that enjoys a remarkably open and corruption-free environment, stable prices, and a high per capita GDP, Singapore is known for its strict social order.  Because Singapore’s economy depends heavily on exports, the global recession of 2001-03 and the technology slump hit the country hard.[6] In 2003, Singapore’s economy was also adversely affected by the SARS outbreak, causing a slow 1.1% growth rate and 4.8% unemployment rate.  The economy is expected to bounce back to a 8%-9% growth rate in 2004, due to the possible growth in world electronics demand, and the growth in the U.S., EU, China, and Japan economies.[7]

Singapore’s exports feature petroleum products, food/beverages, chemicals, textile/garments, electronic components, telecommunication apparatus, and transport equipment to its major markets: Malaysia, U.S., EU, Hong Kong, Japan, and China.[8]  The country mainly imports aircraft, crude oil and petroleum products, electronic components, radio and television receivers/parts, motor vehicles, chemicals, food/beverages, iron/steel, and textile yarns/fabrics from its major suppliers: Malaysia, U.S., Japan, EU, and China.[9]  In 2002, manufacturing accounted for 24% of Singapore’s gross domestic product, and the service industry accounted for 64%.[10]  

            Singapore has strong international trade links, and is home to the world’s busiest port by tonnage handled.[11]  More than 7,000 multinational corporations around the world have invested in Singapore’s skilled workforce,[12] corruption-free government, and sophisticated and proficient infrastructure.[13]  These foreign firms account for more than two-thirds of manufacturing output and direct export sales, and are found in almost all sectors of Singapore’s economy.[14] 

Singapore has approximately 1.9 million main telephone lines that provide excellent service, and 3.5 million mobile phones.[15]  Although there are 2.3 million Internet users, Singapore had only 7 television broadcast stations in 2003.[16]  All of Singapore’s 3,066 km of highways and all the runways of the country’s 9 airports are paved.[17]  Singapore is a member of the UN, the Non-Aligned Movement and the Commonwealth, and an active member of ASEAN and APEC.[18]  Singapore and the US entered into a Free Trade Agreement (FTA) in May of 2003 that became effective January 1, 2004; the large number of US citizens living in Singapore, and Singaporeans studying in the US has aided the amicable relations between the two countries.[19]  Singapore also has FTAs with Australia, Japan, New Zealand, Switzerland, Iceland, Liechtenstein, Norway, and the Hashemite Kingdom of Jordan.[20]  Future possible FTAs with Bahrain, Egypt, Mexico, Canada, Korea and India, Panama, New Zealand and Chile and between ASEAN and China are currently being negotiated.

            Concerns that the international community should be aware of in Singapore:

• the country’s various disputes with Malaysia,[21]
• the country’s excellent transportation and financial service hub being used for illicit drug transportation or money laundering, and
• the possible weakening demand of electronic goods.[22]

Singapore’s skilled workforce, strategic location, efficient infrastructure, and virtually corruption-free government make the country an excellent trading partner, especially for foreign firms interested in targeting China or other markets in Southeast Asia.[23]