Singapore’s economic miracle fell on the second half of the 20th century, but the foundations laid in those years serve to the good of the country until now. This city-state is one of the best places for work and business with a high standard of living..
We understand why the Singapore economy is so strong, what advantages the country uses effectively, and what problems it skillfully bypasses.
A city-state that is ahead of all
Singapore is the economic center of the Asia-Pacific region. It is not the first year that it has retained the status of one of the largest and most developed economies in the world. And this despite the fact that the country is 171st in the world in terms of area and has almost no natural resources. In addition, she is among the leaders in the index of economic freedom. A Doing Business report by the World Bank calls the state the second largest in the world in terms of supporting the interests of entrepreneurs.
Singapore’s economy is mainly represented by the production and export of electronics, financial services and tourism..
The activity of the world’s busiest cargo seaport helps active international trade.
Leading Singaporean Economy
Despite a small domestic market and a lack of natural resources, Singapore confidently suffered financial crises in 1997 and 2008. He now has a stable surplus, high national income and no external debt..
A quarter of the country’s annual GDP is successful in the manufacturing sector. Key clusters: electronics, chemical industry, biotechnology, logistics and transport engineering. In the third quarter of 2017, this sector grew by 35%, due to an increase in demand in mechanical engineering and electronics.
The next largest sector of the economy is finance. Its growth is provided by a developed business environment and political stability. The Singapore financial services market is home to 200 banks. Many global companies choose this city to open regional branches and branches. Thus, the country attracts the best technologies and personnel, which facilitates the exchange of data between global and domestic markets..
A significant contribution to the country’s economy is also made by medical innovations, aerospace technology, clean energy, healthcare and content development..
The largest Singapore companies according to Forbes (2011) / Source: en.wikipedia.org
What natural resources does the country have?
Located on the southernmost point of the Malaysian Peninsula, with a slightly smaller area than Volgograd, Singapore does not have large deposits of natural wealth. But this did not stop him from becoming a regional center of the oil and gas industry. Moreover, the city has become the world leader in water related projects, for example:
• NEWater – wastewater treatment system for drinking.
• Deep Tunnel – a deep-water tunnel sewer system that is part of the city’s water management structure. It allows you to collect, process and further purify used water.
It is said that Singapore’s true natural resource is its people. The country attracts many high-quality specialists. This helps boost growth, on the basis of which local companies always need additional workforce. Thus, both the labor market and the consumer sector are gradually strengthening..
How Singapore infrastructure works
During the British colonization, Singapore was a military and commercial port, and even then the city received good infrastructure. After gaining independence in 1965, the postcolonial government continued to improve and expand the transport, communication, industrial, and housing systems..
The country has 9 310 kilometers of land roads, 199.6 km of railways (with combined high-speed public transport and trams). There is a bus service, taxi and ride sharing. The transport system is efficient, safe and punctual..
By air, Changi International Airport is connected to 380 cities from 90 countries. It serves 7,000 weekly flights that send people and cargo to various parts of the world..
The seaport of Singapore has more than 200 shipping lines with access to 600 ports in 123 countries. It can dock up to 1,000 ships. Therefore, it has the status of the busiest container port in the world..
No less good is the telecommunications system. The city has a high level of mobile communications – 1.5 phones per person. 90% of Singaporean homes and households have access to the Internet. There is a free Wi-Fi network throughout the entire island in cafes, restaurants and other public places..
Industrial and commercial facilities for business are also within reach. Singapore has 47 million meters2 strategically located areas. It is possible to use them for the construction of factories, warehouses, business parks. Enterprises can choose high-rise and low-rise world-class offices, both in the central business district and in other parts of the city.
Singapore’s current GDP
In the third quarter of 2017, the country’s GDP amounted to $ 107 billion (total for the year $ 323.90 billion). According to a Bloomberg report, Singapore’s economy has climbed 5.2% over this period. This is the largest increase in recent years..
If the world maintains “healthy” trade relations, then Singapore will be able not only to maintain growth in the manufacturing industry, but also gradually develop other industries: trade and services.
Does the country have public debt
The government has maintained zero external debt since 1995. As for domestic debt, the total amount of outstanding government loans for the third quarter of 2017 amounted to $ 496 billion. It includes registered shares and bonds, treasury bills and advance deposits.
But this high figure is not detrimental to the financial power of the city. The government takes loans as an investment, and their payback compensates for the difference.
Such strategic debts are realized along with reliable asset protection, sound macroeconomic policies and sustainable economic growth. The country has a good balance in which assets outweigh liabilities. It is also important that Singapore has a very low level of corruption (7th place in the world for the Corruption Perceptions Index).
The main sources of income of the Singapore government
The total government revenue in the third quarter of 2017 amounted to $ 69 billion. As in most countries, the bulk of it is formed by taxes: on income, property, value added and excise taxes. Other sources of income are fees and duties, leasing of state property, fines and confiscations, as well as proceeds from the sale of capital goods.
Singapore Trade Stability
In 2017, Singapore received income from the sale of goods worth $ 976.1 billion, which is 11.1% higher than in 2016. The state is in the TOP-15 exporters and TOP-20 importers of the world. The three leading export and import goods are machinery, transport equipment, chemical products, as well as various industrial products.
In 2017, exports amounted to $ 515 billion. The main partners are the USA, Australia, Japan, China and the United Kingdom. Import amount – $ 452.1 billion. Main counterparties: USA, Netherlands, China, Japan and Hong Kong.
Singapore’s economy is in a trend of healthy growth. According to Fortune rating, it is the third richest country in the world, which has high levels of foreign direct investment – $ 62 billion in 2017..
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Why is Singapore’s economy so strong? What factors have contributed to its remarkable growth and success? How has the government’s economic policies and strategies played a role in creating such a robust economy?
Singapore’s economy is strong due to various factors. Firstly, its strategic location as a major trading hub and gateway to Asia has attracted global businesses and investments. Additionally, the government has implemented robust economic policies that prioritize free trade, open markets, low corruption, and strong intellectual property rights.
Moreover, Singapore has invested heavily in education, ensuring a skilled workforce that can adapt to changing economic demands. The government has also played a crucial role in developing key industries such as finance, manufacturing, and technology through targeted policies and incentives.
Furthermore, Singapore’s commitment to infrastructure development, efficient transportation, and smart city initiatives has facilitated business operations. The country’s stable political environment, strong governance, and pro-business climate have built confidence for investors and entrepreneurs.
The government’s long-term economic strategies, such as the Economic Development Board’s industry-specific plans and the SkillsFuture initiative, have been instrumental in driving innovation and attracting high-value industries.
In summary, Singapore’s strong economy is the result of a confluence of factors, including its strategic location, effective economic policies, investment in education, focus on key industries, commitment to infrastructure, stable political environment, and proactive government strategies.