Singapore - Economic Growth and Development Part II

By M. Isi Eromosele

To maintain its competitive position despite rising wages, the government of Singapore 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 has also implemented cost-cutting measures, including tax cuts and wage and rent reductions, to lower the cost of doing business in Singapore.

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 business operating environment. The United States leads in foreign investment, accounting for 11.2% of new actual investment. As of 2009, the stock of investment by U.S. companies in the manufacturing and services sectors in Singapore reached about $76.86 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.

Situated at the crossroads of international shipping and air routes, Singapore is a center for transportation and communication in Southeast Asia. Singapore’s Changi International Airport is a regional aviation hub served by 80 airlines. The Port of Singapore is the world’s busiest 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. Singapore has rolled out a nationwide broadband network that provides high-speed Internet connections at low prices. Sixty percent of the country is covered by this broadband service. Radio and television stations are all ultimately government-owned or government-linked. Daily newspapers are published in English, Chinese, Malay, and Tamil.

Singapore’s strengthening economy has added to an Asian rebound that prompted central banks to raise interest rates in recent weeks, even amid concern that Europe’s debt crisis will slow the global recovery. The nation has raised its GDP forecast twice this year and Credit Suisse Group AG and Oversea-Chinese Banking Corp. predict the island may overtake China as Asia’s fastest-growing economy in 2011.

Singapore is on course to be the world’s second-fastest growing economy, adding to inflation pressures that have prompted policy makers to allow faster currency gains and take steps to cool the property market. The expansion may signal Asia will in 2011 sustain an outperformance over developed markets hampered by Europe’s sovereign credit woes and high unemployment in the United States.

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

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