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| Republic
of Singapore |
| Economic
Overview |
| Key
Economic Indicators |
| GNP
(1996) |
US$
92.99 billion |
| GNP per capita |
US$ 30,550 (1996)
US$ 31,900 (1998)
|
| GDP |
S$ 143,014 million
(1997) or S$ 143.0 billion
US$ 84 billion (1998) |
| GDP growth rate (real) |
6.5% (1996)
8.0% (1997)
1.5% (1998) |
| GDP per capita |
S$ 38,272.8 (1997)
US$ 22,800.0 (1998) |
| Sector shares as percentage of GDP
(1998) |
| Manufacturing |
21.0% |
| Construction
|
9.4% |
| Commerce |
16.6% |
| Transport
and Communication |
10.5% |
| Financial
& Business Services |
29.2% |
| Others |
12.4% |
|
| Balance of payments |
$ 11.9 billion
(1997)
$ 5.0 billion (1998) |
| Exchange rates as at Jan 1999 |
1 US$ = 1.72 S$
1S$ = SL Rs. 40.36
|
| Inflation (consumer
price index) |
1998 - 1.5%
1999 - 0.5% |
| Total external debt |
N/A |
| Debt service ratio |
(1995) 0.5% |
| Employment - Total workforce |
1.88 million (1997)
1.83 million (June 1998) |
| Unemployment rate |
.7% (1997)
2.3% (June 1998) |
| (Unemployment
is increasing due to the financial crisis and there has also
been a fall in labour productivity by 1.3% in 1998 reflecting
the lower output). |
Other Important Economic Indicators
Its geographical location and promotion of overseas direct investment
inflow had been the two key components of Singapore's drive to develop
its manufacturing sector using exports as a core engine for the domestic
economy. This approach while generally successful pushed up wages
and made land and office space more expensive, resulting in higher
production costs and also worsened the country's labour shortage.
Singapore concentrates on promoting technology - intensive and capital
dependent higher value - added product industries while shifting labour-intensive
industries to neighbouring countries. While this policy was largely
successful, owing to weaker global demands for its exports particularly
electronics and electronic equipments domestic economy growth slowed
down in 1996 and 1997. The shrinking on overall demand by 4.7% in
1998 due to the contraction in regional trade activity following the
financial crisis worsened this. Although within the region the level
of volatility has abated somewhat economic contraction has begun to
bite. The near term outlook for the Singapore economy will continue
to hinge on external circumstances. Forward-looking indicators have
however improved and business expectations in manufacturing, commerce
and services have also turned less negative.
Economic
Affairs
Major Agricultural Sectors: None. However, some agriculture products
such as rubber, copra, fruit, vegetables and poultry are produced
within the country.
Major Industry Sectors
Petroleum refining, electronics, oil drilling equipment, rubber processing
and rubber products, processed food and beverages, ship repair, trade,
financial services and biotechnology.
Trade (1998):
$ 354 billion
Tourism
In 1998 6.24 million tourists excluding Malaysians by land visited
Singapore compared to 7.19 million in 1996. The revenue from tourism
in 1996 was S$11,145.6 million. Singapore's tourist attraction includes
a blend of cultures and excellent shopping facilities.
Investment
Policy
Singapore has one of the world's most open investment regimes. It
encourages foreign investment particularly in leading edge technologies.
The Economic Development Board is the primary agency entrusted with
the role of promoting foreign investment.
The government has implemented a policy of shifting labour intensive
industries overseas, while encouraging high-tech, high valued industries
at home. Operational Headquarters (OHQ) and Business Headquarters
(BHQ) are two policies the government has implemented in its mission
to promote Singapore as a "Total Business Centre" for the
Asian region. Firms choosing to utilize Singapore as a regional headquarter
for international operations, enjoy tax diverse as petroleum, trade
and shipping have taken advantage of the OHQ and BHQ projects.
There are no taxes on capital gains and no restrictions on foreign
ownership of businesses. Foreign investors are not required to take
on private or official joint ventures or cede management control to
local interests. Singapore does not impose performance requirements
on foreign investors. If investment incentives are required, a company's
track record, the amount of investment and contribution to improving
Singapore's high technology, manufacturing and knowledge intensive
services are important . The government does not require investors
to purchase from local sources or specify a percentage of output for
export, nor does it limit access to foreign exchange or require local
equity ownership in the investment. Foreign investors face no requirement
to reduce equity over time and are free to obtain necessary financing
from any source.
Investment
Direct investments in Singapore in 1996 by country:
| Country |
Value S$ million |
| USA |
2,262.0 |
| Japan |
1,960.4 |
| EU |
1,320.5 |
| UK |
397.6 |
| Germany |
246.4 |
| Netherlands |
517.8 |
| France |
59.1 |
| Other |
173.3 |
| Total |
5,716.2 |
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| Investment
by Industrial Category - 1996 (S$ million) |
| Electronic
products and components |
3,489 |
| Chemicals |
2,732 |
| Fabricated
metal products |
299 |
| Paper and
paper products and printing |
297 |
| Transport
equipment |
249 |
| Food and
beverages |
225 |
| Petroleum |
108 |
| Other |
686 |
Note: Domestic
investments also included
Source: Singapore Economic Development Board |
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Investment Outflows
Singapore's outward investment to overseas markets is also expanding
rapidly. At the end of 1996, Singapore's direct investments overseas
stood at S$ 46.2 billion, an year on year increase of 20.5%. Broken
down, Singapore's investment in ASEAN countries rose considerably.
ASEAN countries received 34.8%. The manufacturing sector makes up
about 39.2% of Singapore's overseas investment.
Bi-lateral, Multi-lateral and Regional Agreements
Singapore is a founder member of the Association of South East Asian
Nations (ASEAN). Under the framework Agreement on Enhancing ASEAN
Economic Co-operation signed at the 4th ASEAN Summit in SIngapore
in January 1992, Singapore joined the other members of the ASEAN to
set up the ASEAN Free Trade Area (AFTA) within 15 years. After this
agreement the member states including Singapore agreed to a regional
tariff arrangement known as the Common Effective Preference Tariff
(CEPT) whereby tariffs among the member states would be reduced to
5% or less by the year 2003. Although CEPT is called a joint tariff,
tariff rates vary with country and there are no plans to reduce them
to a single uniform rate.
Under an agreement at the 5th ASEAN Summit in Bangkok, Singapore also
became a signatory to the ASEAN Industrial Co-operation Scheme (AICO).
AICO is an advanced form of selective tariff liberalization within
the ASEAN, whereby low tariffs are applied before 2003 to the manufactures
of firms that have received authorization from trading countries within
ASEAN. The aim is to thereby opromote intra regional trade, expand
the horizontal division of labour and attract foreign investment.
ASEM is a relatively new policy initiative by Singapore to help enhance
economic relations between Europe and Asia. ASEM was inaugurated in
1996 as a platform for increasing trade and investment opportunities
between Asia and Europe. ASEM came out with two important initiatives,
Trade Facilitation Action Plan (TFAP) and Investment Promotion Action
Plan (IFAP)
Besides ASEAN, Singapore is also a member of APEC ADB ESCAP G 77 IBRO
Colombo Plan.
Major Development Programmes that give Opportunities for Sri Lanka
Sri Lanka can attract Singapore investment in areas that offer potential
for trading such as computers, food & beverages and security services.
With the government having taken steps to eliminate customs duty on
IT and textile products, more opportunities are available for investment
in IT and consumer electronics. Opportunities are also availabe to
attract Singaporean investments in the manufacturing and infrastructure
sector.
Singapore is also actively involved in the development of industrial
parks in the region. Sri Lanka can get Singapore's assistance to set
up in the region such as in Vietnam, Philippines, Bangalore (India),
Indonesia and China. Sri Lanka could obtain the assistance of organizations
such as the Jurong Township Corporation, which is Singapore's leading
industrial developer and manager of industrial facilities and specialized
parks and currently involved in a number of projects to develop industrial
townships in the Asia-Pacific region. As these parks provide a business
environment, they would attract not only Singaporean companies but
also multi-nationals wishing to venture into the local market. |
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