Singapore's GDP is growing, but not as fast as before

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:44

Singapore is often cited as the world's benchmark for economic reforms that have elevated the small island nation from the world's poorest to a world leader. Once part of the British Empire, then the Federation of Malaya, from which the island was excluded due to the fact that the Chinese dominated business, now Singapore has far surpassed both countries in terms of GDP per capita.

Success story

This territory has the freest economy in the world, with virtually no corruption and low unemployment. The path to success has been difficult and hardly replicable in other countries of the world, as few people will be allowed to use the "Bolshevik" methods of achieving success.

After independence, the country was left with a small domestic market and the hostile attitude of the former mother country. At that time, a policy was adopted that focused on attracting foreign investment, the growth of export industries and state-owned companies in strategicindustries.

This allowed Singapore to reach 41st place in the world in terms of GDP, which is a huge achievement for a small country. Prime Minister Lee Kuan Yew - the author of this strategy, which led to the success of the country - is considered one of the most successful statesmen in the world. As he himself wrote, he almost manually brought the first global corporations to Singapore, sometimes sitting for hours in the waiting rooms of their leaders. And now more than 3,000 global corporations are working here.

Development Model

Singapore is an example of the most successful use of geographical location. Being at the historical crossroads of the crossing of sea routes, the country began to develop oil refining to supply its neighbors with its products. Now this small island is the world's third center for the processing of petroleum products, having no hydrocarbon deposits of its own.

Services related to maritime transportation (logistics, insurance, financing, warehousing and storage, re-export), as well as tourism and recreation, account for about 70% of Singapore's GDP.

The country annually receives 6-8 million tourists, with a population of 4.5 million. Most of its citizens are directly or indirectly involved in entrepreneurial activities and more than 75% own shares in various enterprises.

The state is one of the most friendly to small businesses, more than 25% of Singapore's GDP is created in this sector. Developedbusiness infrastructure, excellent financial, tax and legal system, together with the stability of the political system, attracted several thousand corporations to the country.

Some macroeconomic indicators

The country showed steady economic growth for 39 years at an average of 8% per year, from 1960 to 1999. After the global financial crisis in Singapore, GDP growth was uneven - from minus 2% to 9.9%, which was mainly due to extraordinary circumstances from falling demand for electronics to the SARS epidemic. But still, the economy, for the most part, grew.

Between 2010 and 2016, Singapore's GDP grew by more than 25%. Foreign trade provides the bulk of the state's income, the country ranked 13th in the world in terms of exports and 16th in terms of imports.

The unemployment rate has been at 2% for a long time. Inflation for 7 years was less than 3%, and in recent years prices have begun to decline: in 2015 - minus 0.5%, and in 2016 - minus 0.3%.

Singapore ranks second in the world in terms of financial market development. The strengths of the banking system are the availability of credit and the stability of the banking system. About 700 financial institutions operate in the country, of which 122 are banks, including 116 foreign ones.

Foreign trade

Initially, the entire economy of the country was export-oriented, thanks to which it has a stable trade surplus. However, due to thatthat the state practically does not have its own resources, except for labor, Singapore imports a lot of materials and components. Singapore's exports in 2016 were $353 billion and imports were $297 billion

The main export products are consumer electronics, information technology, consumer goods, refined oil and rubber products. Electronics occupies about 48% of exports. The main partners are China, Hong Kong and Malaysia.

The main imports are aircraft, raw materials and components: crude oil, electronic components and chemical products. The main suppliers are China, USA and Malaysia.