Economics and business
Since Singapore became fully independent in 1965, the
country quickly industrialized. The government focused
primarily on labor-intensive manufacturing but also on
education and better infrastructure. The lack of natural raw
materials would be compensated by the availability of
trained labor and a good business climate.
countryaah, one of the most liberal economies in the world grew up,
where the market forces have a lot of room at the same time
as the government is active through stimulations and small
rule shifts and monitors that the development is moving in
the desired direction. The business-friendly climate has
promoted entrepreneurship and has for a long time attracted
greater foreign direct investment than any other country in
Asia. A number of multinational companies have placed their
regional headquarters as well as some qualified
manufacturing and research to Singapore.
More than in any other Asian country, Singapore has for a
long time had a stable political regime, very good
infrastructure, well-educated, though limited labor and high
living standards, more than in Hong Kong's main competitor.
More than three quarters of industrial production now takes
place in foreign-owned companies and, to an increasing
extent, service production is also internationalized.
The permanent workforce is very well educated.
Singaporeans over the age of 24 have, on average, gone to
school for almost 11 years, and just over 28 percent of them
have university education (2015). However, there is a
shortage of trained personnel, and especially multinational
companies are recruiting specialists from abroad.
Singaporeans make up just over two-thirds of the country's
labor force. The remainder are foreign guest workers, most
of them low-skilled. They work primarily in the construction
sector, in households and in transport and commerce.
The country's GDP grew rapidly and steadily most years
until the beginning of the 2000s, with an annual increase of
7-10 per cent during the years 2004-07. The decline was
severe during the global financial crisis over the next two
years, especially in the manufacturing industry. After a
sharp upturn in 2010, five years followed with increasingly
In 2015, Singapore was one of the countries in the world
with the highest economic prosperity. Foreign direct
investment is still increasing and now the country is itself
a significant investor in other countries in Southeast Asia
and also in China and India. Domestic companies are
encouraged to export in these new markets where there is a
growing demand for high-tech products.
The early location benefits remain, but limitations have
been added as a result of strong growth. There is very
little land for housing, facilities and traffic and a
problematic lack of water for households and businesses. The
cost of living is rising and the pay gap is the same. The
Government now emphasizes the need to strengthen the social
insurance system, especially for pensioners, and the need
for a major investment in lifelong learning as well as
efforts to promote productivity and innovation in domestic
For information on GDP and other business statistics, see
Agriculture, forestry, fishing and other raw materials
Traditional agriculture, forestry and fishing have ceased
in Singapore. Farming with grain cultivation no longer
exists, and the farmers, who make up about 1 percent of the
employed, mainly sell chickens and eggs and to some extent
vegetables. About 95 percent of all food must therefore be
imported. However, two goods are exported from this sector,
namely orchids and aquarium fish.
There is no productive forestry either. The tropical
forest that previously existed was harvested to give way to
urban development. Remains of nature-protected areas of
different kinds and higher vegetation at the water
reservoirs remain. Singapore can still give a green
impression because the city planning is concerned with
elements of green environment with tree plantings and other
Fishing was previously an important industry in the
waters around Singapore but is no longer in traditional
form. However, there are fish farms in some places on the
coast and also offshore.
Singapore has no own resources on minerals and energy raw
materials. The only mineral deposits that are mined are
granite and sand used in road construction. The country also
lacks its own resources on fossil raw materials. Until the
beginning of the 2000s, energy supply was entirely dependent
on oil imports. Since then, energy policy has changed.
Natural gas is imported via pipelines from neighboring
countries, and since 2009 there is also a port facility for
handling liquefied natural gas (LNG) that is imported from
more distant countries. The country has become increasingly
clear throughout the region's center for trade in natural
gas and for the development of natural gas use.
Calculated per capita, Singapore has high electricity
consumption. Several industries are energy-intensive,
primarily shipbuilding and petrochemicals. The standard of
living is high and, among other things, air conditioning
consumes a lot of electricity.
In 2013, more than 90 per cent of the electricity came
from natural gas and 5 per cent from oil, while only 3 per
cent was renewable energy (biomass, mainly waste).
Imports of crude oil and oil products are still very high
as fossil fuels are required for all international traffic
with Singapore as a hub. Above all, crude oil is the raw
material for Singapore's oil refineries and other
petrochemical industries. This is one of the world's largest
centers for oil trade and oil refining and several global
oil companies have their regional headquarters in Singapore.
Natural conditions are lacking to achieve a more sustainable
energy supply, and the almost total dependence on imports
means a great deal of energy security for the country.
The country's manufacturing industry and service are
highly developed industries with international markets.
Early in industrialization, both foreign and domestic
companies invested heavily in electronics manufacturing,
which has since been Singapore's most important industrial
industry; In 2013, it alone accounted for almost 1/3 of the
value of the country's industrial production. Mainly,
computer equipment and other consumer electronics are
manufactured. During the 2010s, the growth rate slowed down
in this sector.
Instead, the government has stimulated strong growth in
biomedical research, biotechnological development and
pharmaceutical manufacturing. Global pharmaceutical groups
are increasingly placing research and clinical drug testing
in the country. Singapore is seen as the center for
expansion in the growing Asian market. Also attractive is
Singapore's expertise and regulations in the field of
Since Singapore has the world's largest transhipment
port, there have long been major repair yards and a number
of companies with marine service. The country's high-tech
niche in this regard has become the design and production of
oil rigs and other equipment for the extraction of crude oil
and natural gas at sea. 70 percent of the world's oil rigs
are built in Singapore. In collaboration with Norway,
research and development of oil extraction methods are being
conducted at great depths and in stormy waters.
Singapore has no oil resources of its own, but as a
result of its excellent transport situation, the country has
become one of the world's largest centers for oil trade. In
connection with this, an extensive petrochemical industry
has emerged. It has expanded during the 2010s, despite
changing conditions in the world's oil market, and in 2015
it accounted for approximately the same share of the
industry's production value as the electronics industry. The
operations have been gathered on Jurong Island, the largest
of Singapore's artificial islands, which is adjacent to the
The major global chemical groups have both manufacturing
and research here, among other things regarding more
efficient forms of fossil energy for the transport sector,
chemicals for safer agricultural production and a
long-running water purification.
As in the previous ten years, Singapore 2015 was placed
first in the World Bank's measurements of the world's
countries' business climate. Among other things, the
reliability and efficiency of the operations were noted. The
good international rating is reflected in the importance of
the service industries in the economy. Business services
accounted for 15 percent of GDP in 2015, the financial
sector for 13 percent and trade for 15 percent.
Singapore advocates a very liberal trade policy and has
concluded free trade agreements with most of the world's
largest economies. During the period 2009-14, the value of
Singapore's foreign trade in goods increased by about a
third, and in particular, the importance of trade in oil,
oil products, chemicals and chemical products increased in
both imports and exports. At the same time, the share of
machinery and equipment decreased, particularly as regards
the income from electronics exports.
2015 saw a significant change in the trade in oil and oil
products. Volume still increased, but prices fell sharply
and in terms of value, the composition of trade changed
significantly. The downturn in the oil trade also meant that
export revenues in that year decreased by just over 7
percent (to US $ 476 billion) and import costs by 12 percent
(to US $ 408 billion).
Singapore's important role as a hub in the international
transport networks is reflected in the fact that a large
part of its foreign trade is re-export. Imported goods are
further exported in unchanged condition. Half of the
country's exports in 2015 consisted of goods produced within
the country while the other half were re-exports.
The country's most important trading partners are China
and Malaysia. Significant is also trade with Hong Kong and
Indonesia as well as with the EU and the US.
Service exports, which have steadily increased since
2010, are another important income. In the middle of the
10th, it generated revenue corresponding to about
four-fifths of goods exports. The increase came mainly from
repairs and maintenance of ships and aircraft, as well as
information and communication services and insurance.
Another source of income is tourism. In the mid-10s, about
15 million visitors came to the country annually.