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Economics and Business in Singapore

Since 2010, Singapore has experienced strong economic growth. This growth is mainly a result of state-controlled development programs aimed at special industries. The country's gross domestic product (GDP) increased by 3.6 per cent in 2017. GDP per capita is USD 94 100 (2017), which is the seventh highest in the world and the highest in Asia. The unemployment rate is 2.2 per cent (2017). Singapore ranks number nine out of 189 countries on the UN Global Living Index. No other ASEAN country has a higher ranking on this list.

Business of Singapore

Industry

According to COUNTRYAAH, the industrial sector accounts for 24.8 per cent of the country's GDP and employs 25.6 per cent of the working population.

Historical background

In 1965, when Singapore was forced out of the union with Malaysia, job creation was the primary goal. Foreign investment was attracted to the country to build up the industry. After reaching the goal of full employment in the early 1970s, the focus shifted to developing a more technologically advanced industry.

The development of the industrial sector

Singapore has developed a large industrial growth area in Jurong on the western part of the island. Here are a large number of factories with the production of cement and building materials, plywood, chemicals and plastics, machinery, ships and steel structures. Singapore is also a leading nation in Southeast Asia for the production of oil platforms and oil drilling equipment.

In addition, lighter industrial products such as metal products, electronic articles, including telecommunications equipment, as well as textiles and clothing, pharmaceutical products, vegetable oils and more are produced. Japanese capital is behind some of the new industries, but European and American industries are also setting up branches and subsidiaries in Singapore. Much of the low-tech, but space-intensive and labor-intensive industry has moved out either to Johor in Malaysia or to the Indonesian island of Batam, 31 km south of Singapore.

Agriculture and fishing

Agriculture and fisheries comprise only a negligible part (about 0.1 per cent of GDP) of the country's business and employ 0.7 per cent of the working population.

Service Industries

The service industries account for 75.2 per cent of the country's GDP and employ 73.7 per cent of the working population.

Since the beginning of the 1990s, there has been a focus on the development of the service industries (trade, finance, transport and tourism), where these industries together with the industry will act as a "locomotive" in the country's economic development. Singapore was early in using modern information technology in the development of the service industries, and today it is considered the leading financial center in Southeast Asia. Many Norwegian companies are established in Singapore either with offices or production companies.

Tourism has become increasingly important. In 2018, Singapore was visited by 18.5 million foreign tourists, compared to 11.6 million in 2010. (This does not include foreign nationals who traveled from Malaysia to Singapore by train, car or bus.) The largest number of tourists is from China, Indonesia, India, Malaysia and Australia.

Foreign Trade

Singapore's exports amounted to USD 396.8 billion in 2017, while imports amounted to USD 312.1 billion. With this, the country had a foreign trade surplus of USD 84.7 billion.

The five main export markets are: China (27.3 per cent), Malaysia (10.8 per cent), the United States (6.6 per cent), Indonesia (5.8 per cent) and Japan (4.7 per cent). The main export goods are electronic products, telecommunications equipment, pharmaceuticals and other chemicals, refined petroleum products and food and beverages.

The five main markets for Singapore's imports are: China (13.9 percent), Malaysia (12.0 percent), the United States (10.7 percent), Japan (6.3 percent) and South Korea (5.0 percent). The most important import goods are machinery and equipment, raw materials, mineral oil, food and consumables.

Transport and Communications

The development of an effective communication network has been an important part of the economic development. With its strategic location on the Singapore Strait and high efficiency, Singapore has become one of the leading transport hubs in Asia.

Changi International Airport is located in the eastern part of Singapore, approximately 20 km from the city center. With 62.2 million passengers (2017), Changi is the ninth largest airport in Asia.

Singapore has the world's second largest container port after Shanghai. Measured in value, the country has the world's fourth largest fleet after Greece, Japan and China.

Singapore has a rail link with Malaysia, and two bridges connect the island with Johor. A metro covers much of the island. The total road network is 3 496 km, of which 164 km are highways.

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