Singapore is an island city, located on the southern tip of Malaysia. The island has sixty three islets inside its regional waters covering an area of approximately of 710.2km squared. It has a population of more than 4 million people, including foreign and permanent residents. Singapore gained self-governance in 1959 before joining other states to form Malaysia in 1963. This union lasted only for two years after which Singapore became independent. It subsequently became one of the most prosperous nations with good global trading links, since its port is one of the world’s busiest tonnage-handling ports. It is viewed as the worldwide Asian business centre point and it is anticipated to remain the world’s top area for working together.
Improvement in the city state’s macroeconomic solidness, the consistency and reasonableness of its duty framework and in the regulatory environment for new local business organizations will add to a peripheral ascent in its general business environment standpoint score. These will outdo slight deteriorations in the atmosphere for foreign investment. The political scene will stay stable, with open establishments staying overseen and exceedingly proficient. The government will keep on pursuing mutual and multilateral unhindered commerce agreements, with a specific end goal to expand and extend advertise access for local firms.
Trade contributes highly to the bulk of the economy, with the imports amounting to approximately $ 117 billion and the exports more than $ 120 billion. Malaysia, the United States, and the EU are the major trade markets for Singapore (Hsueh et al., 2013). However, the manufacturing sector for electronics also constitutes highly to the bulks of earning. Therefore, both the manufacturing and the service sector are the main areas where Singapore has concentrated on to enhance economic growth.
Singapore Economic Overview
Currently, Singapore is among the countries with the fastest growing economy (Hsueh et al., 2013). Since the 1960’s, it has witnessed a rapid economic growth triggering it to be a modern city-state. Some factors that have contributed to this achievement include mobilization of the human capital, continuous development of infrastructure, and a strategic government role.
In the early 1960’s, Singapore utilized its physical infrastructure and semi-skilled workforce to attract foreign investors. During this period, the GDP grew at a rate of 6% per year. Through entry of foreign companies, new technology was adopted to bring in more investors. In 1970, Singapore’s GDP growth rate was 10%, and the country gained international recognition (Hsueh et al., 2013). This was attributed highly to the government’s initiatives which led to low unemployment rates of 3.5% and the growth of the manufacturing sector by 25% of the GDP.
From 1980, Singapore achieved a continuous growth rate in GDP by 7.3%. Besides, the proportion of skilled employees rose from 11% in early 1980 to 22% by late 1980 (Vu, 2013). This helped to establish a more modern infrastructure and skilled workforce to enable it to become more successful both in the financial and business areas. This was prompted by increased pressures in the labor market and its inability to maintain low wages for its workforce.
Different policies were put in place to help meet the variety the economy to attract foreign investments thereby promoting maintenance of the country’s economy success. By the end of 1990, there was a rise by 30% of the GDP in comparison to the previous decade (Tang et al., 2014). Also, there was an increase in the number of research scientists by 10,000. However, there was contraction of the economy by 1% in 1998 due to crises in Asia during that time.
Between 2000 and 2010, the country maintained a consistent growth rate of 4% and today it has a GDP measured at $305 billion. During this period, the GDP grew at an average of 6.7% per year. In 2005, the government allowed several entertainment industry activities, which boosted the economic activity in a big way (Tang et al., 2014). By 2010, Singapore was an affluent society at the cross-roads of international flows of trade, finance, talent, and investment.
Singapore Economic Development
After Singapore gained independence, it still continued to experience problems, with more than three million people being unemployed, two-thirds of its population living in slums, and having unfriendly neighboring states, such as Malaysia and Indonesia. Factors that have contributed to the growth of Singapore’s economic development and creation of solutions for the unemployment are owed to the country embarking on industrialization (Vu, 2013).
Despite Singapore’s concentrating in the service industry, the manufacturing sector has contributed to the increase of the economy as well. The major sectors in the manufacturing industry that contributed to the economy included biomedical engineering, chemicals, and electronics. There was a slight improvement in the production index for the economy in 2003 (Tang et al., 2014). During that time, the manufacturing industry contributed 24.3% of the total GDP. However, in 2001 there had been a negative growth of 11.6% as a result of weak demand for Singapore’s manufacturing products from the US, which was the country’s main importer.
Factors that can be attributed to the country’s economic development include combined state-directed investments in government owed corporations and establishment of export-oriented economic frameworks and foreign investments. Singapore does not have any natural resources; however, the country is relying on the infrastructure and its human resources. Therefore, it can be argued that the economic growth of the country has resulted from the extensive utilization of its resources.
Singapore government and its citizens have played a crucial role in this economic achievement. This has resulted from the realization that Singapore primarily depends on the human resources and also on foreign investor’s resources. Therefore, the positive growth of the economy can be attributed to the government as well as the citizen’s efforts in ensuring the country remains competitive. Besides, an establishment of a stable government has attracted more foreign investors, from which the country gained financial capital, which is crucial for economic growth. It’s now everything that you can get to know about Singapore, read this essay about traveling to find out new interesting things about this fascinating place.