Since its independence in 1965, Singapore has gone through an immense transformation. Economic development has been rapid and consistent, which is a reflection of the country’s success in developing an open and outwards-oriented development strategy. Along with the other so called Asian Tigers, Singapore employed an export-led economic approach. Initially this entailed a focus on labor-intensive low-value products, but over time it transitioned to high value-added goods, such as electronics, chemicals and biomedical products.
Along with a shift in focus regarding merchandise exports, the importance of services to the Singapore economy also grew. Services exports have consistently increased and have posted an average annual growth percentage of 6.7 on a compounded annual growth rate (CAGR) basis from 2010 to 2014, significantly higher than the 2.0 percent growth in merchandise exports over the same period.
A testament to the vast economic growth is that Singapore’s GDP has more than doubled from $148 billion in 2007, to $298 billion in 2014. The small city-state of just 5.4 million has managed to not only survive post colonialism, but thrive. It consistently ranks in the top five globally in GDP (PPP) per capita.
The economy of Singapore is vastly diverse, but leans most on heavily on the following sectors: electronic components, aircraft and parts, electronics industry production/testing equipment, laboratory and scientific instruments, pollution control equipment, electric power systems, construction equipment and building products. The U.S.-Singapore trade relationship is a successful one, totaling $47 billion in 2014. Singapore is one of the trading partners with whom the U.S. has a trade surplus; in 2014 this surplus was $14 billion. While it is not as significant of a relationship as on the national level, Singapore is also a major trade partner with Washington State. From 2013 to 2014, exports from Washington State to Singapore grew by 36% – making the country our 16th top destination for exports.
Singapore plays a central role within ASEAN (Association of Southeast Asian Nations) and was one of five founding nations. The initial motivation for the creation of ASEAN was protection from Communism as well as a mutual striving for economic development amongst the member states. Today the members are: Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Cambodia, Laos, Myanmar (Burma), and Vietnam. All-in-all this amounts to a region that boasts a population of 633 million with a combined GDP of $2.4 trillion. As a region, it certainly represents one of the world’s most important markets for U.S. exports. In 2013 alone, the U.S. exported $79 billion to ASEAN, supporting over 280,000 American jobs. It is also the top U.S. direct investment destination in Asia with $160 billion worth of investments.
Singapore has invested significant resources in developing neighboring ASEAN nations. Singapore has made four separate donations totaling $170 million to the Initiative for ASEAN Integration (IAI), which serves to promote integration within the region and enhance ASEAN’s competitiveness as a region within trade and investment. The IAI framework serves primarily to assist the four newest members of ASEAN (Cambodia, Laos, Myanmar and Vietnam) in their integration efforts. The IAI oversees a variety of human resource development programs to this end.
Part of Singapore’s contribution in this aspect of ASEAN integration has been the establishment of four training centers, set up in each of the four new member countries. Since 2002, the four centers have been conducting training courses for government officials in a wide variety of fields, including English Language, Information Technology, Public Administration, Trade and Tourism. The Singapore Cooperation Programme reports that roughly 29,000 officials have been trained so far.
Singapore has made it clear that it still hopes to do more and its leaders see a distinct role for the nation within ASEAN. In 2012, Foreign Affairs Minister K Shanmugam noted: “As it gets more and more integrated, we need a place in ASEAN that’s going to be the services center — provide logistics, administrative, accounting… And there’s one place which can do that — obviously, Singapore.”
COMING UP NEXT
To learn more about the exciting opportunities that both Singapore and ASEAN present, join us at our upcoming program featuring the US Ambassador to Singapore, The Honorable Kirk Wagar, on Thursday, April 30. Click here to learn more and register.