Singapore WT/TPR/S/14
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I. RECENT ECONOMIC PERFORMANCE
(1) Introduction
1. Singapore enjoys rapideconomic growth, growing employment opportunities andpricestability
(Tables I.1andI.2). Ithasbenefited from substantial inflows offoreign direct investment, anopen
trade régime, political stability andawell-developed infrastructure.
2. Economic policy aimstopromote thecreation ofnational wealth through sustained andstable
economic growth, based onthefreemarket system. Theprivate sector isencouraged toplayaleading
rôleineconomic development, while theGovernment provides anenvironment conducive forprivate
sector business activities.
3. Themid-1980s sawashiftintheGovernment 'seconomic strategy, withtheadoption ofawide
range ofmeasures aimed atreducing dependence onthemanufacturing sector andpromoting the
development oftheservices sector astheengine ofgrowth forthe1990s. Currently, however,
manufacturing andservices areseenbytheauthorities asthetwopillars oftheeconomy; while the
share ofmanufacturing inGDPdecreased through 1985, ithassince recovered toaround 27percent,
withtheservices share inGDP reaching 64percent(Tables I.1andI.2).
4. Singapore experienced arecession in1985, withadecline inrealGDP; theeconomy recovered
rapidly in1986 afterimplementation ofcost-cutting measures. RealGDP growth averaged almost
8percentin1985-90, slowing in1991and1992; realGDPgrowth ofabove 10percentwasrecorded
during 1993 and1994. Unemployment hasremained below 3percentsince 1989.
(2) Recent Developments andConstraints onGrowth
5. Singapore 'sopenness totrade aswellastoforeign direct investment hasbeenamajor factor
initsrapid economic growth. Itsratiooftrade toGDP hasgrown strongly overthelastdecade, with
anupsurge since 1992, andtrade ingoods andservices nowrepresents over500percentofGDP
(Chart I.1). Recent growth hasbeenboosted bytherecovery intheUnited States economy andthe
continued expansion oftheregional ASEAN economies. Theelectronics industry wasthemain
contributor totherapid growth inmanufacturing, while services, especially financial services, have
alsogrown rapidly.
6. Themainconstraints onSingapore 'sgrowth areitssizeandlimited resources. Strong economic
growth hasledtorising costs oflabour andincreasing industrial andoffice rentals. Theunitlabour
costindex increased bysome 26percentbetween 1988and1991, slowing during 1992-1994, reaching
133.0 (predicted value) in1994. Theaverage hourly wage ofSingapore production workers was
US$6.29 in1994.
7. Singapore hasattempted toraiselabour productivity byimproving theeducational standards
ofitsworkers, aswellasupgrading skills through programmes suchason-the-job training. The
Government alsoencourages companies tomake thebestuseofSingapore 'slimited labour poolby
employing more part-timers andolder persons. TheRetirement AgeActof1993raised theretirementWT/TPR/S/14
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agefrom55to60years, increasing thelabour pool. TheGovernment alsotriestoattract skilled, foreign
personnel, particularly research anddevelopment engineers.1
Table I.1
Basic economic andsocial indicators
1980 1985 1990 1993 1994
1.Population
Population (million) 2.3 2.5 2.7 2.8 2.9
Urban population (percent) 100.0 100.0 100.0 100.0 100.0
Employment (million) 1.1 1.2 1.5 1.6 1.6
Female participation (percent) 44.3 44.9 48.4 50.6 50.9
Birth rate(births perwoman) 1.8 1.6 1.9 1.8 1.8
Lifeexpectancy atbirth(years) 72.2 73.9 75.3 76.1 76.4
2.GDP atconstant prices (US$ million)
(a)atmarket prices 13,479 18,482 27,195 33,970 37,400
(b)atfactor cost 12,301 16,913 25,052 31,140 34,049
Share inGDP (percent)
Agriculture 1.3 0.8 0.3 0.2 0.2
Industry 38.1 36.6 35.8 35.7 36.1
Manufacturing 29.1 23.6 28.3 26.7 27.0
Services 60.6 62.6 59.8 64.1 63.7
GDP percapita (US$) 5,348 6,765 9,278 11,977 12,611
3.Share inmmployment (percent)
Agriculture 1.3 0.7 0.3 0.2 ...
Industry 30.3 26.3 29.6 27.5 ...
Manufacturing ... 20.6 22.9 ... ...
Services 68.4 73.0 70.1 72.3 ...
4.School enrolment ratio
Primary 108 115 107 ... ...
Secondary 58 62 ... ... ...
... Notavailable.
Source: World Bank, World Tables, 1994/95; ILO, Yearbook ofLabour Statistics (various issues); andGovernment ofSingapore.
1However, monthly levies areimposed ontheforeign workers inSingapore. These range from S$200 for
skilled foreign workers inthemarine industry toS$450 forforeign workers inthemanufacturing sector (Ministry
ofTrade andIndustry p.21).Singapore WT/TPR/S/14
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Table I.2
Economic performance, 1980-1994
1980-85 1985-90 1991 1992 1993 1994
Growth rates (percent)
1. Real GDP atmarket prices 6.1 7.9 6.7 5.8 13.0 10.1
Private consumption 6.3 11.2 9.2 7.7 11.4 8.4
Government consumption 17.8 3.8 9.7 2.3 12.7 5.6
Gross domestic investment 7.3 7.9 9.2 11.2 20.8 -4.3
Fixed investment 10.0 5.5 17.2 14.5 14.3 10.2
2. Resource balance
Exports ofgoods +non-factor servicesa0.5 16.5 8.1 8.1 11.7 ...
Imports ofgoods +non-factor servicesa-0.8 15.5 6.5 6.9 13.8 ...
3. Competitiveness indicators
Realoutput inmanufacturing/employee
(1987=100)2.8 2.5 3.9 3.4 8.2 ...
GDP deflator (1987=100) 2.8 3.0 3.2 2.0 2.4 ...
Consumer price index (1987=100) 3.2 1.3 3.4 2.3 2.3 3.1
4. Monetary survey
Reserve money (M1) 9.9 9.7 10.6 10.6 8.4 6.2
Broad money (M2) 15.1 14.7 12.3 9.9 9.5 ...
Interest rate Actual rates (percentperannum)
Deposit rate 9.4 5.0 4.7 4.6 2.9 2.3
5. Government finance
Fiscal balance Share ofGDP (percent)
Government current revenue 56.5 83.5 61.8 57.8 57.8 58.8
Government current expenditure 42.9 59.8 40.6 39.7 34.5 28.6
Government capital receipts ... ... ... ... ... ...
Government capital payments 9.0 19.0 0.6 2.0 1.3 4.5
Government surplus/deficit(-) 4.6 4.6 20.5 16.1 22.1 25.6
6. Memorandum:
GDI/GDP 42.3 42.8 46.5 46.5 47.4 50.2
GNS/GNP 40.5 40.8 46.0 47.1 46.0 49.6
... Notavailable.
a Dataforperiods priorto1990arecalculated according tothemethodology ofthefourth edition oftheBalance ofPayments Manual
(BPM4), published bytheIMF. Datafor1990 onwards arebased onthemethodology aspresented inthefifthedition (BPM5).
Thecoverage ofgoods inBPM5 hasbeenexpanded toinclude (a)thevalue ofgoods (onagross basis) received/sent forprocessing
andtheirsubsequent export/import intheformofprocessed goods; (b)thevalue ofrepairs ongoods; and(c)thevalue ofgoods
procured inports bycarriers. InBPM4, thevalue ofprocessing services, repairs ofgoods, andgoods procured inports by
carriers were allincluded under services.
Source: IMF, International Financial Statistics Yearbook, (1995); World Bank, World Tables, (STARS version); andGovernment of
Singapore.WT/TPR/S/14
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8. Theproportion ofSingaporean workers receiving atleastasecondary education increased from
17percentin1970to57percentin1994. Inaddition, theshare oftheSingaporean labour force who
havereceived some form oftertiary education rosefrom 4percentin1970 to27percentin1994.
Nevertheless, theaverage levelofeducation oftheSingaporean work force remains lower thanthat
intheindustrial countries, andtheauthorities areworking toextend school andtertiary education.
9. Total factor productivity growth assumes particular significance inaresource-scarce economy
likeSingapore. Thus, theNational Technology Plan, formulated in1991, setoutdirections forthe
promotion ofresearch anddevelopment toupgrade technology. Theplansought toraisetheamount
ofR&D spending andencourage private sector R&D. According totheauthorities, overall productivity
intheSingapore economy increased by5.4and3.7(predicted value) percent, respectively in1994
and1995. Manufacturing productivity roseby11.4and6.8percentin1994 and1995.
10. Toovercome thelimitations imposed bythesmall sizeoftheisland, reclamation work tolink
uptheseven Southern Islands intothesingle Jurong Island started attheendofthefirstquarter of
1995. TheJurong Island reclamation project willtreble thecombined landareaoftheseven islands
fromthepresent 1,000 hato3,000 ha.Completion istargeted fortheyear2030.2Singapore isalso
aparticipant ina"Growth Triangle" topromote Singapore, Malaysia 'sJohor State, andanumber of
2Singapore Tradenews 1994, p.7.Singapore WT/TPR/S/14
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Indonesian islands asasingle economic unit,thuscombining Singaporean manufacturing skills and
developed infrastructure facilities withthelower landandlabour costs ofitsneighbours.3
11. EnvironmentalprotectionisaccordedhighpriorityinSingapore.Inthisregard,theGovernment
hasoverthelasttwenty years invested heavily intheenvironmental infrastructure, including sewerage
andsolidwaste management systems. Oneofthebasicprinciples ofenvironmental policy istominimize
waste. Alllevels ofpollutants inambient airarecurrently within thestandards oftheWorld Health
Organisation (WHO) andtheUnited States Environmental Protection Agency (USEPA).4Toprepare
forthenextdecade, theGovernment hasprepared theSingapore Green Plan(Box I.1).
12. Singapore enjoys veryhighdomestic savings andinvestment rates(Table I.2). Over thepast
threedecades, ithasbecome thethriftiest country intheworld, withtheratioofgross national savings
(GNS) toGNPreaching arecord levelofalmost 50percentin1994. Although itsrôlehasdiminished
considerably, animportant component ofprivate saving isstilltheCentral Provident Fund (CPF),
acompulsory saving scheme (Box I.2).CPFsavings totalled S$57.6 billion attheendof1994.5Other
factors aretherapid growth inrealprivate disposable income, reduction inthenumber ofyoung
dependents, incombination withconstraints onhousing purchases because oflandshortages andon
motor vehicle purchases forenvironmental reasons. Over therecent years, savings haveexceeded
investment and,while there havebeensubstantial inflows offoreign direct investment, Singapore has
alsobeeninvesting heavily overseas (Chapter III).
13. Worried byasurge inconsumer borrowing in1994, when consumer lending bybanks rose
by47percent,theMonetaryAuthorityofSingapore(MAS)implementedtighterguidelinesonunsecured
loans toindividuals andoncarloans inFebruary 1995. Under theguidelines, banks andfinance
companies maynotgrant unsecured loans toindividuals withanannual income oflessthanS$30,000.
Such unsecured loans cannot exceed twomonths 'income oftheborrower. Loans forcarpurchases
cannot exceed 70percentofthepurchase price ofthecar.
3SeeBoxII.1forfurther details.
4Over thepasttenyears, thelevel ofairpollution hasimproved. Forinstance, sulphur dioxide, nitrogen
oxides, anddustfallout levels decreased gradually inurban areas since 1985 (Department ofStatistics Singapore,
p.23)
5FarEastern Economic Review, 23November 1995.WT/TPR/S/14
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BoxI.1: Singapore Green Plan
TheSingapore Green Plan which wasprepared bytheGovernment ofSingapore setsoutthestrategic
policies thatareneeded tosustain andfurther improve ontheenvironment ofSingapore. Thevision of
theSingapore Green Plan isthatofaGreen City; i.e.acitywith high standards ofpublic health, a
pleasant working andliving environment andwith apopulation thatisenvironmentally conscious and
pro-active.
Theformulation oftheSingapore Green Plan started in1991. Inputs andfeedback from numerous
government agencies, institutions, non-governmental organizations andthepublic were obtained and
assessed. Bytheendof1993, more than 100action programmes hadbeen drawn up. The
implementation ofthese action programmes involved numerous government agencies aswell asmany
non-governmental organizations. Theaction programmes cover sixcoreareas; environmental education,
environmental technology, resource conservation, clean technology, nature conservation and
environmental noise. ASteering Committee comprising senior officials from thevarious government
ministries oversees theimplementation oftheaction programmes.
TheGreen Labelling Scheme, which isvoluntary, waslaunched inMay 1992. Criteria fortheaward of
theright todisplay theGreen Label onaproduct aresetbyanAdvisory Committee. TheGreen Label
forthese products isexpected topromote paper recycling andenergy conservation. Some battery
products withtheGreen Label promote areduction intherelease ofmercury intotheenvironment.
Under theSingapore Green Plan, Singapore plans tomoderate increases inenergy demand byimproving
national energy efficiency. Singapore 'spercapita CO2emission level was1.9tonnes/year in1989. Itis
estimated thatthiswillriseto2.8tonnes/year bytheyear2000. Theaverage percapita CO2emission
level forOECD countries in1989 was3.4tonnes/year. Singapore 'scarbon dioxide emission level is
therefore below theOECD average. Nevertheless, thePlan calls formeasures tobetaken tokeep
Singapore 'scarbon dioxide emission level aslowaspossible. Optimization offuelusetoachieve more
efficient fuelcombustion, prevent heatlossandrecover waste heataswellasbetter maintenance ofmotor
vehicles isexpected toresult infueleconomy andlower CO2emissions.
TheGreen Plan alsoaims toreduce theamount ofdomestic waste from acurrent percapita rateof
1.1kg.perdayto0.9kg.perdaybytheyear2000.
Source: Ministry oftheEnvironment (1993), TheSingapore Green Plan; andtheGovernment of
Singapore.Singapore WT/TPR/S/14
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BoxI.2: TheCentral Provident Fund (CPF)
TheCPF, established in1955, isacompulsory savings scheme which helps thepopulation tosave for
their housing, health careandold-age financial needs. Every employer isrequired tomake monthly
payments intotheCPF onbehalf ofeach ofhisemployees. Employees must alsomake monthly
contributions. On1July1994, employers 'CPFcontributions were raised by1.5percentage points while
employees 'CPF contributions were reduced bythesame amount. With theadjustment, theemployer 's
andemployee 'scontribution rates areeach at20percentoftheemployee 'swages.
InOctober 1993, theCPFBoard liberalized theCPR Investments Scheme togivemembers anadditional
avenue toenhance their old-age savings. Thenewruleincreased theamount thatcould bedrawn from
thefund forinvestment from 40percent to80percent ofgross savings inexcess oftheS$40,000
minimum sum (amount fortheperiod 1July1995 to30June1996) under theBasic Investment Scheme.
Withdrawal upto80percentofsavings inexcess ofS$50,000 toinvest ineight approved instruments is
alsoallowed under theEnhanced Investment Scheme. TheBasic andEnhanced Investment Schemes will
bemerged on1January 1997 tobecome theCPF Investments Scheme. With themerger most investors
willhave more investment instruments tochoose from, thereby giving them more flexibility inenhancing
their retirement savings.
CPF members areallowed towithdraw their CPF savings asalump sumatage55.However, theyare
required tosetaside aminimum sum before making thelump sumwithdrawal. CPF members are
allowed towithdraw monthly amounts from theminimum sum upon reaching theretirement age,
currently at60.Theminimum sumscheme wasrecently revised. With therevision, theminimum sum
wasincreased toS$40,000 effective 1July1995 andsubsequently by$5,000 ayeartoreach $80,000 on
1July2003. By1July2003, halftheminimum sumwillbeincash andtheother halfmaybemetby
CPF members pledging their properties.
Effective 1January 1995, CPF savings maybeinvested through fund managers ofunittrusts andfund
management accounts, under theEnhanced Investment Scheme, inforeign shares andbonds listed inthe
Stock Exchange ofSingapore (SES). Inaddition, CPF savings may alsobeinvested through fund
managers offund management accounts under theEnhanced Investment Scheme inshares listed inthe
Stock Exchange ofMalaysia, Hong Kong, theRepublic ofKorea, Thailand andChinese Taipei.
Thetaxexemption ofCPF contribution mayhave anindirect andpossibly regressive effect onincome
distribution. Thiseffect is,however, limited bythesalary ceiling ofS$6,000 permonth, beyond which
noCPF ispayable. Furthermore, under theCPF Scheme, CPF members areallowed tousetheir CPF
savings tobuyproperties. This hasenabled thevastmajority ofSingaporeans, inparticular, lower
income groups, toownhomes.
Source: Government ofSingapore; andTheAssociation ofBanks inSingapore.
(3) Macroeconomic Policies
14. ThebasicprincipleunderlyingSingapore'sbudgetarypolicyisthatalloperatinganddevelopment
expenditures should bemetentirely fromoperating revenues. Therevenue objective istoraisesufficient
funds tofinance expenditure while maintaining acompetitive taxstructure. Ontheexpenditure side,
efforts aremade tokeep thepublic sector small andefficient, torelease maximum financial and
manpower resources totheprivate sector.WT/TPR/S/14
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15. There arealarge number ofgovernment-owned companies intheindustrial, commercial and
service sectors. Toboost productivity inthese government-linked companies (GLCs),6privatization
hasbeenactively pursued since late1980s. Inthisvein,thePublic Sector Divestment Committee was
formed inJanuary 1986 toidentify andrecommend companies forprivatization. Since 1987, the
Government hasdivested itself ofitsshareholdings in52companies invarious sectors such as
shipbuilding, petrochemicals, telecommunications anddefence-related industries. Ofthese, 15have
beenfloated .7According totheauthorities, theGovernment hasreduced itsshareholdings either fully
orpartially intheother companies through private sale,liquidation ordilution through theissue of
newshares.
16. Over therecent years, rapid economic growth, together withprivatization measures, has
contributed toanincrease inrevenues. Atthesametime, development-related expenditure hasslowed
down; consequently, largebudget surpluses havebeengenerated, particularly since 1990(Table I.2).
In1994, government current revenue amounted to59percentofGDP, while theshare ofgovernment
current expenditure inGDPwasonly29percent. Since 1992/93, partofthesurplus hasbeenallocated
totwofunds -theEdusave Endowment FundandtheMedical Endowment Fund-toprovide educational
enrichment andmedical assistance programmes beyond basicgovernment education andhealth services.8
17. Thebroad structure ofthetaxsystem hasnotchanged markedly overthepasttwodecades,
withabout 37to38percentofrevenue coming fromincome tax.Theshares ofcustoms andexcise
duties, andtaxes onmotor vehicles inthetotalgovernment revenues havedecreased slightly inrecent
years (Chart I.2).However, theshare offeesandcharges hasalmost doubled. Thehighlevelofrevenue
fromfeesandcharges results primarily fromtheuseofthepricemechanism toregulate certain economic
activities suchascharges onautomobile ownership.
18. Acontinuing aimoftaxpolicy hasbeentolower income taxrates, minimizing anydisincentive
effects, while alsoproviding major taxconcessions toattract investment. Thecorporate income tax
ratehasgradually beenreduced toreach 26percentinassessment year1997, andpersonal taxrebates
havebeenmaintained. InApril 1994, theGovernment introduced abroad-based 3percentGoods
andServices Tax(BoxI.3).Toenhance thecompetitiveness ofdoing business inSingapore, theproperty
taxratewasreduced from 16percentto15percentin1994 andagain to13percentinJuly1995.
Theproperty taxhasbeenfurther reduced to12percentwitheffect from 1July1996. Tofurther
encourage hardwork andtoreward talent andenterprise, thetopmarginal taxratewillbereduced
from 30percentto28percentwitheffect from assessment year1997, withreductions intheother
rates.
6Government linked companies (GLCs) areincorporated under theCompanies Act,likeanyprivate sector
company. They areowned bytheGovernment through holding companies, whose main function istoexercise
control over thesubsidiary companies.
7These companies are:DBSLand, Intraco Ltd,Keppel Corporation Ltd. Jurong shipyard Ltd,STCapital
Ltd,Singapore Technologies Aerospace ltd,Singapore Technologies Automotive Engineering ltd,STComputer
Systems andServices ltd,STElectronic andEngineering Ltd,Singapore National Printers Ltd,Singapore
Technologies Shipbuilding &Engineering Ltd,Singapore Technologies Industrial Corporation Ltd,Singapore
Telecommunications Ltd,andSingapore Airlines Ltd.
8TheEdusave Endowment Fund allows students toparticipate inalarger variety ofeducational programmes
tomaximize their potential. TheMedical Endowment Fund isascheme tohelpthose whocannot afford basic
medical care, even withthehelpoftheir relatives (1995 Budget Statement, 1March 1995).Singapore WT/TPR/S/14
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BoxI.3: The1994 TaxRestructuring
About 60percentoftaxrevenues in1990/91-1992/93 came from direct taxation: personal andcorporate
income tax,property tax,andestate duty. Some 40percentofSingapore 'staxrevenue derived from
indirect taxes, comprising customs andexcise duties, motor vehicle taxes, selective consumption taxes,
betting taxes, astamp duty, andother indirect taxes. Theindirect taxbaseisnarrow, withapproximately
twothirds deriving from petroleum products, tobacco, liquor, motor vehicles, andbetting.
On1April 1994, theSingapore Government restructured thetaxsystem byintroducing abroad-based
goods andservices tax(GST). Thedesign oftheGST isthesame asthatofavalue-added tax(VAT).
Itaims foradministrative simplicity andneutrality, withfewexemptions and,apart from zero-rating of
exports, asingle rateof3percent. Exemptions arelimited tofirms with anannual turnover below
S$1million, most financial services, andtherental andsaleofresidential land andbuildings. While
education andhealth services aresubject tothetax,theGovernment isincreasing subsidies onpublic
health andeducation toprevent increases inprices toconsumers.
Reductions inincome taxrates aredesigned toreduce disincentive effects andmaintain theinternational
competitiveness ofSingapore 'staxrates. Thereductions accompanying theGST resulted inmaximum
rates of30percentforpersonal income and27percentforcorporate income. With effect from
assessment year1997, coporate income taxwillbereduced to26percentwhile thetopmargin personal
income taxratewillbereduced to28percent, withappropriate reductions intheother rates.
Source: IMF; andGovernment ofSingapore.
19. Singapore 'smonetary policy targets domestic pricestability andsustainable economic growth.
Overrecent years, theinflation rateshavebeenaround 2to3percent(Chart I.3,Table I.2). Despite
rising unitlabour costs, theappreciating Singapore dollar haslargely eliminated anyriskofimported
inflation.WT/TPR/S/14
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Singapore WT/TPR/S/14
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(4) Balance ofPayments andExchange Rate
20. TheMAS manages theexternal value oftheSingapore dollar against atrade-weighted basket
ofcurrencies. There arenoforeign exchange controls, restrictions oncurrent account transactions,
orforeign exchange surrender requirements. Moreover, there arenorestrictions oncapital transfers
orinvestment either bynon-residents inSingapore orbySingapore residents abroad. However, to
minimise theeffect oflarge, disruptive capital flows, financial institutions granting loans inexcess
ofS$5million tonon-residents, ortoresidents foruseoutside Singapore, must consult theMAS.
21. TheSingapore dollar hasappreciated inrealterms since 1986.9After appreciation in1990,
therealvalue ofthecurrency heldsteady to1993, anditappreciated again in1994 (Chart I.4).
Nevertheless, thevolume ofimports andexports havebothcontinued togrow strongly inthelastyears.
22. Singapore 'strade deficit hasbeenfinanced byasurplus ontheservices account, mainly from
travel receipts, financial services andnetinvestment income receipts. Thus, theoverall current account
hasbeeninsurplus since 1988 andinternational reserves haveincreased steadily (Table I.3).
9WTO Secretariat calculations.WT/TPR/S/14
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Table I.3
Balance ofpayments ofSingapore, 1985, 1990-1995
(S$billion)
1985 1990 1991 1992 1993 1994 1995
Current account 0.0 5.6 8.1 9.1 6.8 17.2 21.4
Trade balance -6.2 -6.7 -4.6 -5.4 -8.0 -0.4 -1.1
Exports (f.o.b.) 47.4 94.5 100.7 104.2 121.4 146.3 164.5
Imports (f.o.b.) 53.6 101.2 105.3 110.6 129.3 146.7 165.5
Services balance 6.7 13.1 13.5 16.4 15.7 20.0 23.7
Unrequited transfers -0.5 -0.8 -0.9 -0.9 -1.0 -1.2 -1.3
Capital account 1.5 7.2 1.3 2.9 -1.7 -13.9 -9.7
Balancing item 1.4 -2.9 -2.1 -2.1 7.1 3.9 0.5
Overall balance 2.9 9.9 7.3 10.0 12.2 7.3 12.2
International reserves 27.1 48.5 55.8 65.8 77.9 85.2 97.3
Source: Department ofStatistics Singapore, Yearbook ofStatistics 1994; andEconomic Survey ofSingapore 1995.
(5) Trade Performance
23. Singapore'smerchandisetradeexperiencedsteadygrowthduring1990-1995.Exports,including
re-exports, increased from S$95 billion in1990 toS$168 billion in1995; domestic exports grew at
anaverage of10.3percentperannum while re-exports roseatanaverage of14.2percentperannum.
Thegrowth inexports hascome onthebackofstrong domestic economic fundamentals andbuoyant
external demand inviewofthesustained recoveries inSingapore 'skeyexport markets andtheboom
inregional economies. Imports alsoincreased steadily, from S$110 billion in1990 toS$176 billion
in1995 (Table AI.1).
(a) Commodity pattern oftrade
24. Inrecent years, theshare ofmineral fuelsintotalimports hasdecreased, while theshares of
machinery andtransport equipment haveincreased (Chart I.5).Major imports in1995wereelectronic
components, crude petroleum, telecommunications equipment, andpartsforoffice anddataprocessing
machines. Theshare ofcrude petroleum intotalimports hasdeclined since 1980. Ontheother hand,
imports ofelectronic valves anddataprocessing machines andparts have increased substantially
(Table AI.1).Singapore WT/TPR/S/14
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WT/TPR/S/14
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25. Thecomposition ofSingapore 'sexports hasprogressively shifted from primary products to
manufactured goods. Inrecent years, theshare ofmineral fuels intotalexports hasdecreased
significantly, mainly duetodepressed oilprices; however, theshares ofmachinery andtransport
equipmenthaveincreased(ChartI.5).Electronicproductsandcomponentshavebecomemoreimportant
thantheywere tenyears ago. Four ofSingapore 'stopfiveexports in1995 were electronic items:
dataprocessing machines, electronic components, partsforoffice anddataprocessing machines, and
telecommunications equipment. By1995, dataprocessing machines hadbecome Singapore 'stopexport
itemandaccounted for17percentofitstotalexports. Incontrast, refined petroleum products have
declined inrelative importance (Table AI.2).10
26. Theshare ofintra-industry trade intotaltrade increased forthepastdecade from56percent
in1985 to72percentin1995(Table AI.3). Essentially, thisreflects thegrowth inbothexports and
importsofelectronicvalves,dataprocessingmachines,andpartsforofficeanddataprocessingmachines.
(b) Regional pattern oftrade
27. Malaysia,Japan,theUnitedStatesandtheEuropeanUnionwereSingapore'sfourmostimportant
trade partners in1995. Trade withMalaysia, inparticular, hasincreased significantly inabsolute as
wellasrelative terms inrecent years (Chart I.6.) Singapore hasrecorded large trade deficits with
Japan.
28. Singapore 'stopfoursources ofimports arealsoJapan, Malaysia, theEuropean Union and
theUnited States. In1994, theyaccounted for21,15,13and15percentofSingapore 'simports.
Theshares ofimports from Japan, Malaysia andThailand increased overthelastfiveyears, while
those oftheUnited States, andSaudi Arabia decreased. Overall, imports from ASEAN countries
amounted tomore than22percentoftotalimports in1995 (Chart I.6).
29. ASEAN isSingapore 'stopexport market, accounting for28percentofitstotalexports in
1995. Thisreflects theclose linkages Singapore haswithitsneighbouring countries andtherôleof
entrepôt trade. Since 1990, Malaysia hasbecome Singapore 'stopexport market (19percentoftotal
exports), overtaking theUnited States (18percent), andtheEU(13percent) (Chart I.6).
30. Theshares ofintra-industry trade withtheother ASEAN countries werelower thanwiththe
restoftheworld overthelast10years (Chart I.7).
10Ministry ofTrade andIndustry (1994), p.90.Singapore WT/TPR/S/14
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(6) Outlook
31. Singapore isalready atlevels comparable tomany developed economies interms ofGDP
percapita, andgrowth ofGDPisamong thehighest intheworld.11TheMAS estimates themedium-
termrateofpotential output growth at7to8percentperannum; despite concerns thatdomestic unit
costsmayrisefollowing threeyears ofstrong growth, theprospects fortheeconomy appear favourable.
32. Inthe1990s, Singapore aimstofurther develop thepopulation 'seducation andskilllevel, and
therange andsophistication ofeconomic activities, andtoimprove thelevelofproductivity andstandard
ofliving.12Toachieve thisgoal, theGovernment plans toinvest heavily ineducation, training and
re-training andaimstoraisetheproportion oftheyoung agegroup withpost-secondary training to
85percentbytheyear2000.13Singapore iscurrently studying theissue ofaccession totheOECD.
11World Economic Forum, (1995).
12SICC(1994).
131995 Budget Statement, 1March 1995.