SINGAPORE AN ECONOMIC MIRACLE

Marta Zaczyńska

Agenda:

General information

Macroeconomic indicators

Factors determining Singapore’s position

Economic Structure

Government-led clusters

Case study: Maritime cluster

SWOT Analysis

General Information:

Modern city – state on the Southern coast of Malai Peninsula, South-East Asia

Area: 716,1 km²

Population: 5 milions

Society: 74% Chinese decent, 13% Malai decent, 9% Indian decent, 4% other

Religion: Buddhism, Christianity, Islam, Taoism, Hinduism

Language: English, Mandarin, Malay, (unofficial: Singlish)

History and politics:

Independent since 1965

Co-founder of ASEAN

Lie Kuan Yew – the first prime

minister

parliamentary republic with

a Westminster System

Very low corruption and criminal

rate, but also low freedom of

speech and assembly.

Macroeconomic indicators (CIA): GDP (purchasing power parity):

$445.2 billion (2014 est.)

country comparison to the world: 40

GDP - per capita (PPP):

$81,300 (2014 est.)

country comparison to the world: 7

GDP - composition, by end use:

household consumption: 40.7%

government consumption: 10.3%

investment in fixed capital: 23.2%

investment in inventories: 2.7%

exports of goods and services: 190.8%

imports of goods and services: -167.8%

(2014 est.)

GDP - composition, by sector of origin:

agriculture: 0%

industry: 25.3%

services: 74.7% (2014 est.)

Agriculture - products:

orchids, vegetables; poultry, eggs; fish, ornamental fish

Industries:

electronics, chemicals, financial services, oil drilling equipment, petroleum refining, rubber processing and rubber products, processed food and beverages, ship repair, offshore platform construction, life sciences, entrepot trade

Labor force - by occupation:

agriculture: 1.3%

industry: 18.6%

services: 80.1%

note: excludes non-residents (2013)

Unemployment rate:

1.9% (2014 est.)

1.9% (2013 est.)

country comparison to the world: 9

Most important

factors:

key global business,financial hub and one of the most innovation-driven and developed countries in Asia.

the world’s freest, most competitive and business friendly economies, and is currently ranked first in Word Bank’s Ease of Doing Business Index and second in the World Economic Forum’s Global Competitiveness Index.

Improving infrastructure, natural connectivity, skilled workforce, good labour-employer relations, political stability, favourable tax regime, and strong rule of law have all contributed to the country’s competitive advantage.

Economic structure The Singapore economy is primarily

supported by activities in the

manufacturing and services sectors.

Manufacturing activities account for

about a 1/5 of the country’s overall GDP

while the services sectors contribute

approximately 2/3 of GDP. Given its

small domestic market, Singapore has

traditionally relied heavily on foreign

trade, both from port activities as well as

from the exports of electronic

components and refined petroleum and

petrochemical products. For example,

Electronics and Chemicals

manufacturing together accounts for

over 64% of the total manufacturing

output and approximately 38% of the

manufacturing value added in 2011.

Government-led clusters

Significance of Shipping and Sea trade

Shipping is an international and capital intensivebusiness

In today’s interconnected world of commerce, morethan 90% of the world’s trade is carried by sea.

Seaborne trade remains the most energy-efficient andenvironmentally friendly mode of transporting cargo.Without it, half the world would starve and the other half would freeze.

Asian ports hold 39% of world’s maritime trade

Singapore is the second biggest port in Asia, with the prime location in this area.

Case study: Maritime cluster Singapore’s maritime ecosystem comprises over 5,000 establishments employing

from more than 170,000 people, and contributing about 7% of GDP.

Singapore is a premier global hub port, connected to more than 600 ports in

over 120 countries, giving users reliable, value-added and cost-efficient marine

services and facilities.

International Maritime Centre

Interesting data:

At any one time, there are about 1,000 vessels in the Singapore port.

Every 2-3 minutes, a ship arrives or leaves Singapore.

Although Singapore does not produce any oil, it is the top bunkering (ship

refuelling) ports in the world. In 2013, more than 42 million tonnes of bunkers

were lifted in Singapore. This is enough to fill over 17,000 Olympic-sized pools.

About a million visitors cruise into Singapore annually.

Strenghts:

- Prime location for the Asian

market

- Well developed infrastructure:

roads, warehouses, airports

- Major shipping companies

already have their head offices in

Singapore

- Stable political, economic and

social conditions

- Economy open for foreign

investment (FTA)

- Well educated and trained

workforce

- Strong legal system and business-

friendly tax structure

Weaknesses:

- Relatively high costs of operation

(especially land rental and

wages)

- Small geographic space and

domestic market

- Fragmented industry with few

global players

- Lack of a logistics cluster

- Shortage of skilled, experienced

maritime and logistics

professionals

SWOT Analysis of Singapore’s Maritime Cluster

Opportunities:

- Strong growth potential for

Southeast Asia. The growth in

domestic trade in Asia also

boosted Singapore’s contener

traffic.

- Steady growth of Singapore’s

GDP, 5,000 maritime companies,

contributing to 7% of its GDP

- Great reputation of the hub

- Good postion for Asia-Pacific

trade

- Singapore’s offshore trading

companies ($120 bln)

Threats:

- Relocation of global

manufacuring and distribution

base (mainly to China)

- Very strong competitiveness with

the port in Shanghai

- Increase in size of ocean liners

- Singapore’s small territorial waters,

congested waterway and

increasing maritime accidents

SWOT Analysis of Singapore’s Maritime Cluster

Bibliography:

http://www.medtech.sg/singapores-economic-climate-competitive-advantages-in-the-biomedical-sciences/#prettyPhoto

http://en.wikipedia.org/wiki/Singapore

https://www.cia.gov/library/publications/the-world-factbook/geos/sn.html

http://www.economistinsights.com/sites/default/files/downloads/EIU-ATIC_Report2_Web_Revised.pdf

http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2013-14.pdf

http://www.mpa.gov.sg/

https://www.mti.gov.sg/ResearchRoom/Documents/app.mti.gov.sg/data/pages/507/doc/ERC_SVS_LOG_MainReport.pdf