In the deceptively small city-state of Singapore economic growth and development have turned the country over the years into a powerhouse of the Southeast Asian region. Singapore’s consistently high government revenue, lack of foreign debt, and extremely business-friendly policies are just a few factors that have earned its economy global renown as one of the most advanced economies in the entire world. A relatively secure political climate also contributes significantly to the prosperity Singapore has enjoyed since gaining its independence in 1965.
Today, the prospect of doing business in a stable, progressive economy draws international entrepreneurs and global professionals to Singapore by the thousands each year. Many observers from overseas can’t help but wonder: what exactly makes this country tick? What accounts for its consistent economic strength? Read on for some interesting facts on the Singaporean economy and Singapore politics below:
Strong Manufacturing Industry
Singapore’s manufacturing industry is by far the strongest driver of economic activity, accounting for 20-25% of the country’s annual GDP. At present, Singapore is the world’s 4th largest exporter of high-technology products such as computers, electronics, and pharmaceuticals, as well as products for the scientific, medical technology, and aerospace industries. The country is currently the 5th largest producer of refined oil in the world and also produces 5 of the world’s top 10 drugs.
Singapore’s electronics, logistics, transport, chemicals, and biomedical sciences industries are especially important manufacturing subsectors. Many well-known industrial firms have extensive manufacturing operations in the country, including Micron Technology and the Shell group of companies.
It’s also clear that the Singapore government doesn’t intend to rest on its laurels when it comes to advanced manufacturing. In fact, the government has invested over SGD 3 billion under the Research, Innovation and Enterprise 2020 plan to further elevate the industry over the next five years and to prepare the country for Industry 4.0.
One of the World’s Most Business-Friendly Countries
Singapore has long been recognised internationally as one of the easiest countries in the world to do business in. From 2006 to 2016, the country consistently topped the World Bank’s Ease of Doing Business Index, and it remains a top business destination for foreign entrepreneurs even today. This is in large part due to the abundance of pro-business policies and the significant monetary investment in the business sector courtesy of the government.
Government initiatives to support both local and foreign-owned businesses include a vast variety of grants and incentives. Opportunities are especially abundant for startups in priority industries, as evidenced by the country’s thriving deep tech sector, which has received over SGD 300 million in startup funding over the last few years. The government also maintains a number of well-outfitted regulatory “sandboxes,” test facilities in which companies can develop innovative new products and services with ample protections from financial and logistical risks.
The process of setting up a business in Singapore is also famously transparent, streamlined, and efficient. This process is fully digitised, which enables business owners to prepare and submit the necessary paperwork even before arriving in the country. Registering a company online takes only 15 minutes, by far the fastest business registration time in Southeast Asia. Opening a business in the country, meanwhile, can take as few as 1.5 days and cost as little as SGD 315.
Zero Net Debt
Singapore has been free of foreign debt since 1995. The country’s domestic debt comprises mainly treasury bills, advance deposits from overseas, and registered stocks and bonds. The government does not spend any of its borrowing proceeds but instead invests them. Most importantly, the return on investment (ROI) on these activities has consistently been more than enough to make up for debt servicing costs. Given the above, Singapore actually has no net debt once all of its assets are accounted for.
This policy of strategic borrowing works in concert with carefully crafted macroeconomic policies, robust asset protection, and consistent economic growth. Taken together, all these factors help ensure that Singapore’s government maintains a strong balance sheet with many more assets than liabilities.
Four National Languages
Singapore’s diverse, multicultural population makes it especially welcoming to foreign entrepreneurs and expatriate workers. This reality is reflected in the fact that the country recognises Mandarin Chinese, Tamil, Malay, and English as its official languages. Malay is the official national language, more specifically the standardised Bahasa Melayu, which is spoken by around 13% of Singapore’s population. Singapore’s national anthem, “Majulah Singapurah,” is also written and sung in Malay.
Given the country’s history as a former British colony, Singapore English is based on British English. It is the most widely spoken language throughout the country, serving as the official medium of instruction in schools and a kind of lingua franca in workplaces and public settings. The government’s historical promotion of English was to ensure that the multiple ethnic groups residing in the country would have a common language to communicate in. Today, the prominence of English in Singapore also makes it easy for foreign professionals to integrate smoothly into local communities.
Singapore’s economy has enjoyed a healthy, steady rate of growth for many years, and global financial experts generally agree that this trend doesn’t look to change anytime soon. The island nation is now one of the wealthiest countries in the world and enjoys abundant foreign investment. For this reason, it’s a fertile seedbed of opportunity for foreign professionals in search of the perfect business destination.