singapore economy
TRANSCRIPT
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SINGAPORE
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Background of Singapore
• Singapore was founded as a British trading colony in 1819
• Population: 4,608,595 (July 2003 est.)
• Ethnic Groups:• Chinese 76.7%, Malay 14%, Indian 7.9%, other 1.4%
• Suffrage: • 21 years of age; universal and compulsory
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• Third highest per-capita GDP in the world; in terms of Purchasing Power Parity (PPP).
• Singapore is the 14th largest exporter and the 15th largest importer in the world.
• Singapore ranks as the second freest economy in the world, behind Hong Kong.
• Singapore does not have a minimum wage, believing that it would lower its competitiveness.
• Singapore's largely corruption-free government, skilled workforce, and advanced and efficient infrastructure have attracted investments from more than 7,000 multinational corporations (MNCs) from the United States, Japan, and Europe.
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• Singapore is also the second-largest foreign investor in India. Roughly 44 percent of the Singaporean workforce is made up of non-Singaporeans.
• The Port of Singapore, is one of the five busiest ports in the world.
• Singapore has free trade access to the entirety of the ASEAN network.
• The government also has encouraged firms to invest outside Singapore.
• The World Bank has named Singapore as the easiest place in the world to do business, and ranks Singapore the world's top logistics hub.
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• It is also the world's fourth largest foreign-exchange trading Centre after London, New York and Tokyo.Singapore has four official languages – English, Chinese, Malay and Tamil. English is the preferred language for business and in public administration, making it an attractive place for multinational corporations.
• One of the four Asian Tigers - The Hong Kong, Singapore, South Korea and Taiwan.
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• Singapore's economy depends heavily on exports and refining imported goods, especially in manufacturing, which, and includes significant electronics, petroleum refining, chemicals, mechanical engineering and biomedical sciences sectors.
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• In 2011, Singapore's imports totaled $311.7 billion, and exports totaled $414.8 billion.
• Singapore's main imports are aircraft, crude oil and petroleum products, electronic components, radio and television receivers/parts, motor vehicles, chemicals, food/beverages, iron/steel, and textile yarns/fabrics.
• Singapore's principal exports are petroleum products, food/beverages, chemicals, textile/garments, electronic components, telecommunication apparatus, and transport equipment.
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Main import partners• Malaysia 10.6%• China 10.3%• United States 10.2%• South Korea 6.8%• Japan 6.2%• Indonesia 5.3%• Saudi Arabia 4.5%• United Arab Emirates
4.1% (2012 est.)
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Main export partners • Malaysia 12.2%• Hong Kong 10.9%• China 10.7%• Indonesia 10.5%• United States 5.5%• Japan 4.6%• Australia 4.2%• South Korea 4.0% (2012 est.) *Malaysia was Singapore's main import source, as well as its largest export market, absorbing 12.2% of Singapore's exports.
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Tourism also forms a large part of the economy, and 10.2 million tourists visited the country in 2007. To attract more tourists, the government legalized gambling in 2005 and allowed two casino resorts (called Integrated Resorts) to be developed.
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• Singapore also promotes itself as a medical tourism hub: about 200,000 foreigners seek medical care there each year. Singapore medical services aim to serve at least one million foreign patients annually and generate USD 3 billion in revenue.
• Singapore is an education hub, and many foreign students study in Singapore. More than 80,000 international students studied in Singapore in 2006. In 2009, 20% of all students in Singaporean universities were international students. The students were mainly from ASEAN, China and India.
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• Singapore is considered a global financial hub, with Singapore banks offering world-class corporate bank account facilities.
• Banking in Singapore is a service industry that has grown significantly in recent years. Total banking assets under management in Singapore rose from about $92 billion in 1998 to about $350 billion in 2004.
• Business and banking hours - Generally from 8.30am to 6.00pm (Mondays to Fridays)Banks are generally open from 9.30am to 3pm (Mondays to Fridays) and up to 1.00pm on Saturdays.
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Singapore is a world leader in several economic areas:
• The country is the world's fourth leading financial centre, • the world's second largest casino gambling market, • one of the world's top three oil-refining centres, • the world's largest oil-rig producer, and • a major hub for ship repair services.
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FAST FACT ABOUT THE ECONOMIC GROWTH OF SINGAPORE
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• Singapore's economic strategy produced real growth averaging 8.0% from 1960 to 1999. The economy picked up in 1999 after the regional financial crisis, with a growth rate of 5.4%, followed by 9.9% for 2000.
• Because of the worldwide electronics slump, Singapore had reduced the estimated economic growth in 2001 to a negative 2.0%.
• The Economic Review Committee was set up in December 2001 and recommended several policy changes to revitalize the economy.
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• The economy expanded by 2.2% the following year, and by 1.1% in 2003 when Singapore was affected by the SARS outbreak.
• Subsequently, a major turnaround occurred in 2004 allowed it to make a significant recovery of 8.3% growth in Singapore.
• In 2005, economic growth was 6.4%; and in 2006, 7.9%.
• As of 8 June 2013, Singapore's unemployment rate is around 1.9% and
• GDP $318.9 billion (2011)• GDP growth 5.8% (2013)
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FREE TRADEAGREEMENTS
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Singapore & Japan
• Dec 1999 – Negotiations Began
• Early 2001 – Consensus on FTA was reached• Reduction of tariff and not tariff
barriers.• A mutual recognition of national
standards
• Viewed by many as a possible template for future FTA’s in the region
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• Bulk of Japanese Exports to Singapore Include
• Machinery & Equipment• Business & Financial Services• Chemical & Mineral Products
• Singapore exports to Japan are concentrated in the service sector
Singapore & Japan
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Areas of Trade Customs Automation
Reduction of customs cost on bilateral trade
Electronic Commerce To improve security and harmonize standards governing e-
commerce
Decrease of 1.39% of the average price for e-commerce transactions
Service Trade
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Areas of Trade Service Trade
Liberalization of Service Trade
Elimination of service trade barriers
Lowered the effective price of business and financial services exported from Singapore to Japan by 20.6%, and for construction services the price drop is 29.9%
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Impacts On Free Trade
Singapore:
Higher rates of return on investments
Boost demand for Singapore products
Cost of Investing in Singapore has fallen
Japan:
Minor impact on aggregate output, trade, investment, and GDP
Advantages driven largely by the customs atomization process, which affects cost of trading with all partners
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Other Impacts
All Asian economies gain in terms of GDP Largest impact felt in Malaysia & Thailand
Two countries that do a great deal of trading with Singapore & Japan
Increase in foreign ownership in Singapore is financed by a modest increase in outward foreign direct investment by U.S. and Canada
Many other Asian countries reduce their foreign investment to increase investment in domestic countries.
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The U.S. Free Trade AgreementOvervie
w Signed on May 6,
2003 Focuses mainly on:
services firms
But also touches on: trading of goods protection of
intellectual property rights, and
Protections for investors
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The U.S. Free Trade AgreementTrading of
Services Singapore and The U.S. services firms will enjoy
fair and non-discriminatory treatment in trade, through both: Travel of service professionals across borders, and Establishing a local services presence
Market access commitments apply across a range of sectors, including: Financial services Telecommunications services Tourism Advertising Professional services
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The U.S. Free Trade AgreementTrading of Goods
Most U.S. tariffs on Singaporean goods will be eliminated immediately upon entry into the agreement
Singapore guarantees zero tariffs immediately on all U.S. products
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The U.S. Free Trade AgreementProtection of Intellectual
Property Rights Protection of copyrights, patents,
trademarks, and trade secrets IPR Enforcement
Tough penalties for piracy and counterfeiting Singaporean government guarantees that it
has authority to seize, forfeit and destroy counterfeit and pirated goods and the equipment used to produce them
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The U.S. Free Trade AgreementProtections for
Investors The agreement
provided U.S. investors operating in Singapore with a secure and predictable legal framework
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Objections to Free Trade Less U.S. jobs for U.S. citizens Agreement provides laws that would create what is effectively a
permanent visa worker program for Singapore An increase in the U.S. trade deficit
“The U.S. trade deficit has increased in ever case where the U.S. has entered a free trade agreement with another country.”
~Marcy Kaptur, Congresswoman
FTA with China in 2000: increased 25% to $103 billion NAFTA increased the trade deficit by almost 10 times what it was
before it went into effect, from $9 billion to $87 billion NAFTA also put over a million workers out of jobs due to free
trade The U.S. trade deficit was the largest ever reaching $435.2
billion in 2002
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Other Free Trade Agreements
New Zealand
Australia – October 2002
In the works: Canada
India
Chile
Jordan
South Korea
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Thank You!Q&A
Prepared by:Nana TopuriaMariam OrjonikidzeGvanca QartlelishviliJemal BodokiaGiorgi Lomtadze