Singapore is often cited as the global benchmark for economic reform that has raised a small island nation, from the poorest countries in the world to a world leader. At one time, part of the British Empire, then the Malay Federation, from which the island was excluded because the Chinese had a dominant position in business, now Singapore in terms of per capita GDP has bypassed both of these countries.
History of success
On this territory, the world's freest economy, with virtually no corruption and with a low degree of unemployment. The path to success was difficult and unlikely to be repeated by other countries of the world, since few would be allowed to use the “Bolshevik” methods of achieving success.
After independence, the country remained with a small domestic market and a hostile attitude of the former metropolis. It was then that a policy was adopted aimed at attracting foreign investment, the growth of export industries and state-owned companies in strategic industries.
This allowed Singapore to reach 41 places in the world in terms of GDP, which is a huge achievement for a small country. Prime Minister Lee Kuan Yew - the author of this strategy that led the country to success - is considered one of the most successful statesmen in the world. As he himself wrote, he practically manually led the first global corporations to Singapore, sometimes hatching for hours at the reception offices of their leaders. And now more than 3, 000 global corporations are working here.
Singapore is an example of the most successful use of geography. Located at the historic crossroads of sea lanes, the country began to develop oil refining to supply its products to its neighbors. Now this small island is the third center in the world for the processing of petroleum products, not having any of its hydrocarbon deposits.
Services related to shipping (logistics, insurance, financing, warehousing and storage, re-export), as well as tourism and recreation, account for about 70% of Singapore’s GDP.
The country receives 6-8 million tourists annually, with a population of 4.5 million. Most of its citizens are directly or indirectly involved in business activities and more than 75% own shares of various enterprises.
The state is one of the most friendly with respect to small business, more than 25% of Singapore's GDP is created in this sector. A developed business infrastructure, an excellent financial, tax and legal system along with the stability of the political system have attracted several thousand corporations to the country.
Some macroeconomic indicators
The country showed steady economic growth for 39 years at an average of 8% per year, from 1960 to 1999. After the global financial crisis in Singapore, GDP growth was uneven - from minus 2% to 9.9%, which was mainly due to extraordinary circumstances, from falling demand for electronics to an epidemic of atypical pneumonia. Still, the economy, for the most part, grew.
Between 2010 and 2016, Singapore’s GDP grew by more than 25%. Foreign trade provides the bulk of state revenues, the country ranked 13th in the world in terms of exports and 16th in terms of imports.
The unemployment rate has long been at 2%. Inflation over 7 years was less than 3%, and in recent years, prices have begun to decline: in 2015 - minus 0.5%, and in 2016 - minus 0.3%.
Singapore ranks second in the world in terms of financial market development. The strengths of the banking system are the availability of credit and the stability of the banking system. About 700 financial organizations work in the country, including 122 banks, including 116 foreign ones.
Initially, the entire economy of the country was export-oriented, so that it consistently has a positive trade balance. However, due to the fact that the state has practically no resources other than labor, Singapore imports a lot of materials and components. Singapore's exports in 2016 amounted to $ 353 billion, and imports - $ 297 billion.
The main export products are consumer electronics, information technology, consumer goods, petroleum and rubber products. Electronics takes up about 48% in exports. The main partners are China, Hong Kong and Malaysia.
The main imports are airplanes, raw materials and components: crude oil, electronic components and chemical products. The main suppliers are China, USA and Malaysia.