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COUNTRY PROFILES


PROFILE

Country Facts

Area: 712 sq km (275 sq miles)
Population: 5.18m comprising 3.79m citizens and 1.39 foreign residents (Singapore Department of Statistics 2011)
People: Chinese (76%), Malay (15%), Indians (7%), Others (1%)
Languages: Mandarin, English, Malay and Tamil are the official languages. English is widely spoken and is the main language of communication.
Religions: Buddhism 33%, Taoism 11%, Catholicism 7%, other Christian 11%, Islam 15%, Hinduism 5%, other religions 1%, no religion 17%.
Currency: Singapore Dollar
Major Political Parties: People's Action Party (PAP), Workers’ Party (WP)
Government: Republic and Parliamentary Democracy
Head of State: President Tony Tan Keng Yam
Prime Minister: Lee Hsien Loong
Foreign Minister: K Shanmugam.

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ECONOMY

Basic Economic Facts

GDP (at 2005 market prices): S$284.561bn (2010) (US$230.8bn 2010)
GDP per capita: S$59,813 (US$48,514 2010)
Annual Growth: 14.5% (2010)
Inflation: 2.8% (2010)
Major Industries: Manufacturing (particularly electronics, engineering, biomedical sciences and chemicals), financial and business services, and commerce.

UK Trade & Investment Country Profile: Singapore (http://www.uktradeinvest.gov.uk/ukti/singapore)

Singapore is a model of economic development. From independence in 1965, it achieved almost uninterrupted growth averaging nearly 8% per annum for over three decades. By the 1990s, it had GDP per capita levels similar to many OECD countries and was acknowledged widely as one of Asia's 'tigers'. The contrast between Singapore and some of its regional neighbours is all the more striking given its size and lack of natural resources.
Until recently, Singapore had experienced few periods of economic difficulty. However, it was hit hard in 2001 by a downturn in its key global markets (particularly the US) and a collapse in demand for electronics goods. As a result, it experienced its worst recession since independence: GDP fell 2.4% after growing about 10% in 2000. Although the economy expanded by 4.1% in 2002, Singapore faced the SARS (Severe Acute Respiratory Syndrome) setback in 2003. The government handled the outbreak better than most, but the economic fallout was significant, particularly in the retail, tourism and consumer-services sectors.

Nevertheless, Singapore's economy has remained fundamentally sound. The following few years saw robust growth rates of between 7.3-9.3%, until the onslaught of the current global economic crisis. Given the openness of its economy (Singapore trades over three times its GDP), it was the first country in Asia to fall into recession in the third quarter of 2008.

It has since then staged a remarkable V-shaped recovery, driven by its trade-related sectors. GDP grew an exceptional 14.5% for the full year of 2010 (strongest in 4 decades), making it the 2nd fastest-growing economy in the world after Qatar.

For 2011, the Singapore economy is expected to continue growing but at a more sustainable rate of 5-6%, with services playing a larger role. The first half of 2011 has already seen a moderation of growth to 4.9%. Economic activity is likely to grow modestly in the second half of the year, with the possibility of a technical recession in the third quarter of 2011. Over the medium term, policymakers aim at sustaining annual GDP growth at 3-5%. 2010’s performance is seen as the peak of recovery growth and the pre-crisis rates averaging over 8% from 2004-2007 are not considered sustainable either.

After focusing on growth in the last two years, Singapore is now faced with inflation as its key macroeconomic challenge for 2011. Rising cost pressures led to headline inflation reaching 5.8% in August 2011, the highest since October 2008. This is expected to remain at slightly over 5% in the next few months, and to average between 4% and 5% for the full year of 2011.

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HISTORY

Recent History

The People’s Action Party (PAP) were re-elected in a General Election on 7 May 2011. They won 60.1% of the vote which secured 81 of 87 elected seats in parliament. The opposition Workers’ Party won the other 6 seats. Despite winning their seats Minister Mentor Lee Kuan Yew and Senior Minister Goh Chok Tong resigned from the Cabinet immediately after the General Election.

On 27 August 2011 a Presidential Election took place. Four candidates took part, standing as independent candidates as required by the constitution. Former Deputy Prime Minister Dr. Tony Tan was elected President with 35.2% of the national vote, a mere 7,382 votes ahead of his nearest rival.

Longer Historical Perspective

Singapore’s early history is unclear. In the fourteenth century it was a trading post known as Temasek. Singapore had a very small population at the start of the nineteenth century, with just a few Malay settlements under the rule of the Sultan of Johore. In 1819, Sir Stamford Raffles, seeking a base from which to extend British influence in South East Asia, obtained permission from local rulers to establish a trading post at Singapore, and in 1824 the island was ceded in perpetuity. It was Raffles who laid the foundations of modern Singapore.

In 1826, Singapore joined Penang and Malacca to form the Straits Settlements. Singapore soon became Britain's most important trading centre in the area. In 1867, the Straits Settlements became a Crown Colony. Singapore prospered throughout the nineteenth century, boosted by the opening of the Suez Canal and the gradual extension of British influence throughout the Malay peninsula, to become the commercial and financial hub of South East Asia. Its naval base was one of a chain of British bases from Gibraltar to the Far East. Singapore's population rapidly expanded with the arrival of thousands of Chinese settlers.

Singapore's reputation as a British stronghold did not deter the Japanese from attacking Malaya in 1941 and then Singapore itself, which fell in 1942. British rule was restored in 1945.

In 1946, Singapore became a separate Crown Colony and in 1959, was granted internal self-government. The People’s Action Party (PAP) led by Lee Kuan Yew won an outright majority in the first fully elected Legislative Assembly that year and the PAP has been in power ever since.

In 1963 Singapore, together with the Crown Colonies of Sabah and Sarawak joined the recently independent Federation of Malaya to form Malaysia. Singapore left the Federation in 1965, achieving full independence. There were considerable doubts, on economic and security grounds, about Singapore's ability to survive. The doubts were fuelled by Britain's decision in 1966 to withdraw its bases 'East of Suez' by the mid-1970s, later brought forward to 1971. The British base had made a sizeable contribution to the Singapore economy. Singapore responded with a programme of rapid industrialisation, supported by foreign investment, and the training and regulation of the Singapore workforce. The foundations were laid for Singapore's rapid economic development in the following decades.

PAP control of Singapore continued unchallenged until 1981 when the first post-independence opposition MP was elected. Changes to the Constitution have taken place since then. Grouped Constituencies have been created, in which several seats are won and lost together. Opposition parties are now guaranteed up to nine MPs in parliament, with extra seats granted to the best loosing candidates to make up the number if nine are not elected. These are called Non-Constituency MPs, of which there are currently three. Nine nominated MPs, selected by a panel, also sit in parliament.

Although largely ceremonial, Singapore’s President has a role in safeguarding the national reserves - the so-called 'dual-key' policy. The President is elected in a popular vote.
BBC News Country Timeline: Singapore (http://news.bbc.co.uk/hi/english/world/asia-pacific/newsid_1148000/1148137.stm)

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INTERNATIONAL RELATIONS

Singapore’s foreign policy has been designed to ensure a regional balance. Singapore was a founder member of ASEAN in 1967 and has worked hard to maintain good relations with regional neighbours. It hosted the thirteenth ASEAN summit in November 2007 as ASEAN Chair. Relations with China have intensified following the opening of diplomatic relations in 1990.

Singapore's Relations with the International Community

Singapore is an active player on the world international stage through its membership of the UN, the Commonwealth, ASEAN, APEC, the WTO and the NAM. Singapore served for the first time on the UN Security Council in 2001 and 2002. Prime Minister Goh was the driving force behind biennial Asia Europe Meetings (ASEM). Singapore was one of the five ASEAN countries that participated in the EU/ASEAN Aceh Monitoring Mission. In keeping with Singapore’s position as a trading nation, Singapore is a strong supporter of free trade and uses its membership of APEC and the WTO to press for progress in this area. Singapore was Chair of APEC in 2009. The theme was "Sustaining Growth, Connecting the Region", and focused on facilitating trade and investment in the Asia-Pacific region, as well as measures to support economic growth, address the global economic crisis, accelerate regional economic integration, and resist protectionism.

Singapore's Relations with the UK

The UK co-operates with Singapore on a wide range of international issues. Singapore's first-ever non-permanent membership of the UN Security Council (2001/02) intensified bilateral contacts on key issues affecting international peace and security. The UK and Singapore have also been closely co-operating in the area of counter terrorism and counter proliferation, both politically and operationally.

Defence co-operation with Britain is based on the Five Power Defence Arrangements (FPDA), which involve annual joint exercises with the other partners (Malaysia, Australia and New Zealand), triennial meetings at Cabinet ministerial level and biennial Chiefs of Staffs meetings.

Cultural Relations with the UK

Education links are strong. More than 3,000 Singaporeans are currently studying in the UK and the British Council estimate that around 80,000 UK qualifications are awarded annually in Singapore. Links in the arts are also strong with many British artists and organisations being invited to perform.

The British Council has a large presence teaching English to around 20,000 Singaporeans and foreign nationals. Current British Council projects focus on the internationalisation of education, developing young leaders to take action against climate change and the exchange of knowledge and expertise in the arts and creative industries.

Visits to Singapore

-- January: Sir Peter Ricketts, National Security Advisor
-- February: Martin Donnelly, BIS Permanent Secretary
-- March: John Ashton, FCO Special Representative for Climate Change
-- April: Jeremy Browne, Minister of State at the Foreign and Commonwealth Office
-- June: Dr Liam Fox, Secretary of State for Defence
-- September: HRH The Duke of York

Visits to UK

-- September: Mrs Ow Foong Pheng, Permanent Secretary Singapore Ministry of Trade & Industry

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GEOGRAPHY

The Republic of Singapore lies to the south of the Malay peninsula, to which it is joined by a causeway, 1.2 km long and carrying a road, railway and water pipeline across the Straits of Johor, and a separate link bridge. Situated 1.5 degrees north of the Equator, Singapore occupies a focal position at the turning point of the shortest sea route from the Indian Ocean to the South China Sea. The climate is hot and humid, with no clearly defined seasons although December and January are the wettest months.

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TRADE AND INVESTMENT

Trade and Investment with the UK

Singapore remains the UK’s largest trading partner in Southeast Asia, with two thirds of UK exports to this region flowing into Singapore. UK exports of goods only to Singapore in 2010 were £3.29billion, a 15% increase on 2009. UK imports of goods only from Singapore in 2010 were £3.99billion, an 18% increase on 2009. The top three UK exports of goods to Singapore in 2010 were power generating machinery; beverages; and general industrial machinery. The top three UK imports of goods from Singapore in 2010 were organic chemicals; power generating machinery; and office machines. In 2009, Singapore was the UK’s 11th largest market for services exports (latest figures available).

Bilateral trade relations are excellent: there are few import tariffs and Singapore supports the WTO process fully. Singapore was the first ASEAN country to commence negotiations with the EU for a bilateral Free Trade Agreement (FTA) and both sides are working towards a successful conclusion of talks by the end of 2011.

The UK is the fourth largest foreign investor in Singapore after the Netherlands, US and Japan with cumulative stock of £23.5 billion at end 2009 (Source: Singapore Department of Statistics). This accounts for approximately 20% of total EU investment in Singapore. There are over 31,000 British nationals and some 700 British companies in Singapore. Many of the major long-term British investors have increased their footprint in Singapore recently, including Barclays, Dyson, HSBC, Rolls Royce, Shell and Standard Chartered. There has also been a significant increase in the number of British SMEs entering the market and British universities establishing collaborative partnerships with Singapore’s educational institutions.

The UK attracts over two thirds of all Singaporean investment into the European Union with a cumulative stock of £20.6 billion at end 2009 (Source: Singapore Department of Statistics), with financial and insurance services, real estate and ICT being the most significant sectors.
The World Economic Forum ranks Singapore third in its Global Competitiveness Index and first in its Global Enabling Trade Index 2011. In 2011, for the fifth consecutive year, the World Bank ranked Singapore number one globally for ease of doing business. It was also ranked the fourth largest global financial centre in 2010 and is now the fourth largest foreign exchange trading centre in the world, after London, New York and Tokyo, and a growing Asia-Pacific centre for wealth management.

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POLITICS

Recent Political Developments

Despite a drop in support for the party at the 2011 General Election, the PAP retains an overwhelming majority in parliament. The government is characterised by conservative, but extremely effective flexible management of the economy.

Lee Hsien Loong (son of Lee Kuan Yew, Singapore’s first Prime Minister), succeeded Goh Chok Tong as PM on 12 August 2004. Lee Kuan Yew is still synonymous with Singapore and until recently sat in Cabinet as ‘Minister Mentor’ in the Prime Minister's Office. Lee Kuan Yew’s successor, Goh Chok Tong, also remained in the Cabinet between 2004 and 2011 as Senior Minister.

Elections

General elections were held on 7 May 2011 and the Cabinet was reshuffled on 11 May following the retirement of Minister Mentor Lee Kuan Yew, Senior Minister Goh Chok Tong and several other senior figures. A Presidential Elections was held on 27 August 2011, after which Dr. Tony Tan succeeded S.R. Nathan as President of Singapore on 1 September.

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Last Updated: October 2011

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