International macro economics in todays financial market

International macro economics in todays financial market

For European, non concern minded individual, Singapore sounds like an Asiatic state on the other side of the universe. By and large looked upon as being non a truly affluent state or a still turning state.

This study will seek to convert you of the antonym of all the above mentioned biass. This because none of the above is right, as will come clear from the content of this study. This study will besides seek to convert you of the potency of this state every bit good as the fact that it is the chief gate to Asia. The study itself consists out of 2 parts. The first portion is a general profile of Singapore and the 2nd portion will be more focussed on the concern environment in Singapore.

Picture View from Suisse hotel on Singapore, could be in USA or someplace in Europe…

Beginning: 2010, hypertext transfer protocol: //

A little desk research revealed the followers:

China uses Singapore as an illustration to endeavor for.

Why? Singapore is the cleanest state in the universe ( there are banging mulcts on throwing rubbish on the street or non blushing the public lavatory or even masticating gum! ) , the economical success of Singapore with merely a little surface to construct on,

The biggest cargo port in the universe and the best organized airdromes in the universe all are in Singapore.

Singapore is being looked upon as being the gateway to the remainder of Asia.

Singapore is called the most Westernized state in the whole of Asia.

All of these are indexs that Singapore is non a mini province someplace in Asia but a powerful and economic mini-giant in Asia.

More about this farther in this usher.

This study is chiefly based on statistical information comparing Singapore to the universe, all from statistical studies from the Singaporean authorities every bit good as from the penetrations of Professor Peter Waumans.

Profile of Singapore:

Short Historical Overview

Figuur Lee Kuan Yew in his younger old ages

The modern Singapore was founded on January 29, 1819 by Thomas Stamford Raffles. On 2 August, 1824 it was handed over to the British East Indian Company and became so portion of the British Empire. This lasted until 1955 when the British authorities allowed a general election. This led indirectly to the province going a autonomous province within the Commonwealth on June 3, 1959. The complete independency from the United Kingdom came in 1963. In this same twelvemonth Singapore became portion of the Federation of Malaysia. Due to an statement Singapore was expelled from the federation and gained so its independency. Singapore officially gained its independency on 9 August 1965, when Yusof Bin Ishak was sworn in as President and Lee Kuan Yew became the first Prime Minister of Singapore. Lee Kuan Yew will be Prime Minister until 1990 and will be looked back upon as being the laminitis of the modern Singapore. At this minute the oldest boy of Lee Kuan Yew, Lee Hsieng Loong, is the Prime Minister of Singapore.

Geography and Climate

Singapore consists out of 63 islands, including the mainland Singapore itself.

This figure changes over the old ages as Singapore does a batch of land renewal on the sea and so former islands have been merged into other islands or even the mainland. In the 1960ss Singapore ‘s land country was around 581.5 kmA? , this grew to 710.2 kmA? today and harmonizing to a study from 2005 of the ministry of Environment and Water resources this will mount another 100 kmA? by 2030. So Singapore is non merely turning on an economic graduated table but besides on geographical graduated table.

The land in Singapore is non really fertile as it largely consists out of sand and clay.

The clime in Singapore is tropical, hot and humid. There are two distinguishable monsoon seasons intending in the Northeastern portion there are monsoons from December until March, in the Southwestern portion there are monsoons from June until December. And so there is the inter-monsoon, which often brings electrical storms in the afternoon and early eventide. The temperature varies between 24 and 31 grades Celsius, this during the whole twelvemonth. Humidity varies between 60 and 95 % depending on the season.


Harmonizing to the most recent Singaporean population study, the population counted 5.076.700 people (, September 2010 ) of whom 3.771.700 were Singaporean occupants and 1.31 million non-resident aliens. The population in Singapore is really diverse and multicultural. Most of the population are Chinese ( 74,1 % ) . Others are Malays ( 13,4 % ) , Indians ( 9.2 % ) and others ( 3,3 % ) . It is even so that about 42 % of the population in Singapore are aliens, which means they have non got a Singaporean passport, harmonizing to an UN survey this is the highest per centum in the universe.

The multicultural society makes that there are 4 official linguistic communications in Singapore, being: Malay ( national linguistic communication ) , Mandarin Chinese, Tamil and English. In concern and disposal English is the most used linguistic communication, it is exceeding that another linguistic communication is used.

Other interesting Numberss:

Literacy rate ( occupants +15 old ages, 2009 ) : 96,3 %

Educational degree ( secondary or higher makings ) : 89,6 %

Average old ages of schooling ( non-students, +25yrs ) : 9,7 old ages

GDP per Capita ( 2009 ) : 50.300 US $

(, 2010 )


Singapore is known in Asia as holding one of the most efficient and well-developed substructures. Roadss were built with oculus for the hereafter so commuters could easy travel from place to the metropolis and back. Besides the train system was so equipt that it was easy for the production installations to transport goods to ( air ) ports. Every portion of the substructure was built from a long-run vision and besides careful planning. This was indispensable as the surface to construct was limited.


Changqi Airport is the chief airdrome of Singapore. It is one of the chief air power hubs for going to the Southeast Asiatic part. In 2009 it handled 37,203,978 riders, doing it the 21st busiest airdrome in the universe and for Asia the fifth busiest rider airdrome. Besides in 2009 it handled 1,660,724 metric metric tons of lading ( including theodolite cargo ) , doing it the 11th biggest lading airdrome in the universe.


Singapore has the biggest port in footings of tunnage in Asia, this because the

authorities knew Singapore was a springboard to most of Asia and Oceania. So really interesting for European and American ship paths. The port is equipped to cover with the biggest and most modern vass and this every bit efficient as possible. It is even so that the state is a focal point for more than 200 transportation lines associating the port to over 600 major ports in 123 states.

Picture: Panoramic position of the Singaporean port.

Beginning:, 2010


Picture: Some Singaporean coins & A ; bills

Beginning:, 2010

The currency used in Singapore is the Singaporean Dollar. This is a stable coin which is pegged to the Brunei Dollar. 1 S $ = 0,5738 a‚¬ ( 19/12/2010 )

Business environment:

The old ages before the crisis, economic system in Singapore was dining ( harmonizing to several statistical studies from the Singaporean authorities ( ) , this because of the strategic place the state has ( Singapore is a gate to Asia every bit good as for vass as for companies central offices ) , an first-class substructure, a stable free market economic system but most of all, the long term vision of the authorities.

Since 1986 Singapore has implemented the scheme of “ Entire Business Centre ” . Meaning the authorities started seeking to pull concern central office and besides hi-tech industry from the point of position that Singapore could go an international concern Centre. This scheme was really successful and non merely industry got foot a shore but Singapore gained an of import place in the international services sector. Major Bankss started seting up regional central office. This was the start of international money flows abroad where other endeavors were founded or taken over.

The function of the authorities in these economic developments can non be underestimated in all of this. First of all the luring of international financess, as mentioned above. The policy of the authorities was making a free concern clime with a purely guided labour policy. Meaning the authorities made it comparatively inexpensive, comparing to other states, to put in Singapore but made certainly the labour market was guided from the point of position of the authorities. This was merely possible by maintaining the population tied down with tonss of regulations. Singapore had to go a western-like theoretical account metropolis. The ancient metropolis Centre had to do room for a extremist modern metropolis Centre of skyscrapers. Outside of the centre new edifices were built for the labourers, the “ Housing and Development Board ” including trade name new lanes for fast public conveyance to the metropolis Centre. Nowadays, 90 % of the population lives in these flats.

Economic overview 2010

2008 and 2009 were non easy old ages for Singapore, the international bank crisis and recession struck Singapore rather hard. Particularly because economic system here is based on services and depending on international trade which are two sectors who are extremely capable to an international crisis.

As the graph right of this text shows, after the atrocious twelvemonth 2009, economic system started to retrieve in Q4 of 2009. This tendency was continued at the start of 2010. Underneath an in-depth analysis of the 3rd one-fourth of 2010.

In-depth analysis:

Graph SAAR = Seasonally Adjusted Annual Rate, YOY= Year on twelvemonth ) ( Beginning: hypertext transfer protocol: // ; 2010 )

In Q3 there was a contraction of the economic system, a 18,7 per centum Q-O-Q SAAR after an enlargement of 27,9 per centum in the old one-fourth. This due to an 53,6 per centum autumn in the fabrication sector.

Viewed from 4 chief sectors:

The fabrication sector was to a great extent hit by the closing of several care workss and besides the dip in pharmaceuticals end product. Besides a bead of Electronics production caused this bead in Q3.

The building sector fell by 10,4 percent Q-o-Q SAAR in the Q3. Explanation for this is that merely the private residential building sector in grew. All others like private residential or public residential edifice dropped aggressively.

The services sector grew in Q3 with merely 1,4 percent Q-o-Q SAAR, that after two quarters of growing of dual figures. Clearly reflecting the contractions in several parts in the sector.

And last, the fiscal sector increased with 6,4 percent Q-o-Q SAAR in Q3, besides unusually lower than the 9,7 per centum growing in Q2 but still holding growing. Explainable from the sentiment-sensitive industries who witnessed a tieback.

( Beginning:, 2010 )

Even though the last one-fourth of 2010 was non that positive, the Singaporean authorities and international economic experts from the Financial Times expect that in Q1 of 2011 the terminal of this negative tendency will be reached and from so on overall growing will return in all sectors.

Investing / revenue enhancement inducements

Having no natural resources but with a strategic location and multicultural population, supported by political stableness and sound economic policies to pull new investors, Singapore has been transformed into an industrial and fiscal Centre. All of this makes Singapore what Singapore is today. Singapore, like many other developing states, is to a great extent dependent on foreign capital influxs and to promote these influxs, Singapore provides a huge mixture of inducements based chiefly on considerations such as the entire investing involved, proficient input, export potency, employment chances and conduciveness to the development of industrial and fiscal activity. The cardinal intent in supplying the assorted grants and inducements is to broaden the industrial and fiscal base of Singapore.

Incentives for economic development in Singapore are chiefly revenue enhancement inducements provided under the Economic Expansion Incentives ( Relief from Income Tax Act, Cap 86 ) .

The Economic Expansion Incentives are provided and supervised by the Singaporean Economic Development Board.

An overview of some of import inducements, utile for future investors:

( More inside informations and other specific inducements can be found on hypertext transfer protocol: // )

Regional Headquarters inducement ( RHQ )

Get RHQ position for your concern and bask lower corporate revenue enhancement rates. This inducement can be applied for when pull offing your Asia-Pacific central office activities out of Singapore. These activities include pull offing and commanding their strategic concern planning and development every bit good as selling control, planning, trade name direction and proficient support services. But what is the benefit of it? Well, the Singaporean authorities allows companies to pay a company revenue enhancement rate of 15 % alternatively of 18 % .

International Headquarters inducement ( IHQ )

Lapp as the above mentioned inducement, except direction activities should be conducted oversee every bit good as regional. The concessionary revenue enhancement rate would be lowered to 10 % or lower if IHQ position has been granted.

Development & A ; Expansion Incentive ( DEI )

This inducement provides a lower corporate revenue enhancement rate for a pre-determined period to travel into higher-value-added concern activities in Singapore ( this can be geting new engineerings to develop new merchandises or services ) , give companies the possibility to spread out their operations in Singapore ( this can be used for puting up a new mill or increasing the production capacity ) . The sum of tax write-off one gets depends on the future enlargement programs of the company. The corporate revenue enhancement rate can be set at 10 % or even lower alternatively of the regular 17 % revenue enhancement rate. Note that the part to Singaporean economic system should important plenty to use for DEI.

Investing Allowance ( IA )

Encourages in Singapore registered and based industries to put in new equipment to better efficiency and so introducing new hi-tech engineering into the industry. Based on an external audit study an allowance will be granted on a 5 or 8 twelvemonth base. The per centum depends on the entire cost of the investing and so the per centum depends on this entire investing cost.

Pioneer Incentive ( PC-M or PC-S )

This inducement awards an full corporate revenue enhancement freedom on measure uping net incomes for up to 15 old ages for concerns registered in Singapore. Again to promote growing of high-tech and high value-added fabrication or services in Singapore. Particularly awarded to undertakings that are really strategic and contribute in attractive force of desirable industries in Singapore.

Singapore compared to rest of the universe

Why would one invest in Singapore? And non in any other state? First of all the huge supply of interesting inducements as mentioned in the old chapter but most of all indexs like the easiness of making concern, acquiring building licenses, registering belongings, acquiring recognition, protecting investors, paying revenue enhancements, trading across boundary lines, implementing contracts or even shuting a concern. All of these are indispensable in specifying how interesting it is to put in a certain state.

Making Business – Making difference for enterprisers ( ) , is a company who yearly researches all of the above indexs for 183 states and doing a comparing between all of these economic systems and besides puts them in a ranking. The strategy below gives an overview for all of these indexs from above with the topographic point Singapore is ranked, compared to all other 182 states. As an illustration an European state, Belgium is put following to it to do the efficiency of Singapore clear. The first index, the easiness of making concern is based upon all 9 other indexs.


Rank in Doing Business 2011


Rank in Doing Business 2011


The easiness of making concern



Get downing a concern



Covering with Construction Permits



Registering Property



Geting Recognition



Protecting Investors



Paying Taxs



Trading Across Boundary lines



Enforcing Contracts



Closing a Business



Overall this is a really positive mark for a state. Singapore is one of the lone states who scores this many times in the top 10 of all states for all of these indexs.

To lucubrate on some of these indexs:

( Based upon the information from Making Business 2011 )

Picture Procedures and costs associated with get downing a concern ( Beginning: Doing Business 2011 Report, 2010 )

Singapore scores the fourth topographic point in Get downing a Business, this because it merely takes 3 processs to get down a concern, which would merely be you 4 yearss and this can go on with holding merely 1 SGP $ and all of this can go on online!

Singapore has a batch of inducements and revenue enhancement decreases for concerns which makes Singapore has one of the most competitory revenue enhancement governments. One of the biggest grounds why Singapore scores 4th topographic point for Paying Taxes.

Trading across boundary lines is figure 1 because of the fast handling of goods, necessitating a minimum sum of clip ( 5 yearss for export, 4 yearss for import ) and is one of the cheapest states in the universe to make this.


Before 2009 there were rather some concerns about the year-on-year growing of the Singaporean economic system, the same concerns there still are about the Chinese economic system. The inquiry was if an economic system based largely on international services and international trade would be able to last if international trade would shrivel. Analysts thought this would make an implosion of the Singaporean economic system. But all of this appeared untrue when international trade slowed down due to the international economic and fiscal crisis of 2009.

At this minute Singaporean economic system looks every bit strong as concrete and the lone existent menace is when planetary saltwater degrees would get down lifting.

Opportunity sectors

The Singaporean authorities puts these yearss the accent on ‘high value added and technology-intensive ‘ industries such as the electrical and electronics equipment industries, air power industry, bio-technology/engineering and optical/precision technology merchandises industries. These industries are preferred because they are capital intensive and non labour intensive, so they attract new financess to Singapore. It is the primary aim of the authorities to do Singapore a regional centre for advanced engineering, services and finance.

The undermentioned industries are stated by the Singaporean authorities as chance sectors and it is in these concern sectors concerns are being tried to be attracted by the Singaporean authorities.

Aerospace Engineering

Alternative energy


Consumer concern

Technology services


Environment & A ; Water


Information Technology

International Non Profit Organizations

Logistics & A ; Supply Chain Management

Marine & A ; Offshore Engineering

Media & A ; Entertainment

Medical Technology

Pharmaceuticals & A ; Biotechnology

Preciseness Engineering

Professional Servicess


Emerging Business

The grounds on why these sectors are so of import can be found on


Overall it is clear that Singapore is a turning, unfastened economic system with the focal point on international trade and services and turn out to be capable of lasting the 2009 international fiscal crisis & A ; recession. Singapore is besides ranked on figure 1 for the easiness of making concern, add to this the propinquity of interesting and possible markets in Asia like China, India and others.

If you are looking for a topographic point to set your Asia headquarter or when you are active in one of the industries who are being attracted by the Singaporean authorities it is decidedly deserving sing Singapore.

Research Beginnings

Christiaen, P. ( 2010 ) . Singapore: springplank naar Azie . Wereldwijs: Magzine voor internationaal ondernemen, 4-7.

Government Singapore. ( 2010, February ) . Annual Report 2009-2010. Retrieved November 2010, from Singapore: advancing abroad growing and trade: hypertext transfer protocol: // ! ut/p/c5/04_SB8K8xLLM9MSSzPy8xBz9CP0os3gDCyNf30C_QA9Hg1APFz9ncycjAwgAykdiyrt7w-XJ0G1qbECcbj-P_NxU_YLc0IhyR0VFAH2q-fE! /dl3/d3/L0lDU0lKSWdrbUEhIS9JRFJBQUlpQ2dBek15cXchLzRCRWo4bzBGbEdpdC1iWHBBRUEhLzdfMDgyTU1RTlFIQTBVS

Government Singapore. ( 2010, September 14 ) . Foreign Businesses Puting Up In Singapore. Retrieved November 2010, from Enterprise One: Serving Singapore ‘s Business Community: hypertext transfer protocol: //

Government Singapore. ( 2009, September ) . Population Report 2009. Retrieved October 14-15-16, 2010, from Statisticss Singapore: hypertext transfer protocol: //

Lewis, R. D. ( 2006 ) . When Cultures Collide: prima accros civilizations. Boston: Nicholas Brealey Publishing.

Ministry of Trade and Industry Singapore. ( 2010, November 16 ) . Turning our Economy: Cardinal Economic Indicators. Retrieved November 17, 2010, from MTI: To advance economic growing and create occupations, and so to accomplish a higher criterion of life for Al: hypertext transfer protocol: // id=745

Oligarchen vluchten naar Singapore nut Dirk is niet arm [ het nieuws new wave 529 ] . 529, hypertext transfer protocol: //

Singapore Government. ( 2000, December ) . Literacy Rate 2010. Retrieved November 11, 2010, from Statisticss Singapore: hypertext transfer protocol: //

The World Bank. ( 2010 ) . Ease of making concern in Singapore. Retrieved October/November 2010, from Making Business Measuring Business Regulations: hypertext transfer protocol: //

United Nations. ( 2009, July ) . Trends in international migration stock 2008. Retrieved November 10, 2010, from United Nations: hypertext transfer protocol: //

Assorted. ( 2010 ) . Singapore. Retrieved October 2010, from Wikipedia.

Vlaams Agentschap voor Internationaal Ondernemen. ( 2010, June 26 ) . Marktinformatie Singapore. Retrieved October/ November 2010, from Flanders Investment & A ; Trade: hypertext transfer protocol: // opendocument