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Siehe auch ABC Mittagstreffen in Kooperation mit der Fraunhofer-Gesellschaft zu Singapur am 19. April 2001
Adressen
Bayerische Hypo- und Vereinsbank AG
Global Foreign Trade
Herr Michael Bott, Assistant Vice President
1 Finlayson Green 17-01, Singapore 049246
phone: +65 230-0756; fax: +65 230-6538
EMail: michael.bott@asia.hypovereinsbank.com Bayerische Repräsentanzen in Asien
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Repräsentanzen des Freistaates Bayern in Asien: Bayerische Repräsentanzen knüpfen Kontakte zu wichtigen Stellen und helfen Verbindungen zu Ansprechpartnern bei Behörden und Unternehmen herzustellen.
State of Bavaria - Asia Pacific Office
Mr Reinhold Unterburger
55 Market Street; #10-01 Sinsov Building; Singapore 048941
Tel.: 0065-236-09 88; Fax: 0065-236-19 66
EMail: partner@bavaria.com.sg , www.bavaria-asia.com ECONOMY REPORT - SINGAPORE
www.apecsec.org.sg/member/memberecreport/sin.html
GROSS DOMESTIC PRODUCT
The Singapore economy staged a strong recovery in 1999. After an anaemic 0.4
percent growth in 1998, economic output expanded by 5.4 percent in 1999.
Growth was led mainly by the rapid recovery in external demand, which
expanded by 6.7 percent after the 4.4 percent decline in 1998.
The increase in the exports of merchandise goods was led by buoyant
electronics and chemicals exports. With the pick-up in regional demand,
services exports also improved on account of brisker freight and port services
and increased tourist arrivals.
Domestic demand rose by 6.5 percent, reversing the contraction of 7.3 percent
in 1998. This was boosted by the improvement in consumption expenditure on
account of positive consumer sentiments, as well as by the rebuilding of
inventories. Capital spending, however, continued to shrink primarily due to
the slump in private sector construction activity.
From the sectoral perspective, the manufacturing, transport and
communications, and wholesale and retail trade sectors provided the main
impetus for growth. Except for the construction and business services sectors,
the performance of all other major sectors improved in 1999 compared to a
year ago.
Riding on the strength of the global electronics demand and the regional
recovery, the manufacturing sector staged a strong turnaround in 1999 to grow
by 14 percent. The electronics and the chemicals industries chalked up
double-digit growth of more than 20 percent. The former was driven by robust
growth in the telecommunication and semiconductor segments, while the latter
expanded on the back of strong demand for pharmaceutical and
industrial/specialty chemicals from both the US and Europe.
The construction sector contracted by 12 percent in 1999, down sharply from a
growth of 4.4 percent a year earlier. This was expected, given the sharp
decline of 35 percent in contracts awarded in 1998. Construction demand
remained weak in 1999, as contracts awarded fell further by 23 percent to
$11.7 billion, led by a sharp fall in public sector contracts.
The transport and communications sector grew by 7.1 percent in 1999, up from
5.5 percent in 1998. Air cargo and the number of air passengers handled grew
respectively by 17 percent and 8.7 percent, in line with the improvement in
regional trade and tourism. This contrasted sharply with the declines of 3.8
percent and 5.4 percent respectively in 1998. In the sea sub-sector, total sea
cargo handled and total container throughput rose by 4.3 percent and 5.3
percent respectively in 1999, compared with -4.6 percent and 7.1 percent in the
preceding year.
In line with the swift rebound in the domestic and regional economies, the
wholesale and retail trade sector staged a 7.1 percent recovery in 1999,
reversing the 4.1 percent decline in 1998. The upturn in the regional economies
lifted entrepot trade, and was also a major contributing factor behind the 11
percent increase in visitor arrivals. Domestic demand also benefited from the
improvement in consumer confidence. Overall retail sales volume grew by a
robust 17 percent, up from –7 percent in 1998.
Similarly, the recovery in visitor arrivals and improving consumer sentiments
helped the hotels and restaurants sector expand by 3.7 percent in 1999,
reversing the 3.7 percent fall in 1998.
The financial services sector registered flat growth in 1999, compared to -8.1
percent in 1998. The improvement was partly due to the surge in stock market
activity over a large part of the year. Reflecting the more upbeat market
sentiments on the domestic and regional economic outlook, stock market
turnover rose 100 per cent and 110 percent in value and volume terms
respectively. Fund management activity also posted robust growth. However,
other key segments remained weak. Both the domestic and offshore banking
markets contracted in 1999, as loans and advances to both domestic and
regional non-bank customers continued to decline throughout the year. In the
foreign exchange market, the average daily turnover continued to be weak.
The business services sector grew marginally by 0.1 percent in 1999, slower
than the 5.1 percent in 1998. Although computer and related services as well as
the professional services continued to do well, growth was dragged down by the
weakness in real estate services.
INFLATION
The consumer price index registered flat growth in 1999, reversing the decline
of 0.3 percent in 1998. Higher costs of food, miscellaneous items, education
and healthcare outweighed lower costs of housing and transport and
communications.
EMPLOYMENT
The labour market benefited from the upturn in the economy. Total
employment rebounded with a net job gain of 39,900, a sharp reversal from the
net loss of 23,400 jobs in 1998. The employment growth was broad-based
across all major industries, with the exception of the construction sector. With
the pick-up in business demand, the number of retrenched workers shrank by
half to 14,600 from a record of 29,100 in 1998. The manufacturing sector
accounted for 55 percent of the total retrenchment, mainly from the electronics
industry. The relatively higher number of retrenchment compared to pre-crisis
period reflected the continual restructuring and consolidation in certain key
manufacturing segments, notably in the disk drive industry, where margins
have dropped significantly due to keener competition.
Although the quarterly seasonally adjusted unemployment rate was on a
downward trend, easing to 2.9 percent in December 1999 from a high of 4.3
percent in December 1998, the average unemployment rate for the whole year
of 1999 was 3.5 percent, slightly higher than the 3.2 percent in the preceding
year. This was due to the relatively lower unemployment rate in the earlier half
of 1998, before the full effects of the economic crisis were felt in the labour
market.
EXTERNAL TRADE
Singapore’s total external trade rebounded by 8.1 percent in 1999, a sharp
recovery from the 7.5 percent contraction a year ago. Total trade reached $382
billion, back to the level in 1997. Sustained recovery of the crisis-hit Asian
economies, together with the strengthening of global demand for electronics,
telecommunication and chemical products, led to a 17 percent surge in the
second half of 1999, which outweighed a marginal decline of 0.9 percent during
the first half of the year. Total trade in volume terms experienced a similar
sharp rebound, up 7.4 percent, compared to –6.7 percent in 1998. Export
volume rose by 5.4 percent, with domestic exports and re-exports growing by
8.1 percent and 1.6 percent respectively. Reflecting the improved domestic
consumption and increased industrial activity, import volume also expanded by
9.5 percent in 1999.
BALANCE OF PAYMENTS
Singapore’s overall balance of payments recorded a surplus of $7.3 billion in
1999, compared with $5 billion in 1998. The overall balance was boosted by an
increase in the current account surplus to $36 billion, coupled with a smaller
outflow in the capital and financial account. As a result, the official foreign
reserves increased to $128 billion as at end-1999, equivalent to 8.2 months of
current imports
GROSS EXTERNAL DEBT
As at end-December 1999, Singapore did not have any external debt.
FISCAL POLICY
Fiscal policy seeks to create an environment that promotes a dynamic private
sector, generates robust growth and employment, and advances the
development of Singapore. Fiscal policy in 1999 remained geared towards these
objectives, in support of sustained, non-inflationary economic growth.
Government expenditures focus on the delivery of essential public goods and
services, particularly in the key areas of education, housing, economic
infrastructure, basic health care and national security. As in previous years, the
bulk of expenditures in 1999 were allocated to social and community services
(40 percent) and security (34 percent). Economic services accounted for
another 18 percent of total expenditures.
Total government expenditure grew from $24.8 billion in 1998 to $24.9 billion
in 1999. The slight increase was due to higher development spending ($11
billion), which rose by 4.6 percent over 1998. However, operating expenditure
($13.9 billion) declined by 2.3 percent over 1998, partly because of the civil
service wage adjustments in line with the policy of wage restraint.
On the revenue side, the taxation policy in 1999 continued to focus on
enhancing our internationally competitive tax structure to encourage corporate
and individual entrepreneurship. Supported by the pick-up in economic growth,
the government was able to raise sufficient revenue to finance both the
operating and development expenditures. Government operating revenue grew
by 1.4 percent from $28.2 billion in 1998 to $28.6 billion in 1999. The increase
was largely due to increases in income tax, fees and charges, and interest
received as a result of higher outstanding loans from the government to
statutory boards.
Against a more favorable economic backdrop, the budget surplus for fiscal year
1999 (1 April 1999 to 31 Mar 2000) came up to $2.9 billion, or 1.9 percent of
GDP.
MONETARY POLICY
The objective of monetary policy remained one of maintaining price stability
for sustained economic growth. In view of the subdued inflationary
environment and the need to facilitate the recovery in the economy, the
Monetary Authority of Singapore (MAS) adopted a neutral exchange rate policy
stance in 1999. In addition, given that currency markets have become less
volatile compared with the year before, the MAS also narrowed the exchange
rate policy band to its pre-crisis width.
Exchange Rate
The movement of Singapore dollar exchange rate against major industrial and
regional currencies was mixed in 1999. Although it depreciated against the US
dollar in the first half of the year, the Singapore dollar pulled back in the last
two quarters due to the stronger-than-expected domestic economic recovery
and renewed interest in the local bourse. Nonetheless, Singapore dollar
depreciated by an average 1.3 percent against the US dollar in 1999, after the
11 percent depreciation seen the year before. Underpinned by Japan's improved
economic outlook, the Yen had strengthened significantly against major
currencies. Thus the Singapore dollar also weakened against it, by 14 percent in
1999 compared to a depreciation of 4.3 percent in 1998.
On the other hand, the Singapore dollar firmed against most European
currencies in 1999. It strengthened marginally against the Pound Sterling and
the Deutschemark by 1.1 percent and 2.9 percent respectively, in contrast to
the double-digit depreciation in 1998. Against the French franc and Italian lira,
the Singapore dollar appreciated by 3 percent each. Since its introduction in
January 1999, the Euro depreciated by 14 percent against the Singapore dollar.
The Singapore dollar depreciated against most currencies of the ASEAN and NIE
countries. With the economic turnaround and the return to relative stability,
regional currencies rebounded in 1999, following the sharp depreciation
experienced the year before. The Singapore dollar fell by 21 percent against the
Indonesian rupiah, 16 percent against the Korean won, 8.9 percent against the
Thai Baht, and 4.8 percent against the New Taiwan dollar. Against the
Malaysian ringgit, the Singapore dollar depreciated by 4.2 percent compared
with an appreciation of 25 percent in 1998. Given the Hong Kong dollar peg to
the US dollar, the Singapore dollar also weakened against it by 1.1 percent.
Interest Rates
The external interest rate environment was generally tighter in 1999. While the
US Federal Reserve had implemented a series of interest rate hikes over the
year, the European Central Bank and the Bank of England eased rates in the
earlier part of the year before tightening in the later half. Singapore’s 3-month
interbank interest rate reacted to some of these fluctuations. From 1.75
percent at end-December 1998, the benchmark rate ended the year at a
14-month high of 2.63 percent. However, at 2.03 percent on average, it was
lower than the average of 5.18 percent in 1998. It also remained below the
3-month US dollar SIBOR, which was boosted to 6.06 percent at end-December
by the three quarter-point hikes in US interest rates in 1999. However, the
differential between 3-month US dollar SIBOR and the domestic interbank rate
remained largely unchanged at 3.43 percentage points at end-1999 compared
with 3.38 percentage points at end-1998.
Retail deposit and lending rates were stable in 1999. The average prime lending
rate of the leading banks moderated slightly from 5.90 percent at
end-December 1998 to 5.80 percent in January 1999 and remained unchanged
throughout the year. The 3-month and the 12-month fixed deposit rates also
slid marginally to 1.68 percent and 2.46 percent respectively, before remaining
constant from March 1999 to the end of the year.
Money Supply
Growth of narrow money (M1) strengthened in 1999 to 14 percent, compared
with a contraction of 0.9 percent in 1998. The rapid rise in narrow money was
largely due to a 16 percent increase in demand deposits, up from 9.7 percent in
1998. The preference towards holding more readily accessible funds reflected
the low interest rate environment and the pick-up in economic activity. Broad
monetary aggregates, M2 and M3, also expanded, albeit at slower rates of 8.5
percent and 7.3 percent respectively in 1999, compared with 9.7 percent and
8.1 percent in the previous year. The moderation was due to the halving of the
growth of fixed deposits, although savings deposits continued to increase at
double-digit rates in 1999.
OUTLOOK FOR THE SINGAPORE ECONOMY
Global economic conditions have returned to normality in 1999, after the
upheavals and uncertainties in the previous two years. The continued strong
growth in the US, albeit some signs of deceleration in consumer spending, and
the firming of the EU economy have been important. In Asia, the gradual
recovery of the Japanese economy and better than expected growth
performance in China; Hong Kong, China; Korea; and Malaysia also played a
major role.
In view of the favorable external environment, the outlook for the Singapore
economy is bright. Business expectations from the industry and services
providers have also been positive. Going into 2000, the strong global
electronics demand and the revival in intra-Asia trade will help reinforce
Singapore’s economic growth
Taking into consideration the above factors, the official GDP forecast for
Singapore for 2000 is 7.5 percent to 8.5 percent.
Strategies and Adjustment Measures undertaken to Sustain the Recovery
and Strengthen Markets
Cost-Cutting Package
With the regional economic storm now passed, comes the challenge to manage
the recovery and restore economic growth on a sustained basis. While growth
has become broader based and employment is down, the economy still has to
address some weaknesses. For example, several manufacturing industries such
as disk drives and petroleum refining continue to face severe cost pressures.
Continuing restructuring is causing a steady stream of retrenchments.
In light of these developments, the government has reviewed its economic
stance, and particularly the measures in November 1998’s cost reduction
package. In general, the package will continue as committed, but the
tightening labor market has made it necessary to bring forward the restoration
of employer CPF contribution rates. The improved economic outlook also
justifies a higher quantum of year-end bonus for civil servants, and a
restoration of the wage cuts imposed on civil servants. The Skills Development
Levy has been adjusted, as skills upgrading is critical to keeping workers
employable. In key areas of business costs, namely industrial land rentals and
port and airport dues, the rebates have been extended for an additional year.
Deregulation of the Services Sector
The recent regional economic turmoil has altered the backdrop for economic
growth and cost competitiveness. Singapore needs to undertake appropriate
reforms and strategies to remain competitive. One area in which Singapore is
still a laggard is the deregulation of services. Compared to the manufacturing
sector, the services sector is still very much closed and inefficient. However,
the Internet is accelerating the tradability of services, and as a result, the
services sector in every country will increasingly be subject to global rather
than domestic or regional competition. In addition, given the blurring boundary
between goods and services, an efficient and competitive services sector will
be a vital factor contributing to the vibrancy of the manufacturing sector. The
government therefore stepped up the deregulation of the services sector – in
financial services, telecommunications, electricity and gas.
In May 1999, the MAS further unveiled its banking sector liberalization
package, which included measures to allow new entrants into the banking
industry, improve corporate governance, remove the foreign shareholding
limit, and allow for more regulatory flexibility concerning the operations of local
banks. The aim is to move towards a more open and competitive environment,
so as to spur the development and upgrading of local banks, and develop a
more dynamic financial sector.
In February 2000, the Info-Communications Development Authority (IDA)
brought forward the introduction of full market competition in the
telecommunications sector by two years, starting April 2000. Direct and indirect
foreign equity limits for all public telecommunications services licences were
also lifted. An earlier liberalization of the telecommunications sector would
attract major players and help develop a strong and vibrant
info-communications industry, which depends on globally competitive
telecommunication rates and services.
As power is a key component of business costs, Singapore has to be globally
competitive in this sector. Within the next two years, the contestable parts of
the electricity sector will be opened up fully and competition will be introduced
in the natural gas industry.
Committee on Singapore’s Competitiveness
The Committee on Singapore’s Competitiveness (CSC)’s vision is for Singapore
to become an advanced, globally competitive, knowledge economy over the
next decade, with manufacturing and services as the twin engines of growth.
Manufacturing will remain an integral component in the Singapore economy, but
developing capabilities in the whole manufacturing value chain beyond
production, from R&D and design to marketing and sales will also be needed. At
the same time, Singapore will develop into a premier services hub in Asia with
a global orientation, with strong competencies in both our traditional hub
services as well as new, high growth services. The domestic sector will be
competitive and vibrant, capable of producing world-class companies and
internationally competitive industries. The workforce will be cost-competitive
with world-class capabilities in business management, technology, innovation,
production and services, and international market development.
Singapore will become a knowledge-based economy where the basis for
competitiveness will be the capabilities and intellectual capital to absorb
process and apply knowledge and to move quickly. Singapore will be an open
cosmopolitan society, attractive to global talent and connected with other
global nodes. Together with the global talent, a critical mass of risk-taking
entrepreneurs, innovators and arbitrageurs will move the economy ahead in the
Information Age.
Eight Key Strategies Are Recommended To Support Singapore’s
Competitiveness Strategies
1.Manufacturing and services as twin engines
To lessen dependence on any single sector or market, thereby reducing
vulnerability and providing a broader and more resilient economic base.
2.Strengthening the external wing
To add a complementary source of growth to the domestic economy to
help overcome our domestic resource, market and talent constraints.
3.Developing world-class companies
To increase the depth of corporate profile and broaden the economic
base for more sustained and resilient growth.
4.Strengthening the base of local enterprises
To realize their maximum potential and to entrench their relevance as
important strategic partners to MNCs and GLCs in the long run.
5.Human and intellectual capital as a key competitive force
To develop a world-class workforce, comprising domestic and foreign
talent, which is motivated, cost-competitive and with outstanding
capabilities.
6.Leveraging on science, technology and innovation as competitive tools
To upgrade existing industry and business clusters and to build core
capabilities to position Singapore as a global IT hub in the Asia Pacific.
7.Optimizing resource management
To continually optimize the allocation of scarce resources to support the
needs of various industries.
8.Government as business facilitator
To play an active role to support and facilitate the private sector through
provision of sound, consistent economic policies and a regulatory
environment that is conducive to the conduct of business.
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