Ageing Population in Singapore Chapter 2: Governance in Singapore.
Singapore Chapter 1 Gp 6
Transcript of Singapore Chapter 1 Gp 6
8/4/2019 Singapore Chapter 1 Gp 6
http://slidepdf.com/reader/full/singapore-chapter-1-gp-6 1/14
CHAPTER-1
ECONOMY OF SINGAPORE-OVERVIEW
8/4/2019 Singapore Chapter 1 Gp 6
http://slidepdf.com/reader/full/singapore-chapter-1-gp-6 2/14
ECONOMY OF SINGAPORE
It has an open business environment, relatively corruption-free and
transparent, stable prices, and one of the highest per-capita gross domestic
products (GDP) in the world.
Its innovative yet steadfast form of economics that combines economic
planning with free market has given it the nickname the Singapore Model.
Exports, particularly in electronics and chemicals, and services provide the
main source of revenue for the economy, which allows it to purchase natural
resources and raw goods which it does not have.
Singapore's largely corruption-free government, skilled workforce, and
advanced and efficient infrastructure have attracted investments from morethan 3,000 multinational corporations (MNCs) from the United States,
Japan, and Europe. Foreign firms are found in almost all sectors of the
economy. MNCs account for more than two thirds of manufacturing output
and direct export sales, although certain services sectors remain dominated
by government-linked corporations.
Manufacturing and financial business services accounted for 26% and 22%,
respectively, of Singapore's gross domestic product in 2000. The electronics
industry leads Singapore's manufacturing sector, accounting for 48% of totalindustrial output, but the government also is prioritizing development of the
chemicals and biotechnology industries.
TAXATION: Singapore introduced a Goods and Services Tax (GST) with
an initial rate of 3% on 1 April 1994, increasing government revenue by
S$1.6 billion (US$1b, €800m) and stabilizing government finance. The
taxable GST was increased to 4% in 2003, to 5% in 2004, and to 7% in
2007.
To maintain its competitive position despite rising wages, the governmentseeks to promote higher value-added activities in the manufacturing and
services sectors. It also has opened, or is in the process of opening, the
financial services, telecommunications, and power generation and retailing
sectors up to Foreign Service providers and greater competition. The
government has also attempted some measures including wage restraint
measures and release of unused buildings in an effort to control rising
commercial rents with the view to lowering the cost of doing business in
Singapore when central business district office rents tripled in 2006.
8/4/2019 Singapore Chapter 1 Gp 6
http://slidepdf.com/reader/full/singapore-chapter-1-gp-6 3/14
GROWTH IN GDP OF SINGAPORE:
Year
GrossDomesticProduct US Dollar
Exchange
Nominal
PerCapitaGDP
PPP
PerCapitaGDP
($millions)
(as % ofUSA)
(as %of
USA)
1980 25,117
2.14SingaporeDollars 39.65 55
1985 39,036
2.20SingaporeDollars 36.63 63.41
1990 66,778
1.81
SingaporeDollars 52.09 74.76
1995 1,19,470
1.41SingaporeDollars 86.14 90.6
2000 1,59,840
1.72SingaporeDollars 66.19 91.48
2005 1,94,360
1.64SingaporeDollars 67.54 103.03
2007 2,24,412
1.42
SingaporeDollars 74.61 107.92
2008 2,35,632
1.37SingaporeDollars 73.71 107.27
2009 2,68,900
1.50SingaporeDollars 78.53 108.33
2010 3,09,400
1.32SingaporeDollars 82.13 119.54
0
1,00,000
2,00,000
3,00,000
4,00,000
1980 1985 1990 1995 2000 2005 2007 2008 2009 2010
8/4/2019 Singapore Chapter 1 Gp 6
http://slidepdf.com/reader/full/singapore-chapter-1-gp-6 4/14
SINGAPORE’S FINANCIAL SYSTEM-WHETHER BANK-BASED/MARKET
BASED?
Total assets under management (DBU & ACU): $1200 billion (data averaged for12 months)
Total assets of DBUs: $785 billion (data averaged for 12 months)
Credit to Non-bank Customers: $326 billion (data averaged for 12 months)
Stock market capitalisation: $800 billion (data averaged for 12 months)
GDP: $303 billion
Banks have two units:1) Domestic banking units (DBU)2) Asian currency units (ACU)
Investment arm of government: TEMASEK HOLDINGS
Government ownership of Banks:Out of top 10 banks in Singapore 3 are Domestic and the rest are Foreign Banks.These top Domestic banks are:
1) DBS (Development bank of Singapore)
2) United Overseas Bank
3) OCBC (Overseas Chinese Banking Corporation)
Government Holdings in DBUs: 27% stake in DBS( 27% OF $34 BILLION)=9.18 BILLION
STATE OWNERSHIP: 0.014 (closer to that of the market-based financialsystems).So effectively there is Low Government stake in Domestic Bankingunits.
INDICATORS OF FINANCIAL STRUCTURE:
STRUCTURAL SIZE: Market capitalisation = 2.453= log 2.453= 0.389
Bank creditLow state ownership of domestic banks indicates that Singapore economy is
essentially a market-based economy
8/4/2019 Singapore Chapter 1 Gp 6
http://slidepdf.com/reader/full/singapore-chapter-1-gp-6 5/14
FINANCIAL SYSTEM OF SINGAPORE:
FINANCIAL INSTITUTIONS
MONETARY AUTHORITYOF SINGAPORE
COMMERCIALBANKS
LOCALBANKS FOREIGN BANKS
FOREIGNFULL BANKS
WHOLESALEBANKS
OFFSHOREBANKS
MERCHANTBANKS
SOVERIGN
FUND OFSINGAPORE
TEMASEKHOLDINGS
ASSOCIALTIONOF BANKS IN
SINGAPORE(ABS)
8/4/2019 Singapore Chapter 1 Gp 6
http://slidepdf.com/reader/full/singapore-chapter-1-gp-6 6/14
STRUCTURE OF FINANCIAL MARKETS:
FINANCIAL INSTRUMENTS TRADED IN THE SINGAPORE MARKETS:
FINANCIALMARKETS
CAPITALMARKET
BONDSMARKET
SINGAPOREGOVERNMENTSECURITIES(ISSUED BYMAC ONLY)
T-BILLS (1-YR.,2-YR.)
GOVERNMENTBONDS
CORPORATE BONDMARKET
SINGAPOREEXCHAGELIMITED
(SGX)
FOREIGNEXCHANGE
MARKET
SIBOR (
SINGAPOREINTERBANKOFFERED
RATE)
SFEMC (SINGAPORE
FOREIGNEXCHANGE
MARKETCOMMITTEE)
COMMODITIESMARKET
FINANCIALINSTRUMENTS
CENTRALPROVIDEN
T FUND
EQUITIES
EQUITYINDEX
FUTURES/OPTIONS
DIVIDEND INDEXFUTURES/OPTION
S
FIXEDINCOME
SECURITIES
CORPORATEBONDS
EXCHANGE TRADED
FUNDS
INTEREST
RATEFUTUR
ES
8/4/2019 Singapore Chapter 1 Gp 6
http://slidepdf.com/reader/full/singapore-chapter-1-gp-6 7/14
FINANCIAL REGULATIONS:
CORPORATE FUNDRAISING
Any public company that desires to have its shares listed on the SGX may apply for a listing
either on the SGX Main Board or on Catalist (formerly SGX SESDAQ). The criteria forlisting are found in the SGX Listing Manual.
FOREIGN EXCHANGE RATE:
Though Singapore maintains a freely floating exchange rate due to the high imports and high
exports (due to Entrepot), monetary authority still interferes whenever the exchange rate
crosses certain limit. So in reality it can be seen as a Managed float or dirty float.
HEDGE FUND REGULATION:
Singapore has stood out from most of the world's other hedge fund centers for its light-touchregistration requirements and relatively benign regulatory climate. Managers serving 30 orless sophisticated investors -- as opposed to retail clients -- can operate without having alicense from the Monetary Authority of Singapore (MAS) regardless of their total level of
assets under management.
This has made it one of the easiest jurisdictions for hedge funds to start up in, attracting morethan 200 funds over the past decade.
SECURITIES REGULATION:
Once a company is listed, it becomes subject to the jurisdiction of the SGX. Timelydisclosure of price-sensitive information is the cornerstone of SGX’s regulatory policy. To
ensure that such information is released to the market on a timely basis, listed companies are
obliged to comply with the SGX’s Corporate Disclosure Policy in Chapter 7 and Appendix
7.1 of the of the SGX Listing Manual
8/4/2019 Singapore Chapter 1 Gp 6
http://slidepdf.com/reader/full/singapore-chapter-1-gp-6 8/14
KEY ECONOMIC AND FINANCIAL INDICATORS:
Items Date of
Latest
Most
Recent
Period
%
Change1
Previous
Period
%
Change2
Gross Domestic Product (GDP)
GDP at Current Market Prices S$m Q1/11 81,192.7 11.2 78,174.0 8.9
GDP at 2005 Market Prices S$m Q1/11 73,323.1 8.371,822.3
12.0
Items Date of
Latest
Most
Recent
Period
%
Change1
Previous
Period
%
Change2
External Trade
Total Trade @ Current Prices S$m Jun/11 82,372.4 5.0 81,605.0 13.5
Total Exports @ Current Prices S$m Jun/11 43,516.9 6.2 42,323.6 9.6
Total Imports @ Current Prices S$m Jun/11 38,855.5 3.7 39,281.4 18.0
Items Date of
Latest
Most
Recent
Period
%
Change1
Previous
Period
%
Change2
Manufacturing
Industrial Production Index (2007=100) May/11 117.4 -17.5 124.8 -9.5
8/4/2019 Singapore Chapter 1 Gp 6
http://slidepdf.com/reader/full/singapore-chapter-1-gp-6 9/14
Items Date of
Latest
Most
Recent
Period
%
Change1
Previous
Period
%
Change2
Employment & Productivity
Employment '000 Mar/11 3, 134.2 3.6 3,105.9 3.9
Unemployment
(seasonally adjusted) (quarterly)
% of labour
forceMar/11 1.9 - 2.2 -
Labour Productivity Growth % Q1/11 4.5 - 7.8 -
Wages/Earnings (monthly
average for the quarter)S$ Q1/11 4,677 8.5 4,474 7.5
back to top
Items Date of
Latest
Most
Recent
Period
%
Change1
Previous
Period
%
Change2
Price Index
Consumer Price Index (2009=100) May/11 107.4 4.5 106.8 4.5
Domestic Supply Price Index (2006=100) May/11 105.5 7.6 108.2 8.0
Items Date of
Latest
Most
Recent
Period
%
Change1
Previous
Period
%
Change2
Services
Retail Sales Index at Current PricES (2010=100) May/11 103.9 10.0 100.1 8.5
8/4/2019 Singapore Chapter 1 Gp 6
http://slidepdf.com/reader/full/singapore-chapter-1-gp-6 10/14
Domestic Wholesale Trade Index at
Current Prices(2007=100) Q1/11 104.6 8.3 101.9 -2.0
Foreign Wholesale Trade Index at
Current Prices (2007=100) Q1/11 118.5 16.8 115.9 17.4
Business Receipts Index (2008=100) Q1/11 110.9 8.2 110.8 9.3
Items Date of
Latest
Most
Recent
Period
%
Change1
Previous
Period
%
Change2
Government Operations
Total Revenue and Grants S$m May/11 8,251.5 - 4,016.1 -
Expenditure & Net Lending S$m May/11 2,965.0 - 4,692.9 -
Deficit (-) or Surplus S$m May/11 5,286.5 - -676.8 -
Total Financing S$m May/11 -5,286.5 - 676.8 -
Domestic Financing S$m May/11 -5,286.5 - 676.8 -
Total Net Borrowing S$m May/11 4,734.5 - 8,500.1 -
Use of Cash
BalancesS$m May/11 -10,021.0 -7,823.3 -
Foreign Financing S$m May/11 0.0 - 0.0 -
Items Date of
Latest
Most
Recent
Period
%
Change1
Previous
Period
%
Change2
8/4/2019 Singapore Chapter 1 Gp 6
http://slidepdf.com/reader/full/singapore-chapter-1-gp-6 11/14
Government Debt
Central Government Debt S$m Q1/11 331,163.0 16.4 321,182.3 10.2
External Debt S$m Q1/11 0 - 0 -
Domestic Debt S$m Q1/11 331,163.0 16.4 321,182.3 10.2
Registered Stocks &
BondsS$m Q1/11 263,376.3 16.4 253,841.3 10.3
Treasury Bills S$m Q1/11 57,900.0 12.0 57,100.0 9.6
Advance Deposits S$m Q1/11 9,886.7 53.5 10,241.0 9.5
Domestic Debt (Excluding
Advance Deposits)S$m Q1/11 321,276.3 15.6 310,941.3 10.2
1 year maturity or less S$m Q1/11 77,015.5 -0.6 80,915.5 10.6
More than 1 year maturity S$m Q1/11 244,260.8 21.8 230,025.8 10.1
Items Date of
Latest
Most
Recent
Period
%
Change1
Previous
Period
%
Change2
Financial Statistics
Money Supply (M1) S$m May/11 121,643.7 19.4 120,955.8 22.0
Money Supply (M2) S$m May/11 422,716.1 10.8 422,475.6 11.0
3-month Interbank Rate % p.a Jun/11 0.44 -0.13 0.44 -0.13
3-month US$ SIBOR % p.a Jun/11 0.25 -0.29 0.26 -0.28
5-year Govt Bonds Interest Rate % p.a Jun/11 0.99 0.23 1.14 0.23
8/4/2019 Singapore Chapter 1 Gp 6
http://slidepdf.com/reader/full/singapore-chapter-1-gp-6 12/14
Exchange Rate
S$ per US$ (as at end-month)S$ per US$ Jun/11 1.2292 -12.3 1.2328 -12.0
back to top
Items Date of
Latest
Most
Recent
Period
%
Change1
Previous
Period
%
Change2
External Accounts
Balance of Payments S$m Q1/11 5,619.5 -73.3 16,476.9 37.5
Imports of goods and
servicesS$m Q1/11 143,489.7 9.5 142,871.4 12.5
Exports of goods and
servicesS$m Q1/11 166,240.7 11.5 164,082.2 11.3
Current Account Balance S$m Q1/11 17,679.9 16.6 15,723.2 0.8
Net Receipts from
Current TransfersS$m Q1/11 -1,837.8 - -1,753.0 -
International Reserves
(increase in assets is
indicated by a minus
[-] sign)
S$m Q1/11 -5,619.5 - -16,476.9 -
Financial Transactions S$m Q1/11 -14,085.9 - 1,491.2 -
Official Foreign Reserves US$m Jun/11 242,286.9 21.2 239,943.2 21.0
THE IMPACT OF THE CRISIS AND THE GOVERNMENT’S RESPONSE
8/4/2019 Singapore Chapter 1 Gp 6
http://slidepdf.com/reader/full/singapore-chapter-1-gp-6 13/14
With the onset of the financial crisis, Singapore experienced a severe economic
downturn, with GDP contracting by 9.5 percent in the first quarter and 3.3 percent in
the second quarter of 2009. This was the sharpest downturn among ASEAN economies,
though more recent data point towards a recovery, with GDP growing by 0.6 percent in the
third quarter of 2009. Singapore is one of the most important economies in ASEAN, withGDP accounting for 12 percent and trade for 28 percent of the group’s total. Its economy is
highly integrated with the rest of global economy and as such was more exposed compared to
many ASEAN Member States to the slowdown in global demand. Singapore attracts 41
percent of all foreign direct investment (FDI) to ASEAN Member States, and its trade to
GDP ratio is around 360 percent, compared with the ASEAN group average of 110 percent.1
Singapore’s economy has been negatively affected by the reduced global demand for
manufacturing exports. The service sectors have also been affected by the sharp contraction
in global and regional finance and by the downturns in intra-Asian trade and tourism.
The Singapore economic downturn varied in degree from sector to sector. As can beseen in Figure 2, output in the manufacturing and, particularly, utility sectors declinedsignificantly, while the agriculture sector has been resilient. While the construction sectorgrew unusually strongly relative to many other countries, the hotel and restaurant sectorshave continued to decline into the second quarter of 2009. Within the manufacturingsector, there were also sharp differences between sub-sectors, with textile, apparel, leatherproduct, and wood product hit most strongly, with reductions in output of between 20 to50 percent. Output declines of this magnitude will have inevitably resulted in job lossesand reduced earnings, and individuals who made their living in these sectors mayexperience significant hardships as a result. In 2008, 19.9 percent of the employed workedin the manufacturing sector, 12.2 percent in construction and 67.3 in the services sector.
1 ASEAN website http://www.aseansec.org/19230.htm.
8/4/2019 Singapore Chapter 1 Gp 6
http://slidepdf.com/reader/full/singapore-chapter-1-gp-6 14/14