Singapore TRADE, TOURISM, AND TELECOMMUNICATIONS
Keppel Wharves handled mainly noncontainerized general cargo.
Courtesy Singapore Ministry of Communication and Information
Container handling facilities at the Tanjong Pagar Terminal
Courtesy Singapore Ministry of Communication and Information
Foreign Trade
Trade in goods and services was Singapore's life blood
as truly
in 1989 as it was in the early twentieth century or a
century
earlier when the British East India Company first began
business
there. Trade, along with domestic savings and foreign
investment,
remained key to the country's growth. Singapore
traditionally had
a merchandise-trade balance deficit (in part at least
because food
was imported), which it customarily offset with a surplus
on the
services account (see
table 8, Appendix). It was one of
the world's
few countries where total international trade (domestic
exports and
reexports plus imports) was greater than total GDP. In
1988 trade
(S$167.3 billion) was more than three times GDP (S$48
billion), and
two-thirds of the goods and services Singapore produced
were
exported.
Singapore, however, was more than simply a trade and
manufacturing center in the late 1980s. Trade and
manufacturing
were closely tied to the country's expanding business
services and
international financial market; each enhanced the other.
In
addition to the more than 650 multinational companies that
had set
up manufacturing plants and technical support facilities,
several
thousand international financial institutions, service
companies,
and trading firms also maintained a presence in Singapore.
The
increasing internationalization of the economy and the
continuing
centrality of external trade meant that world trade
fluctuations
and the state of the global economy were significant
factors--
largely out of the country's direct control--in what
happened to
Singapore's trade and wider economy.
As a British colony in the nineteenth and early
twentieth
centuries, Singapore was an entrepôt for the exchange of
raw
materials from Southeast Asia--mainly present-day
Indonesia and
Malaysia--for European merchandise. Newly independent
Singapore's
decision in 1965 to emphasize industrial development and
the
growing success of that plan gradually resulted in a
significant
change in the nature of trade. By the mid-1970s, the
proportion of
reexports and domestic exports had been roughly reversed,
with
reexports accounting for less than 41 percent.
In the 1980s, the somewhat diminished entrepôt trade
remained
important, and Singapore continued to act as a regional
processing
and distribution center. Reexports' share of total exports
averaged
35 percent from 1980 to 1987. Although primary commodities
(crude
rubber, nonferrous metals, and to a lesser extent palm and
coconut
oil) were still a factor in trading activities, machinery
and
transportation equipment dominated (see
table 9,
Appendix).
Singapore also served as a back door to trade with Asian
communist
countries for third countries, such as Indonesia.
Between 1980 and 1984, total exports grew an average of
5.5
percent per year. The strongest impetus came from the
newer
electrical and electronics industries. The trade deficit
declined
steadily after 1982, reflecting lower commodity prices
paid to
foreign producers, greater levels of internal efficiency,
and
industrial upgrading. In 1985, however, total exports
decreased by
2.26 percent. Higher value-added exports declined, both as
a
function of weaker demand and a worldwide saturation in
many areas,
such as computer peripherals. Petroleum exports, still a
major
sector, virtually stagnated.
Trade, along with the rest of the economy, reasserted
itself by
1987, resulting partly from government economic decisions
and
partly as a reflection of rising world commodity prices.
In 1988
Singapore's total trade amounted to about S$167.3 billion
(US$80.8
billion), with a global trade deficit of about S$8.18
billion.
Singapore's GDP grew by 10.8 percent in 1988, the best
growth rate
in fifteen years. Disk drives were the largest non-oil
item
exported, worth S$4.89 billion. Other major exports were
integrated
circuits, data processing equipment and parts,
telecommunications
equipment, radio receivers, clothing, and plastics.
By early 1989, signs of slowing down and leveling off
had
appeared with the first export declines in eighteen
months.
Analysts agreed the weak external demand for electronics
and
computer parts resulted, in part, from an oversupply on
the world
market of disk drives, semiconductors, and related items.
Imports
surged, however, widening the trade deficit sharply (see
table 10,
Appendix).
Although their volume was not large, food products were
a
significant aspect of Singapore's trade. The urban nation
produced
only a small proportion of its own food
(see Agriculture
, this
ch.), requiring it to import large quantities. Some food
products,
such as soy sauce and juices, were processed in Singapore
for
export, and Singapore continued its historical role as the
regional
center for the spice trade.
Data as of December 1989
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