Singapore, one of the great trading ports of the British empire, has experienced remarkable economic growth and diversification since 1960. In addition to enhancing its position as a world trade centre, it has developed powerful financial and industrial sectors. Singapore has the most advanced economy in Southeast Asia and is often mentioned along with other rapidly industrializing countries in Asia, notably South Korea and Taiwan. Singapore’s economy always has differed from those of the other Southeast Asian countries in that it never has been primarily dependent on the production and export of commodities.
Economic development has been closely supervised by the Singaporean government, and it has been highly dependent on investment capital from foreign multinational corporations. The government holds about three-fourths of all land and is the chief supplier of surplus capital, which is derived largely from contributions to the Central Provident Fund (CPF) social-security savings program. In addition, the government has attempted to enhance the value and productivity of labour in order to attract investment and boost export competitiveness. This has been accompanied by a strong commitment to education and health. Labour shortages and rising wages have heightened the push for restructuring the economy even more toward higher value-added production.
The rationale for extensive government intervention in economic development has weakened. Official policy relies on market forces, privatization of government enterprise, and more support for domestic private businesses. Union membership has declined as centralized union structures have been replaced by smaller industry- and enterprise-based unions. Greater reliance has been placed on local labour-management negotiations.