Country profile: Singapore

Singapore’s strategic location at the entrance to the Strait of Malacca , through which roughly one-third of global sea commerce passes each year, has helped it become one of the most important shipping centers in Asia. The Port of Singapore, one of the world's busiest in terms of shipping tonnage, is a key component of Singapore’s prosperity and economic health. Singapore is also a leader in new biotechnologies, petroleum refining, and the manufacture of computer components. Recognizing that Singapore’s future growth depends on overcoming energy resource limitations and a small domestic market, the government of Singapore has vigorously encouraged local firms to regionalize their operations and to invest abroad.

The government also has undertaken efforts to attract additional foreign investors to Singapore. China , India , and the fellow Association of Southeast Asian Nations (ASEAN) have been identified as priority countries in Singapore's regionalization drive. During his May 2003 visit to Washington, Former Prime Minister Goh Chok Tong signed a Free Trade Agreement, which came into effect on January 1, 2004, as well as a Memorandum of Intent of Cooperation in Environmental Matters. Trade between Singapore and the United States traditionally has been strong.

The United States is Singapore's second largest trading partner, and Singapore is the United State's eleventh largest export market, receiving $20.6 billion in U.S. exports in 2005. Singapore's economy has recovered from the lingering effects of the 2001-2003 global recession and an outbreak of Severe Acute Respiratory Syndrome (SARS) in 2003 that curbed tourism and consumer spending. In 2005, Singapore’s real gross domestic product (GDP) grew at a rate of 6.4 percent, lower than the 8.4 percent rate in 2004. Economic forecasts suggest Singapore’s real GDP will grow at 5.3 percent in 2006 and 4.9 percent in 2007.