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Singapore has a highly developed market-based economy, and is often considered to be a developed nation. It ranks 25th on the Human Development Index which measures standard of living, and second in the Index of Economic Freedom, just behind Hong Kong, which doesn't have national sovereignty. Although Singapore has one of the highest per capita gross domestic products (GDP) in the world, domestic demand is relatively low due to the small population. The economy depends heavily on exports produced from refining imported goods in a form of extended entrepot trade, especially in manufacturing. Manufacturing contributes around 28% to GDP in 2005. The manufacturing industry is today well-diversified with electronics, chemicals, mechanical engineering and biomedical sciences manufacturing. Along with Hong Kong, South Korea and Taiwan, Singapore's fast-paced industrialization earned it a place as one of the four original 'East Asian Tigers'. In 2001, a global recession and slump in the technology sector caused the GDP to contract by 2.2%. The Economic Review Committee (ERC), set up in December 2001, recommended several policy changes with a view to revitalizing the economy. Singapore has since recovered from the recession, largely due to improvements in the world economy; the Singaporean economy itself grew by 8.3% in 2004 and 6.4% in 2005. In the long term, the government hopes to establish a new growth path which will be less vulnerable to the external business cycle, as compared to the current export-led model. However, the government is unlikely to abandon efforts to establish Singapore as Southeast Asia's financial and high-tech hub. The per capita GDP in 2005 was US$26,833 and the unemployment rate was 2.9% in June 2006, up from 2.5% in January the same year. 81,500 new jobs were created from January-July 2006, the highest number in a decade within a 6 month period. The economy is expected to grow by 6.5% to 7.5% in the year 2006, after a 9.4% growth in the first half of Year 2006 (Jan-Jul 2006). Singapore introduced a Goods and Services Tax (GST) with an initial rate of 3% on 1 April 1994. This has substantially increased government revenue by $1.6 billion, stabilizing the government's finances.[26] The government has used revenue from the GST to reorient the economy around services and value added-goods to reduce dependence on electronics manufacturing. The taxable GST was increased to 4% in 2003 and to 5% in 2004. Singapore is a popular travel destination, making tourism one of its largest industries. In 2005, a total of 9.05 million tourists visited Singapore. Much of its attraction can be attributed to its cultural diversity that reflects almost 200 years of colonial history with immigrant cultures originating from Chinese, Malay, Indian, Eurasian and Arab ethnicities. The Orchard Road district, which is dominated by multi-story shopping centers and hotels, is the center of tourism in Singapore. Other popular tourist attractions include the Singapore Zoo and its Night Safari along with the tourist island of Sentosa. To attract more tourists, the government decided in 2005 to legalize gambling and to allow two Integrated Resorts to be developed at Marina South and Sentosa. |
Singapore Information: Inside
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