Some Homework on Singapore’s Economy (in 2019)

Googled truths on what Singaporeans sell to keep our economy going.

Nominal Gross Domestic Product (GDP) chart, taken from SingStat website. The vast majority of Singapore’s GDP comes under services production.

If I can be honest about the chances of you carrying out a fun conversation with colleagues using facts about Singapore’s economy? Well, they're low.
 
But as I read more into the topic, it's actually satisfying to learn about Singapore’s globally competitive position in multiple domains. Did you know? The country’s banking sector handles a total asset size of almost US$2 trillion, an amount higher than the nominal national GDP (2019) of at least 180 countries in the world.
 
It’s a good feeling too, to know more about what we’re made of as a nation... What are the biggest building blocks of Singapore’s economy today?

TLDR Answer
 
In 2019, Singapore had a nominal GDP of S$507,568 million (S$507.568 billion)[1], and a per capita nominal GDP of S$88,991 (a number which puts the country in the world’s Top 10).
 
The country’s economy is led by the manufacturing of high-value commodities such as electronics, chemicals and petroleum products. Following this are other major sectors such as financial, insurance and banking services; wholesale and retail trading; and mid to high-value white collar services.

More simply put... We're primarily an advanced manufacturing country, a trading country, and a white collar services country.

[1] https://www.singstat.gov.sg/modules/infographics/economy, SingStat website, accessed on 24 May 2020. 

TLBDR Answer (Too Long, But Did Read)

Image by Michael Schwarzenberger from Pixabay

Manufacturing (20.9% of nominal GDP)
 
Here are the biggest contributors to Singapore manufacturing:

• Computer, Electronic & Optical Products (more than 1/3 of all manufacturing output in 2019)
• Chemicals & Chemical Products (around 13.6% of all manufacturing output)
• Refined Petroleum Products (around 11.8%)
• Other notable mentions include Machinery and Equipment, and Pharmaceutical & Biological Products.

 
So how good is Singapore at manufacturing? We’re near the top in several fields.

• A 2019 article by The Business Times stated that Singapore accounts for 11 per cent of the global market share for semiconductors.
• The Economic Development Board website states that Singapore was the 7th largest exporter of chemicals in 2015, and that Singapore’s chemicals and energy industry ranked among the top 10 globally.[1]
• In 2014, Singapore was one of the top 10 exporters of refined oil products in Asia.
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[1] https://www.edb.gov.sg/en/our-industries/energy-and-chemicals.html, accessed on 24 May 2020.

Image by didier aires from Pixabay

Wholesale & Retail Trade (17.3%)
 
Wholesale trade (a business-to-business goods transaction) and retail trade (business-to-consumers goods transactions) constitute Singapore’s second-biggest GDP segment.
 
The country is considered one of the largest commodity trading hubs in Asia. It is at times also touted by some as Asia's largest oil trading hub.
 
The Port of Singapore currently holds the title as the world’s top transhipment port – an intermediate stop for cargo on its way to another destination – and the second-busiest port globally, after Shanghai.[1]
 
[1] https://atlas-network.com/singapore-largest-transhipment-hub-in-the-world/, accessed on 30 May 2020.

Image by Pexels from Pixabay

Business Services (14.8%)
 
The pot of “Business Services” is hard to visualize intuitively. This is because there is a vast range of activities listed in this category. Business Services has three distinct sections:

• Real Estate Activities – includes real estate development, real estate agent services, operation of serviced apartments, leasing or rental of homes or commercial/industrial spaces by corporations or normal people like you and me. Think names like CapitaLand, City Developments, PropNex, Huttons.

 

• Professional, Science and Technical Activities – most of the jobs here either are, or are at least related to, the careers your parents approve of as acceptable life dreams. Think law, accountancy, architecture, management consultancy, scientific research, geological surveying, advertising and graphic design, engineering design, photography, and veterinary activities.
  
  
• Administrative and Support Service Activities – a wide spectrum of support activities which includes rental and leasing of equipment, travel agencies, security and investigation, cleaning, general office administration (not government-related; see Other Services Industries below) and employment and recruitment agency work.

Image by Pexels from Pixabay

Finance & Insurance (13.9%)
 
This classification deals with services such as those provided by Singapore’s central bank (Monetary Authority of Singapore), commercial banks, pawnshops, stock exchanges, investment funds, and insurance companies.
 
How big is Singapore’s banking and finance sector?

• The Monetary Authority of Singapore website states that Singapore’s banking sector handles a total asset size of almost US$2 trillion, a figure that is higher than the nominal national GDP (2019) of at least 180 countries in the world.[1]
• It was rated as the #2 International Wealth Management Centre in competitiveness and performance by Deloitte International Wealth Management Centre Rankings 2018.[2]
• It is also the third largest foreign exchange centre globally.[3]

 
Other Services Industries (11.3%)
 
This category spans numerous sections in SingStat’s classification: Public Administration and Defence; Education; Health and Social Services; Arts, Entertainment and Recreation; Other Service Activities; and Activities of Households as Employers of Domestic Personnel.
 
A huge proportion of the services here fall under the portfolio of government employees (ministries, stat boards, etc). It is sometimes suggested that the Singapore government is the country’s biggest employer. This assertion is probably true as the list of employees includes every MINDEF full-time soldier, every MOE school teacher, and all your friends in stat boards A to Z.
 
Crucial economy segments that are smaller than you might think
 
Transportation and storage, which includes air transport, sea transport and land transport (for both passenger travel and cargo) and logistics, was 6.7% of 2019 nominal GDP. The construction sector took up 3.7%, and Accommodation & Food Services took up 2.1%.
 
Conclusion
 
Is the economy doing as well as it “should” be doing?  How much of the current success is attributable to the recent generations of leadership, when compared to the strategically laid foundations made decades ago by 1G and 2G leaders and civil servants (e.g. Goh Keng Swee, Philip Yeo) in Singapore’s formative years?
 
Are good plans in place to ride future waves of industry transformation? Or are the industry roadmaps positioning Singapore for a gradual descent to stagnation? Is the wealth being shared fairly among all Singaporeans? I don’t yet know how to answer any of these crucial questions.
 
For now at least, this fact-finding exercise has helped me better understand just how globally competitive our economy has been so far. And I think it’s definitely worth taking a moment to appreciate this part of the country’s success.
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[1] https://www.mas.gov.sg/regulation/Banking, accessed on 24 May 2020.
[2]https://www2.deloitte.com/ch/en/pages/financial-services/articles/the-deloitte-wealth-management-centre-ranking-2018.html, accessed on 24 May 2020.
[3] https://www.mas.gov.sg/development/financial-services-industry-transformation-roadmap, accessed on 24 May 2020.