Singapore

Politics:

• Analysis

  Singapore politics: Women gain a foothold in the upper echelons of politics

  On January 14th Halimah Yacob was appointed as Singapore's first female parliamentary speaker-a position that places her at the same level as the chief justice in terms of state protocol. She replaced Michael Palmer, who resigned from the position in December after confessing to having an extramarital affair. On January 26th a by-election was held to fill the Punggol East seat vacated by Mr Palmer, and Lee Li Lian of the Workers' Party won the contest by an impressive margin. Women currently hold slightly over 20% of the seats in parliament. The appointment of Ms Yacob indicates that the ruling People's Action Party (PAP) is making progress, albeit slow, in debunking the perception that there is a "glass ceiling" that prevents women from winning promotion to senior political posts.

  Women have always been underrepresented at the highest levels of government in Singapore. Since the city state gained independence in 1965, only two women, Lim Hwee Hua and Grace Fu, have been full ministers. Ms Lim's tenure at the Prime Minister's Office lasted only two years. She lost her post following the May 2011 general election, when the PAP was defeated in the Aljunied group-representation constituency. Ms Fu assumed the post of minister in the Prime Minister's Office just over a year after Ms Lim's departure, in August 2012. Her father was the press secretary to Singapore's previous prime minister, Lee Kuan Yew.

  After the 2011 election, the PAP did not appoint any women to the cabinet as full ministers. It did, however, pick several, including Ms Fu and Ms Halimah, as junior ministers. On being questioned about the non-inclusion of women in the cabinet, the prime minister, Lee Hsien Loong, said that there was no quota for women in the cabinet but emphasised that if the government found the right candidate it would promote her to the position of minister. He also noted that several female ministers of state had been appointed.

  Damage limitation

  Ms Yacob's appointment as speaker was strategic, being aimed at repairing the political damage caused by the previous speaker's resignation and also earning some goodwill from voters who were disillusioned as a result of the scandal involving Mr Palmer. The new speaker is a widely liked labour leader with a clean political reputation. Ms Yacob's elevation to the position of speaker has gone down well with women's groups and Singapore's Muslim community, and it has also helped the PAP to restore respectability to the position of speaker.

  Ms Yacob was previously minister of state for social and family development, and is known to be committed to promoting women's rights. One of Singapore's most vocal women's groups, the Association of Women For Action and Research (AWARE), said that this was a positive step for women's leadership and political representation in Singapore, but that it was sad to see her step down from her previous job, as she had been a stellar minister and in that role had been deeply committed to promoting the rights and status of women. Ms Yacob has said that she would like to continue her work in social causes and pre-school education, but that these goals would have to be compatible with her duties as speaker.

  Shattering the glass ceiling

  With Ms Fu's addition to the cabinet (even though she has close ties with the ruling elite) and Ms Yacob's appointment as speaker, the PAP has made headway in debunking the perception that there is a "glass ceiling" for women within the party's leadership. The next decisive move in this direction for the PAP would be to promote the other women who are currently junior ministers. The government usually tends to reshuffle the cabinet on a regular basis to refresh itself. In addition, Ms Lee's victory in the Punggol East by-election might prompt cabinet changes. One of her first comments to the media was that she wanted to see more women in politics in Singapore. This is likely to provide the ruling party with food for thought as it analyses its defeat in the by-election.

  January 31, 2013

• Background

  Singapore: Political forces at a glance

  Political outlook: Political forces at a glance

  The People's Action Party (PAP) was elected for another five-year term in May 2011 with around 60% of the popular vote, which gave it a disproportionate 81 of the 87 elected seats in parliament. The opposition parties put in their best performance to date, winning around 40% of the vote. The main opposition parties include the Workers' Party (WP), the Singapore Democratic Alliance, the Singapore Democratic Party and the Democratic Progressive Party. The six parliamentary seats that went to the opposition—all of them won by the WP—mean that there is a record number of opposition legislators in the new parliament. The position of the president is largely ceremonial in Singapore. That said, constitutional amendments made in 1991 gave the president certain reserve powers over government expenditure of financial reserves and appointments to important public offices—responsibilities that the president is expected to retain in the forecast period. The current holder of the post, Tan Keng Yam (known locally as Tony Tan), took office for a six-year term in September 2011. The prime minister, Lee Hsien Loong (the son of Singapore's first prime minister, Lee Kuan Yew), is a powerful voice within the PAP. Members of the Lee family hold several influential positions in Singaporean society.

  Election results since independence
  	Seats won		% of vote
  	PAPa	Opposition	PAPa	Opposition
  1972	65	0	69	21
  1976	69	0	72	28
  1980	75	0	76	24
  1984	77	2	63	37
  1988	80	1	62	38
  1991	77	4	61	39
  1997	81	2	65	35
  2001	82	2	75	25
  2006	82	2	67	33
  2011	81	6	60	40
  a People's Action Party.
  Sources: Ministry of Information and Arts.

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  June 26, 2012

• Structure

  Singapore: Political structure

  Official name

  Republic of Singapore

  Form of state

  Parliamentary democracy

  The executive

  The prime minister and the cabinet are appointed by the president and are responsible to parliament

  Head of state

  The president, Tan Keng Yam (known locally as Tony Tan), took office for a six-year term on September 1st 2011

  National legislature

  Unicameral parliament, which sits for five-year terms. Since the May 2011 general election the legislature has had 87 elected members: 12 members of parliament (MPs) are directly elected from single-member constituencies, and 75 are elected in teams of four to six to represent the 15 group representation constituencies (GRCs). At least one member of any group standing for a GRC must be of non-Chinese ethnicity. Nine nominated MPs and up to nine non-constituency MPs also sit in parliament but have only limited voting rights

  Legal system

  Courts of first instance ultimately lead, on appeal, to the Supreme Court, members of which are appointed by the president

  National elections

  The most recent parliamentary election took place in May 2011, and a presidential election was held in August that year. The next parliamentary election must take place by 2016, and the next presidential poll will be held in 2017

  National government

  The ruling People's Action Party (PAP) won 60.1% of the vote (or 81 seats in parliament) in the 2011 election. The new cabinet was unveiled in May 2011

  Main political organisations

  Opposition: Workers' Party (WP), Singapore People's Party (SPP); Singapore Democratic Alliance (SDA), Singapore Democratic Party (SDP), Democratic Progressive Party (DPP); Reform Party (RP)

  Main members of cabinet

  Prime minister: Lee Hsien Loong

  Prime Minister's Office: S Iswaran

  Deputy prime ministers: Teo Chee Hean

  Tharman Shanmugaratnam

  Key ministers

  Communication & the arts: Yacoob Ibrahim

  Defence: Ng Eng Hen

  Education: Heng Swee Keat

  Environment: Vivian Balakrishnan

  Finance : Tharman Shanmugaratnam

  Foreign affairs: K Shanmugam

  Health: Gan Kim Yong

  National development: Khaw Boon Wan

  National security & home affairs: Teo Chee Hean

  Trade & industry: Lim Hng Kiang

  Transport: Lui Tuck Yew

  Chairman of the Monetary Authority of Singapore

  Tharman Shanmugaratnam

  March 15, 2013

• Outlook

  Singapore: Key developments

  Outlook for 2013-17

  • The Economist Intelligence Unit expects the People's Action Party to remain in power during the forecast period, following its victory in the May 2011 general election.
  • Policymakers will continue to monitor international economic developments closely. Singapore is among the countries in South-east Asia that are most vulnerable to low levels of demand in Western economies.
  • Reflecting prudent spending policies and rising fiscal revenue, Singapore will generate budget surpluses equivalent to 1.1% of GDP on average in 2013-17.
  • Owing to continued global weakness in the near term, Singapore's real GDP will expand by a relatively modest 2.3% in 2013. Boosted by a recovery in external demand, average annual growth will then quicken to 4.4% in 2014-17.
  • Although two major drivers of inflation-namely housing and transport costs-will continue to exert upward pressure on prices in the near term, the annual rate of inflation will slow to an average of 2.7% in the forecast period.
  • The Monetary Authority of Singapore (the central bank) will continue to use the exchange rate as its main policy lever. The Singapore dollar will strengthen in the next five years, helping to reduce inflationary pressures.
  • The current account will remain substantially in the black in the forecast period, owing to healthy surpluses on the merchandise trade account.

  Review

  • The city state witnessed a rare public protest in February in response to a government white paper that sparked concerns about rapid population growth.
  • In February the government presented its budget for fiscal year 2013/14 (April­March), which focused on increasing productivity and reducing dependence on foreign workers. Officials expect another budget surplus in 2013/14.
  • Manufacturing output contracted by 0.4% year on year in January, led by a fall in biomedical manufactures.
  • In December retail sales fell by 1.5% year on year at current prices, following a decline of 1.1% in the previous month. In 2012 as a whole retail sales rose by 2.4%, down from growth of 4.4% in 2011.
  • The annual rate of inflation slowed to 3.6% in January, from 4.3% in December 2012, led by a moderation in house prices.
  • Led by a 3.8% year-on-year increase in non-electronics sales, non-oil domestic merchandise exports (NODX) grew by a marginal 0.5% in January.

  March 15, 2013

Economy:

• Background

  Singapore: Country fact sheet

  Fact sheet

  Annual data	2012a	Historical averages (%)	2008-12
  Population (m)	5.4	Population growth	3.2
  GDP (US$ bn; market exchange rate)	276.5b	Real GDP growth	4.3
  GDP (US$ bn; purchasing power parity)	256.1	Real domestic demand growth	5.2
  GDP per head (US$; market exchange rate)	51,401	Inflation	3.9
  GDP per head (US$; purchasing power parity)	47,606	Current-account balance (% of GDP)	18.6
  Exchange rate (av) S$:US$	1.25b	FDI inflows (% of GDP)	12.8
  a The Economist Intelligence Unit estimates. b Actual.

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  Background: Singapore is an island state located at the tip of the Malay peninsula. It was formerly a British colony and became internally self-governing in 1959. In 1963 Singapore joined the Federation of Malaysia, only to break away and become a fully independent country in 1965. Since then the People's Action Party (PAP), guided by the ideas of the prime minister from 1959 to 1990, Lee Kuan Yew, has dominated politics. The PAP's success has been founded on a combination of economic dynamism and its ability to restrict the growth in support for Singapore's weak and divided opposition parties.

  Political structure: The PAP dominates the single-chamber parliament, with 81 of the legislature's 87 elected members at present. Parliament also includes nominated and non-constituency members. The prime minister and the cabinet are answerable to parliament. The president has little power. The next parliamentary poll is due by 2016, and the next presidential election must be held by 2017.

  Policy issues: Political reform is inching up the agenda as the PAP seeks to maintain its legitimacy against a background of falling support in recent elections, but major electoral reforms are unlikely in 2013-17. The government recognises the need to import labour if the workforce is not to shrink after 2020, but inward migration is unpopular with the public and new restrictions on immigration have been intensified. In February 2013, following the release of a government white paper addressing the issue, the city state witnessed a rare public protest against the administration's proposals. Policymakers succeeded in preventing a deep and prolonged domestic recession in Singapore during the 2008-09 global financial and economic crisis through the use of stimulus measures, but the fact that average inflation is forecast to remain relatively rapid in 2013 makes another big stimulus programme in the short term unlikely. The Monetary Authority of Singapore (the central bank) operates a managed floating exchange-rate regime. Since 201o the bank has pursued a policy of "modest and gradual appreciation" in the Singapore dollar's nominal effective exchange rate in order to help to contain inflationary pressures, the pace of appreciation being adjusted in line with expected trends in inflation.

  Taxation: The corporate tax rate stands at 17%. The top rate of personal tax is 20%. The goods and services tax stands at 7%.

  Foreign trade: Singapore recorded a merchandise trade surplus of US$67.4bn in 2011. Exports grew to US$429.3bn in that year, while imports reached US$361.9bn.

  Major exports 2011	% of total	Major imports 2011	% of total
  Mineral fuels	26.6	Machinery & transport equipment	41.1
  Electronic components & parts	20.7	Mineral fuels	32.6
  Chemicals & chemical products	12.6	Miscellaneous manufactured articles	7.0
  Miscellaneous manufactured products	7.0	Manufactured goods	6.7
  Leading markets 2011	% of total	Leading suppliers 2011	% of total
  Malaysia	12.2	Malaysia	10.7
  Hong Kong	11.0	US	10.7
  China	10.4	China	10.4
  US	5.4	Japan	7.2

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  March 15, 2013

• Structure

  Singapore: Economic structure

  Data and charts: Annual trends charts

  
  

  

  March 15, 2013

• Outlook

  Singapore: Country outlook

  Singapore: Country outlook

  FROM THE ECONOMIST INTELLIGENCE UNIT

  POLITICAL STABILITY: The Economist Intelligence Unit expects the centre-right People's Action Party (PAP) to remain in power in 2013-17 following its victory in the May 2011 general election. Although the PAP secured a huge majority, winning 81 parliamentary seats out of 87, it did so with a smaller share of the popular vote than in the previous poll, at 60.1%, compared with 66.6% in 2006. Despite the handicaps imposed by Singapore's electoral system and limits on freedom of speech and assembly, the opposition managed to triple its representation from only two seats (out of 84) in the previous parliament. The opposition parties also increased their combined share of the vote from 33% to almost 40%. Two PAP cabinet members lost their seats, and for the first time an opposition party, the Workers' Party (WP), won a multi-seat constituency. The PAP has lost two by-elections since the 2011 poll. In the second, held in January 2013, the party lost a seat to the WP. (The first by-election involved a seat that was retained by the WP.) As a result, the PAP now holds 80 seats in parliament.

  ELECTION WATCH: The next parliamentary election is not due until 2016. In the absence of major changes to the political system the PAP, which has ruled continuously for more than 50 years, will continue to dominate politics in Singapore. The government will also maintain strict limits on freedom of speech and assembly, thereby hampering the opposition. To shore up its popularity, the PAP has implemented reforms designed to make it appear less hostile to political pluralism. Ultimately, however, the ruling party appears to be trying to balance two potentially contradictory aims. On the one hand, the reforms can be seen as a tacit acknowledgment by the PAP that it cannot remain overwhelmingly dominant as Singapore becomes a more open and diverse society. On the other hand, the ruling party remains unwilling to allow the opposition to influence significantly the direction of Singapore's political and economic development.

  INTERNATIONAL RELATIONS: Relations with Malaysia-Singapore's closest neighbour-have warmed recently, partly owing to the substantial opportunities that are emerging in the Iskandar Malaysia development zone in the southern Malaysian state of Johor. The area is proving a magnet for investment by Singaporean manufacturers and is acting as a focus for increased collaboration between the two governments. Singapore and Malaysia also announced plans to build a high-speed rail link between Malaysia's capital, Kuala Lumpur, and Singapore that will reduce travel time between the two countries to 90 minutes, from four hours currently. Greater connectivity will promote economic integration, bringing together Singapore's investment and capital and Malaysia's land and other natural resources.

  POLICY TRENDS: In a bid to curb soaring property prices and reduce income inequality, the government announced the introduction of a progressive tax structure as part of the budget for fiscal year 2013/14 (April-March). Tax rates on high-end properties and luxury cars will be raised. In addition, the government recently released a controversial population white paper, which lays out policies designed to stave off the threat to long-term economic prospects posed by a possible contraction in the labour force (owing to demographic factors). According to the document, Singapore's population should rise to 5.8m-6m by 2020 and to 6.5m-6.9m by 2030 in order to achieve the government's targeted rate of economic growth.

  ECONOMIC GROWTH: The Singaporean economy is expected to consolidate its recovery in 2013. We have revised down our GDP forecast for 2013 to 2.3%, from 2.9% previously, as government consumption data for 2012 came in lower than our estimates. (We had estimated a 1.5% contraction in government consumption in 2012 but the actual decline was bigger, at 3.6%.) The city state avoided recession in 2012, with GDP growing by 0.8% quarter on quarter in October-December, following a contraction of 1.2% in the third quarter. In 2013 expansion will be driven by private consumption, which is expected to contribute 1.6 percentage points to GDP growth, and fixed investment, contributing a further 1.7 percentage points. Growth in fixed investment will be supported by public infrastructure projects. We expect exports of goods and services to grow by 1.7% in 2013 as global trade picks up. However, import growth will accelerate to 1.5% in the year as domestic demand strengthens.

  INFLATION: Two major drivers of inflation, namely housing and transport costs, will continue to exert upward pressure on prices in the near term. The rise in transport costs is directly linked to the government's policy of restricting the number of vehicles on Singapore's roads by limiting the supply of car-ownership permits (the prices of which have consequently soared). In the budget for 2013/14 the government introduced higher taxes for luxury cars and tightened car-loan requirements significantly, making vehicles even more expensive. However, in terms of housing costs, official attempts to cool the property market through fiscal and macro-prudential measures appear to be having some effect, with the imputed rents on owner-occupied rental properties falling in recent months. In addition, core inflation (which excludes accommodation and private transport costs) has slowed further, to 1.2% year on year in January, from 1.9% in December. After averaging 4.6% in 2012 as a whole, we expect the headline rate of inflation to come in at 3.8% in 2013. Relatively subdued global commodity prices and a sustained appreciation in the value of the Singapore dollar will contribute to a further moderation in price rises over the remainder of the forecast period, to average 2.5% a year in 2014-17.

  EXCHANGE RATES: As reflected in its monetary policy decision in October 2012, the Monetary Authority of Singapore (MAS, the central bank) will continue to support the steady appreciation of the Singapore dollar, partly in order to counteract imported inflationary pressures. We therefore expect the local currency to strengthen against the US dollar in 2013, to an average of S$1.23:US$1. Assuming that inflationary pressures moderate, the authorities will attempt to bolster the city state's international competitiveness by limiting the pace of the currency's appreciation against the US dollar in 2014-17. The Singapore dollar will nevertheless continue to strengthen gradually, to reach an average of S$1.16:US$1 in 2017. Exchange-rate management could be complicated by factors influencing the values of other currencies. Imbalances in the US and European economies could also lead to periods of turbulence for the US dollar and the euro, in turn causing volatility in Asian currency markets.

  EXTERNAL SECTOR: The current account will continue to post large surpluses in the forecast period, owing to healthy surpluses on the merchandise trade account. Although export revenue will continue to rise, the pace of growth will be modest in the near term as economic activity remains weak in Singapore's major export markets. After sluggish growth in 2013, the import bill will expand strongly in 2014-17 as a result of a steady increase in local demand. The value of exports will continue to exceed that of imports by a wide margin, resulting in a large merchandise trade surplus. The services account will remain in the black in the next five years, boosted by plentiful tourism receipts and strong external demand for the city state's financial services. By contrast, the income account will stay in deficit throughout 2013-17. Income from abroad is forecast to grow as local companies and the MAS enjoy a rise in returns on overseas investments, but income payments will also increase, in line with the profits made by foreign companies with subsidiaries in Singapore.

  March 11, 2013

• Forecast

  Singapore: Country forecast summary

  Country forecast overview: Highlights

  • The political scene in Singapore will remain fairly stable in the next five years. The People's Action Party (PAP) won another huge parliamentary majority at the general election in May 2011 and currently holds 80 of the 87 elected seats in parliament. The Economist Intelligence Unit expects the PAP to remain in power throughout the forecast period.
  • In the short term, there are unlikely to be notable changes to the political system. In the long term, however, the mismatch between the PAP's continued parliamentary dominance and its declining share of the popular vote seems politically unsustainable. Further minor political reforms may be undertaken by the government in 2013-17 as it seeks to address this problem.
  • The threat of a major dispute with a nearby country in the next five years remains small. Singapore's relations with its closest neighbours, Malaysia and Indonesia, should continue to improve. If the domestic political situation in these two countries remains stable, it will be easier for Singapore to resolve more of its prickly and long-running bilateral disputes with them.
  • Policymakers are expected to monitor closely economic developments in the EU, where real GDP is expected to return to growth in the second half of 2013, and  in the US, which is expected to post below-average growth for the third consecutive year. Singapore is among the countries in South-east Asia most vulnerable to weak demand in Western economies.
  • The weak global economic backdrop in 2013 will be partly offset by a continued expansion in intra-Asian trade and comparatively resilient domestic demand. Nonetheless, we expect real GDP growth to remain subdued in 2013, at just 2.3%. In 2014-17 the pace of expansion will accelerate to an average of 4.4% a year, reflecting faster export growth.
  • We forecast that consumer price inflation will average 3.8% in 2013, as currency appreciation and government efforts aimed at curbing inflationary pressures help to offset a renewed upturn in industrial raw materials prices. Price increases are expected to moderate further in 2014-17, averaging 2.5% a year, although inflationary risks will be skewed to the upside.
  • The current account will remain firmly in the black in the forecast period, at the equivalent of 16.8% of GDP on average, owing to healthy surpluses on the merchandise trade and services accounts. The Singapore dollar will remain strong against the US dollar in 2013-17.

  

  March 15, 2013

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Country Briefing

Land area

710.2 sq km (including smaller islands)

Population

5.2m (mid-2011; 3.8m excluding non-residents)

Climate

Tropical

Weather (altitude 10 metres)

Hottest month, May, 24-32°C (average daily minimum and maximum); coldest month, January, 23-30°C; driest month, July, 70 mm average rainfall; wettest month, December, 244 mm average rainfall

Languages

English, Chinese, Malay and Tamil

Measures

The metric system is now predominant

Currency

Singapore dollar (S$); S$1 = 100 cents. Average exchange rates in 2012: S$1.25:US$1, S$1.56:¥100

Fiscal year

April-March

Time

8 hours ahead of GMT

Public holidays

January 1st (New Year's Day); February 10th-11th (Chinese New Year); March 29th (Good Friday); May 1st (Labour Day); May 24th (Vesak Day); August 8th (Hari Raya Puasa); August 9th (National Day); October 15th (Hari Raya Haji); November 3rd (Deepavali); December 25th (Christmas Day)

January 09, 2013