Singapore Energy and Security

By | June 1, 2022

Economy, energy and environment

The secondary sector is an important source of employment for Singaporean citizens, despite the fact that services contribute most to the national GDP. The industry is mainly developed for electronics, which make up a large share of exports to developed countries, and the pharmaceutical sector. Given its size, Singapore has invested in its position at the eastern outlet of the Strait of Malacca: exports, which are often re-exports, are one of the two crucial items among the factors affecting GDP. The excellent infrastructures contribute to this figure, including the port of Singapore, the second largest in the world for freight traffic, and Changi International Airport, one of the largest in the world for number of passengers.

The second voice in Singapore’s economy is its attractiveness as a financial center. A true Asian commercial hub, the island state presents advantageous conditions not only for the moderate tax regime and state incentives but also for the efficient legal system and the good level of banking secrecy. While feeling the effects of the crisis of 2008-09, the area resumed growth in 2010 with a 14.5% increase in GDP. Growth settled at 1.3% in 2012 and maintained a low recovery rate (1.7%) also in 2013, but increased in 2014 to 3.5%. The government aims to leverage leverage based on currency trading rather than net gains from interest rates. It should be noted that Singapore’s contribution to the World Bank, today one of the largest, was increased in 2014 to 672 million dollars with a substantial contribution to the reconstruction and development fund. In its version updated to 2014, the Doing Business ranking, drafted by the World Bank, has put Singapore back in first place for the third year in a row. In particular, the country stands out for the protection of investments and for the possibilities of transnational trade. An example is the reactivation of the economic partnership with Kuala Lumpur, through the creation of a common cooperation area in Johor, in southern Malaysia.

According to indexdotcom, Singapore also looks with great interest at the general increase in economic integration throughout the continent, thanks also to its decisive role for ASEAN, in which it is one of the few countries that are not ‘developing’. The island state has in fact always promoted a reduction in tariffs and an abandonment of protectionist policies, but the slow application of these agreements in Asia has pushed Singapore to assert its weight by often orienting itself outside its regional context. The 2000 free trade agreement with New Zealand, for example, was supplemented in 2005 by a partnership agreement that also included Chile and Brunei, constituting the starting point of the Trans-Pacific Partnerships promoted by the USA starting from 2010.

The Singaporean government’s attention to ecological policies dates back to the early 1990s with the first National Green Plan in 1991, aimed at limiting the emission of harmful gases and increasing the waste recycling system. The regulation was updated in 1996 and 2006: among others, regulations were introduced for the sustainable use of water resources and for compliance with the minimum standards of conservation of natural landscapes.

Defense and security

As territorial issues with Malaysia are not yet fully closed (despite a marked improvement in relations between the two countries), Singapore spends 3.27% of GDP on defense. With this it mainly aims at an update of technology to maintain an advanced level in military defense and to offer its army a margin of superiority over neighboring countries, as far as the numerical size of the army and the dependence of its operations on the progress of the ‘national economy constitute serious weaknesses in a possible perspective of general regional instability. The ties between the Pap and the army prove to be strong: Lee Kuan Yew himself, former prime minister, was part of the army and, more generally, the number of ministers chosen from the ranks of the armed forces is high.

Singapore cooperates with other relevant regional players, such as India, and carries out joint military operations with other Five-Power Defense Agreement countries (Australia, Malaysia, New Zealand and the United Kingdom). The strategic position in the Strait of Malacca also implies the need to control and prevent acts of piracy. This is a necessity that brings the island state closer to neighboring countries by placing its naval units in joint operations of an international character. These take place not only in the area of ​​Southeast Asia but also, for example, in the Gulf of Aden. In 2009, in addition to the already existing government agencies, Singapore established a Maritime Security Task Force (Mstf) with coordination and intelligence tasks .

Although the fleet has enjoyed substantial investments recently, Singapore is not involved in the disputes in the South China Sea, demonstrating its intention to maintain good relations with all parties. The strategic choice to support the US Pacific pivo t, however, set the terms for possible disagreements with China.

Singapore is one of the signatory countries of the Trans-Pacific Partnership promoted by Washington. However, it is a fact that 80% of Chinese oil and 90% of Japanese crude oil pass through the Strait of Malacca. The management of Singapore is also essential in terms of security given the ability of isolated groups, some linked to international terrorism, to carry out large-scale attacks.

Singapore Energy