ABSTRACT

Singapore is one of the most open free trade economies in the world. With a ratio of merchandise trade to GNP of 2.9, it stands as an archetypal example of what Lloyd and Sandilands (1986) have called a “re-export economy”, or an economy in which imported inputs are used intensively in the production of exports for world markets. Given Singapore’s small physical size and the dearth of natural resources except for its strategic location at the crossroads of trade, the high import content of exports is unsurprising. Indeed, Singapore began its economic history as an entrepôt for South-East Asia, importing commodities from the regional hinterland and then re-exporting them to the other countries in the world, and vice versa. Like its counterpart in East Asia, Hong Kong, this role has given rise to supporting service industries such as shipping, port facilities, insurance, logistics and transport, all of which continue to be important up to the present day.