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Singapore-New Zealand relations are long-standing and friendly, and are based on a close political, economic and defence ties.
The founding of modern Singapore is generally traced back to the establishment of a British trading post in Singapore in 1819. Singapore, together with Malacca and Penang, became the Straits Settlements in 1826, under the control of British India. After dissolution of the Straits Settlements in 1946, Singapore became a Crown Colony. Self-government was attained in 1959. In May that year, Singapore held its first general election, and, Lee Kuan Yew, the leader of the People’s Action Party, became the first Prime Minister of the self-governing State of Singapore. On 16 September 1963, Singapore gained independence from Britain as a member of the Federation of Malaysia. Singapore then seceded from Malaysia on 9 August 1965, achieving full independence.
The People's Action Party (PAP) has ruled Singapore since self-governance. In November 1990, Lee Kuan Yew stood down from the Prime Ministership, allowing Goh Chok Tong to become Singapore's second Prime Minister.
On 12 August 2004, PM Goh handed the baton over to Lee Kuan Yew’s eldest son, Lee Hsien Loong, who was previously the Deputy Prime Minister and Finance Minister. Goh then assumed the post of Senior Minister previously held by Lee Kuan Yew. The latter assumed the newly-created post of Minister Mentor.
Singapore is a republic with a parliamentary system of government. The Head of State is the President, who is elected every six years. (The current president SR Nathan was elected on 1 September 1999 and re-elected in 2005). The Prime Minister and other Members of the Cabinet are appointed by the President from the elected Members of Parliament.
The People's Action Party (PAP) was returned to government in the last general election held on 6 May 2006. PAP regained 82 of the 84 seats in the House, but, saw its popular vote decrease from 75.3 percent to 66.6 percent. The campaign run by the Opposition was significantly more cohesive than in past years, ensuring sufficient candidates to contest 47 contestable seats in the House. The Opposition won 2 of these 47, and gained a third seat by a legal requirement for there to be three Opposition seats in the house. The decrease in numbers voting for PAP reflects an increasing maturity in the electorate and a willingness to express a divergent view.
The government in Singapore has been criticised for hindering free and open political debate. In response to such criticism, the government has taken some steps to liberalise the media and to encourage more debate in parliament. In 1990 it introduced a nominated MP system to provide non-partisan viewpoints in parliament. Nominated MPs are selected from academia, the media, community organisations, the business community, sporting and art worlds.
Increased regional competition, an ageing population, and the need to upgrade and restructure its manufacturing sector are the three key challenges facing the Singapore economy. Singapore’s economic policies are aimed at maintaining Singapore’s role as a major trading centre in Asia.
Singapore’s fiscal policy is designed to ensure that the economy continues to move up the value-added chain. The Singapore 2008 Budget, focused on enhancing education and training opportunities, fostering innovation, maintaining competitiveness by supporting the growth of SMEs and strengthening Singapore ’s role as a financial and business hub.
Fallout from the global financial crisis and economic slowdown has caused the Singapore Trade and Industry Ministry to downgrade its growth targets for the year to 3 percent from 4-5 percent. This follows contraction of the economy throughout the first part of the year.
Inflation has risen sharply since late 2007, hitting 26-year highs of 7.5 percent in April, May and June 2008. High levels of inflation are forecast to continue before declining to 2-3 percent in 2009.
Unemployment is expected to increase beyond the 2.1 percent recorded in 2007.
Despite high costs, Singapore remains attractive to investors who are concerned about stability in the region. The World Bank rates Singapore (ahead of New Zealand) as the world’s best place to do business. According to the Economic Development Board (EDB), there are more than 7000 multinational corporations in Singapore, and 4000 of these have regional headquarters responsibilities. Attracting further companies to establish or expand their operations in Singapore is a key part of Singapore’s economic strategy.
With Singapore’s limited size and resources, outward investment, particularly into the region, is an important part of its external economy. Singapore’s projects overseas focus on real estate development, tourism, logistics, planning and management, and include infrastructure projects and industrial parks. Key projects include the Viet Nam-Singapore Industrial Park, the long-established Batam Industrial Park and the newer Bintan Industrial Estate in Indonesia, the Bangalore Information Technology Park in India and the Wuxi-Singapore Industrial Park in China. Under its Free Trade Agreement with the US, its industrial parks in Batam and Bintan are effectively recognised as extensions of Singapore’s manufacturing base.
In line with Singapore’s push to be a premier research hub in Asia, PM Lee announced in March 2008 that S$1.2 billion would be channelled to the research sector. Singapore has also unveiled an S$350-million blueprint to be a key player in the fast-growing clean energy industry. As part of this push, Singapore aims to be a testing ground for new technology such as the latest solar panels or fuel cell engines. The blueprint has three key planks encompassing the nurturing of a cluster of large and small businesses, the development and testing of new technology, and marketing of exports overseas. This new industry is expected to add S$1.7 billion to GDP each year and create 7000 jobs by 2015.
One of the principles underlying Singapore’s foreign policy is its commitment to maintaining a secure and politically and economically stable environment in and around Southeast Asia. Singapore, for example, has been a strong advocate of regional counter-terrorism initiatives, fearing the impact that another tragedy like Bali might have on investor confidence and on local economies.
Singapore takes the threat of a terrorist attack within its territory and in the surrounding region very seriously and has given firm (political and practical) support to the US led coalition against terrorism. The arrest of 13 Jemaah Islamiah members in Singapore in December 2001 for terrorist related activities and the subsequent arrest of 19 people in August 2002, has underscored Singapore’s resolve to crack down on suspected terrorists and support tighter security measures.
The Association of South East Asian Nations (ASEAN), of which Singapore is a founding member and current chair, is a centrepiece of Singapore’s foreign policy. Singapore recognises that its future prosperity depends to a large extent on ASEAN’s economic progress and competitiveness and remains fully committed to efforts to forge ahead with the ASEAN Free Trade Area (AFTA), and the ASEAN Investment Area (AIA).
Singapore was a central player in the development and conclusion of the Australia/New Zealand/ASEAN Free Trade Agreement (AANZFTA) that was agreed on 3 September 2008. This agreement is likely to be worth around $50 million in tariff savings per year to New Zealand.
Singapore is a strong supporter of regional organisations built around ASEAN including APEC, (it is the host of the APEC Secretariat), Asia-Europe Meeting (ASEM), Forum for East Asia-Latin America Cooperation (FEALAC), and the East Asia Summit (EAS).
To take regional economic integration a step further, then Prime Minister Goh Chok Tong proposed the formation of an ASEAN Economic Community (AEC). The proposed AEC goes beyond the normal provisions of a free trade agreement, and incorporates elements of a common market such as the free movement of capital and labour. At the recent ASEAN summit in Singapore in November 2007, ASEAN leaders agreed to bring forward the creation of the economic community to 2015.
Singapore is a strong supporter of international law, particularly the sanctity of national sovereignty, and accordingly, has played an active role in many international fora, including the United Nations, the Non-Aligned Movement (NAM) and the Commonwealth.
Singapore is one of relatively few economies where the value of external trade is substantially higher than its GDP, underscoring the role of trade as the lifeblood of the country. Singapore is therefore a strong proponent of “open markets” and multilateral trade liberalisation efforts and actively takes part in trade organisations such as the World Trade Organisation and APEC. It is also expanding a range of bilateral and regional free trade agreements. The total number of FTAs in force is 11 (12 from January 2009).
Besides the bilateral FTA that came into force on 1 January 2004, Singapore and the United States have forged closer ties in other areas. In October 2003, when the US President visited Singapore, the two countries announced the launch of negotiations to forge a landmark framework agreement on defence and security between Singapore and the United States. This agreement will include bilateral cooperation in areas such as counter-terrorism, counter-proliferation of weapons of mass destruction, joint military exercises and training, policy dialogues and defence technology. The two countries also announced the setting up of a joint facility, the Regional Emerging Diseases Intervention (REDI) Centre, to spur regional cooperation in the fight against infectious diseases and to counter bio-terrorism. The centre is based in Singapore.
Despite occasional bilateral disagreements, particularly with Malaysia, Indonesia and Thailand, Singapore maintains strong relations with its neighbours. Any tensions must be seen in the context of the underlying solidarity of ASEAN, and Singapore’s interests as a global trading nation.
The inaugural Asia-Middle East Dialogue (AMED) kicked off in Singapore on 20 June 2005. The brainchild of Senior Minister Goh Chok Tong, it was attended by officials, academics and non-governmental organisation representatives from more than 40 countries. AMED will not involve helping resolve Middle Eastern disputes, but instead, delegates will focus on how governments in the Middle East and Asia are responding to militant Islam and terrorist threats.
Singapore is, with New Zealand, a party to the 2005 Trans-Pacific Strategic Economic Partnership (TPSEP, TransPac or P4). In September 2008, it was announced that, in 2009, the USA would begin negotiations on entering the TPSEP agreement. In parallel to the TPSEP, Singapore, NZ, Chile and Brunei have also negotiated a binding Environment Cooperation Agreement and a binding Labour Cooperation Memorandum of Understanding.
Relations between Singapore and New Zealand are close and friendly, with a focus on defence and economic ties. The first major economic agreement between New Zealand and Singapore was the Agreement on a Closer Economic Partnership (ANZSCEP). This entered into force on 1 January 2001. It led to the signature of the Trans-Pacific Economic Partnership Agreement (TPSEP/P4) in June 2005 between New Zealand, Singapore, Brunei and Chile.
A Work Exchange Programme for tertiary students and recent graduates exists between Singapore and New Zealand. The programme, which started in 1999, enables New Zealand and Singaporean participants to work in each other’s country for up to six months.
New Zealand has concluded Defence and Double Taxation agreements and a liberal ‘Open Skies’ Air Services Agreement with Singapore. An Audio-visual Co-production Agreement was signed in July 2004 to enhance co-operation between the film industries of both countries.
Total two-way trade between Singapore and New Zealand continues to increase. In the year to December 2007, it reached NZ$2.8 billion. The balance of trade still stands strongly in Singapore’s favour with imports from Singapore to New Zealand amounting to NZ$1.914 billion in the year to December 2007. Over the same period, New Zealand’s exports to Singapore totalled NZ$690 million. However, New Zealand exports have been trending strongly upwards (the year to June 2007 total was NZ$514 million), so improving the balance of trade.
In December 2007, the top five New Zealand exports to Singapore and the corresponding change from the previous year (given in parentheses) are crude oil (no exports recorded in 2006), milk powder (up 21 percent), butter (up 44 percent), pet food (up 106 percent) and crustaceans (up 11 percent). The sixth-highest export category is whey and products, which recorded a 426 percent increase over the previous year.
In the same period, the top five imports into New Zealand from Singapore and the corresponding change over the previous year (given in parentheses) are petroleum oils, not crude (up 10 percent), light vessels, fire floats, etc (new), ethylene polymers (up 24 percent), computers (down 24 percent) and crude petroleum (down 74 percent).
Defence links, which date back to 1955, form a prominent part of the New Zealand-Singapore relationship. Arrangements for training assistance and other cooperation were formalised in a bilateral agreement concluded between the two Governments in 1971 in parallel with the establishment of the Five Power Defence Arrangements (FPDA)[1]. New Zealand undertakes an extensive range of naval, air and army exercises with Singapore, conducted both bilaterally and multilaterally, to the point where, in overall activity terms, Singapore is New Zealand’s second largest defence partner in the Asia-Pacific after Australia.
The maturity of the Singapore-New Zealand defence relationship and a history of defence cooperation are now yielding significant benefits for both countries. The most obvious example of this was the smooth integration of Singaporean troops into the New Zealand Area of Operations in Timor-Leste. The attachment of a Singaporean platoon to the New Zealand battalion in Timor-Leste in 2001 was Singapore’s first experience in contributing ground troops to a peacekeeping operation. Singaporean forces have also operated with the New Zealand Provincial Reconstruction Team in Bamyan, Afghanistan.
[1] The Five Power Defence Arrangements (FPDA) is a joint defence arrangement between Malaysia, Singapore, Australia, New Zealand and the United Kingdom.
Singapore is an important source of investment for New Zealand, with stock Foreign Direct Investment from Singapore in 2007 totalling NZ$1.636 billion. [2]
In 2003 a New Zealand beachhead at the PhaseZ.Ro (pronounced ‘Phasezero’) technology park in Singapore was opened by Trade Minister Jim Sutton to encourage New Zealand businesses to use the location as a launch pad into the rest of Asia. This has been relocated to serviced office facilities in Suntec City and Battery Road. Investment New Zealand also opened a regional investment office in Singapore in 2003.
In the year ended June 2008, some 27,000 Singaporean residents visited New Zealand, a 2 percent drop from the previous year.
Official Name - The Republic of Singapore - Land Area - 707 sq km - Population - 4.6 million - Capital City - Singapore - Religion - Buddhist, Taoist, Muslim, Christian, Hindu - Language - Malay, Chinese (Mandarin) Tamil and English are the official languages. Malay is the national language and English the administrative language - Currency - Singapore dollars
Political system - Republic with a parliamentary system of government - National government - People’s Action Party (holds 82 seats out of 84 possible seats in parliament) - National legislature - Comprises the President and a unicameral Parliament - Last election - 6 May 2006 - Next election due - 2011 Head of State - President S R Nathan - Head of Government - Prime Minister Lee Hsien Loong
GDP - (2007) S$229.1b - GDP Breakdown - Electronic components & parts 25.5%,
Telecommunications equipment 17.7%,
Petroleum products 12.3%,
Scientific & optical instruments 4.9%,
Inflation (CPI) 2.1% (2007) - GDP per capita (PPP) -
(IMF 2007) US$228,303 - Real GDP growth - 7.7% - Exports (2007) - S$582.8b - Imports (2007) - S$516.6b.
New Zealand Trade - NZ exports - NZ$687,390,000 (to December 2007) - Main exports (2007) - Crude oil NZ$142.3m, Milk powder NZ$129.7m, Butter NZ$28.5m, Pet food NZ$21.0m, Crustaceans NZ$20.1m, Whey and products NZ$15.9m, Fresh milk NZ$14.4m - NZ imports - NZ$1,914,106 (to December 2007) - Main imports (2007) - Petroleum oils, not crude NZ$1175m, Light vessels, fire floats NZ$385.2m, Ethylene polymers NZ$47.7m, Computers NZ$47.4m, Petroleum oils, crude NZ$42.7m, Telephone equipment NZ$32.8m, Machinery parts NZ$24.9m.
The Safetravel website provides a travel advisory for travellers to Singapore [external link].
