The Singapore economy is a role model for other developing countries. It is an example of a free market economy that has grown at an accelerated rate. It has a very high per capita income and the country enjoys a relatively corruption free environment, an educated and motivated workforce and well established legal and financial business framework.
The economy is to a very large extent dependent on export activities. High tech products such as semiconductors and consumer electronics form the bulk of the exports in Singapore. . Singapore uses the revenue generated from its exports to import natural resources and raw goods which are scarce in Singapore.
In recent years the Singapore government has invested heavily in diversifying the economy, resulting in the growth in the tourism industry, the pharmaceutical industry, biotechnology sector, financial services, education, multimedia, retail and leisure.
The Government in Singapore has devised a new scheme to protect exporters against rising customer defaults. Under the new Export Coverage Scheme (ECS), the Government would subsidize half the cost of insurance premiums for firms trading overseas and would also share the risk with the insurance companies for the amount beyond their maximum coverage. The scheme which would commence from March1, 2009, would benefit about 1000 Singapore based exporters and insure up to $4 billion worth of trade revenue.
In order to give impetus to trade, International Enterprise (IE) Singapore would also spend $66 million for promoting export. Nearly 5000 companies are expected to benefit from the IE Singapore schemes. IE has also devised an Exporter Development Programme to develop export competency.
The issue of trade credit insurance has gained prominance, to provide insurance protection to exporters from International clients affected by the global meltdown. With IE Singapore acting as underwriter, the Government will increase cover for firms beyond the maximum coverage that insurers will currently provide.
The Government through IE Singapore would subsidize 50 per cent of the cost of insurance premiums of up to $100000 per company for businesses with sales of less than $80 million. IE Singapore supports trade associations and business chambers in organizing International Trade fairs and overseas business missions. This would enable Singapore companies to expand to new markets.