Singapore is one of the most highly developed and sophisticated industrial, commercial, financial and consumer economies in the world.  Despite the current economic turmoil, Singapore offers a stable, yet dynamic, market for U.S. exporters and is a key regional trade center.  The World Bank's "Doing Business 2009" report ranked Singapore as the easiest country in which to do business.  U.S. companies feel comfortable in Singapore.  English is the language of business and government.  The rule of law and Intellectual Property Rights are respected.  Singapore was the 12th largest export market and 17th largest trading partner of the United States in 2008.  Despite being halfway around the world, the United States was Singapore's second largest import source, behind Malaysia.  Other major suppliers for Singapore were China, Japan, South Korea, Indonesia, Taiwan, Saudi Arabia, Thailand, and Germany.

Because of Singapore's heavy dependence on international trade, its economy is highly subject to the ebbs and flows of greater regional and world market forces.  The Singapore economy is expected to contract by 6.0% to 9.0% in 2009 as a result of the global economic crisis.  Preliminary estimates show that the Singapore economy grew 1.1% in 2008, a sharp drop from the 7.7% real GDP growth it achieved in 2007.  Economists expect the Singapore economy to contract fro the first three quarters of 2009 and expect the slump will be most severe in the first quarter.  Manufacturing is estimated to have contracted by 4.1% in 2008 as key sectors such as electronics and pharmaceuticals were hit by the rapid drop in demand from major markets.  Total trade grew 9.6% to US$644 billion in 2008, but is expeced to drop by 17-19% in 2009.  Falling oil prices are expected to rein in inflation which is now expected to be between -1% and 0% in 2009, compared to 6.5% in 2008.  Unemployment is forecast to reach more than 5.0% this year.

As Singapore braces itself for its worst recession since independence in 1965, the Government of Singapore (GOS) announced a significant US$13.6 billion (S$20.5 billion) budget package to save jobs and cut business costs, as well as provide tax credits and rebates for lower-income households.  The GOS, will also increase spending on development and major infrastructure projects.  Corporate tax will be cut by one percentage point to 17%.  Reflecting the seriousness of the economic situation, the GOS made history by drawing on its official reserves for the first time.  The US$3.3 billion (S$4.9 billion) draw on the reserves will fund two special programs: a job credit program to subsidize part of the wage bill of employers and another to encourage banks to lend more freely to viable businesses.  If conditions worsen, the GOS is expected to implement off-budget measures as in previous recessions to boost the economy.

Small in size and population, Singapore is an established regional hub for transportation, logistics, aircraft Maintenance, Repair and Overhead (MRO), petroleum refining, offshore oil rig production, pharmaceuticals, medical care, electronics, and chip manufacturing.  Finance, education and biotechnology are newer concentrations.  Over 1,500 U.S. firms have offices or facilities in Singapore, many with regional Asian operations.  At US$82 billion, U.S. foreign direct investment in Singapore is greater only in Japan in the Asia-Pacific area.  The Singapore government encourages American firms to export to Singapore and then to use Singapore as a distribution hub for Asia.  Singapore was the first country in Asia to sign a Free Trade Agreement (FTA) with the United States which came into force January 1, 2004.  It expanded U.S. market access in goods, services, investment, and government procurement.  The U.S. - Singapore FTA also enhanced intellectual property protection and provided for cooperation in promoting labor rights and the environment.