Singapore: Background and U.S. Relations
Prepared for Members and Committees of Congress
A former colonial island trading and military outpost of the far-flung British Empire, the tiny
Republic of Singapore has transformed itself into a modern Asian nation and a major player in the
global economy, though it still largely restricts political freedoms in the name of maintaining
economic growth. Singapore’s heavy dependence on international trade makes regional stability
and the free flow of goods and services essential to its existence. As a result, the island nation is a
firm supporter of both U.S. international trade policy and the U.S. security role in Asia. The U.S.-
Singapore Free Trade Agreement (FTA) went into effect in January 2004.
Historical Setting.............................................................................................................................1
Government and Politics.................................................................................................................2
U.S.-ASEAN Relations...................................................................................................................3
Burma ........................................................................................................................................ 3
Economy .......................................................................................................................................... 3
U.S.-Singapore Relations................................................................................................................4
Trade and Investment................................................................................................................4
Defense Cooperation.................................................................................................................5
Counterterrorism Strategy...............................................................................................................5
Human and Civil Rights Issues.......................................................................................................6
Figure 1. Map of Southeast Asia.....................................................................................................2
Author Contact Information............................................................................................................7
An island city-state located astride key SINGAPORE STATISTICS
shipping lanes at the southern tip of the Malay Population: 4.6 million
Peninsula, Singapore’s economic and strategic Area: 647.5 sq. km. (about 3.5 times the size of the
importance exceeds its small size. Founded in District of Columbia); one main island and 58 islets;
Sir Thomas Stamford Raffles, Singapore’s free Ethnic Groups: 77% Chinese; 14% Malay; 8% Indian; 1%
trade status has been a major factor in its other
success. Singapore achieved home rule in Language: Chinese (official); Malay (official and
Sarawak to form the Federation of Malaysia in business, professions, and schools
Malay-dominated federation government and years
the Chinese-dominated Singapore Literacy: 92.5%
administration led to the separation of
Singapore from Malaysia. Amid serious Inflation Rate: 2.1% (2007 est.)
doubts about its viability, Singapore became a GDP (PPP): $227 billion (2007 est.); Per Capita $49,900
separate independent nation on August 9, (2007 est.)
(2007 est.)
Source: CIA World Factbook
Figure 1. Map of Southeast Asia
Source: Magellan Geographix (1993)
Singapore’s parliamentary-style government is headed by the prime minister and cabinet, who
represent the majority party in Parliament. The president serves as a ceremonial head of state, a
position currently held by former Singapore ambassador to the United States S.R. Nathan. Lee
Hsien Loong has served as prime minister since 2004. Lee is the son of former Prime Minister
Lee Kuan Yew, who stepped down in 1990 after 31 years at the helm. The senior Lee, widely
acknowledged as the architect of Singapore’s success as a nation, reportedly continues to wield
considerable influence with the title of Minister Mentor.
In the last parliamentary elections in May 2006, the governing People’s Action Party (PAP)
secured a decisive victory, capturing over 66% of the vote and 82 of 84 seats. Singapore has
universal suffrage, and parliamentary elections are held at least every five years. The PAP has
won every general election since 1959, aided by a fragmented opposition, Singapore’s economic
success, and electoral procedures that strongly favor the PAP. In 2006, the opposition parties
picked up a marginal degree of support in terms of the percentage of overall votes cast, but only
managed to maintain their two existing seats. The seats are held by veteran lawmakers from the
Workers’ Party and the Democratic Alliance party.
Singapore’s leaders have acknowledged a “contract” with the Singaporean people, under which
individual rights are curtailed in the interest of maintaining a stable, prosperous society.
Supporters praise the pragmatism of Singapore, noting its sustained economic growth and high
standards of living. Others criticize the approach as stunting creativity and entrepreneurship, and
insist that Singapore’s leaders must respond to an increasingly sophisticated public’s demand for
greater liberties for economic survival.
There are some indications that the PAP may face increased challenges to its dominance if it
cannot provide for its citizens during the global economic downturn. Since its founding, the
government has enjoyed an implicit contract with its citizens, who accept the government’s
central role in controlling social norms in exchange for stability and a high standard of living. The
impending economic downturn, however, along with an increasingly sophisticated electorate and
the expanding presence of the internet, may have begun to fray the social pact.
Singapore is a founding member of the Association of Southeast Asian Nations (ASEAN), which
includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore,
Thailand, and Vietnam. As one of the closest U.S. partners in ASEAN, Singapore is a supporter of
closer American engagement in Southeast Asia, but has voiced disappointment in a lack of U.S.
involvement in the region in recent years, including Secretary of State Condoleezza Rice’s
decision to skip the annual ASEAN Regional Forum in 2005 and 2007. In a public interview, Lee
Kuan Yew expressed concern that the U.S. preoccupation in the Middle East was diverting 1
attention away from developments in Southeast Asia, particularly China’s rising economic clout.
Burma has been an area of particular contention: the United States supports a more hardline
approach of economic sanctions, while ASEAN members have supported a softer policy of
engagement. Singapore has come under criticism from some pro-democracy groups for trading
with Burma, as well as allowing Burmese officials to hold assets in bank accounts in Singapore.
Singapore officials dispute the claims, but the city-state’s strict bank secrecy laws have prevented
them from providing specific rebuttals.
Aside from having the world’s busiest port in terms of shipping tonnage, Singapore has the
world’s second largest container-port, one of the world’s top-ranked airports, modern
expressways, and an up-to-date mass rapid transit system. For more than two decades until the
1997 Asian financial crisis, the country achieved annual growth rates of 8-9%. In recent years, it
1 “Creator of Modern Singapore is Ever Alert to Perils,” New York Times. September 2, 2007.
has emerged as the fourth largest foreign exchange center in the world (behind London, New
York, and nearly even with Tokyo), as well as Asia’s third largest financial services center (behind
Tokyo and Hong Kong). Singapore’s major industries include electronics, particularly computer
peripherals; petroleum refining and petrochemicals; construction; food and rubber processing;
and shipbuilding and repair. The government plays a major role in directing the export-oriented
economy and providing infrastructural support for the strong manufacturing and services sectors.
As a trade-dominated economy, Singapore is particularly vulnerable to the global economic and
financial downturn. The government announced in November 2008 that Singapore has officially
entered a recession, based largely on a contraction in the crucial export sector. Authorities in
Singapore likely will turn to aggressive fiscal stimulus measures to soften the impact on its
citizens, using its sizeable cash reserves. Experts predict a slight contraction in GDP growth in
2009. Singapore has also guaranteed all bank deposits through 2010 in a bid to maintain
confidence in its banking sector.
China overtook the United States as Singapore’s second largest trading partner in 2003 (after
neighboring Malaysia). Singapore has concluded at least 14 free trade agreements (FTAs), is
pursuing several more, and is pushing aggressively for full implementation of the ASEAN Free
Trade Area (AFTA) and a range of other regional trade pacts. Such agreements are relatively easy
for Singapore to negotiate because, in addition to having a mature, globalized economy, it has
virtually no agricultural sector and its manufacturing is limited to specialized sectors.
Singapore may face increased scrutiny of its bank secrecy laws. Singapore seeks to
become an Asian headquarters for multinational corporations, including banks. Singapore
also aims to become a sanctuary for the world’s wealthy by offering them an attractive
living environment and by providing private banking services to wealthy clients. They
reportedly manage an estimated $150 billion in private wealth (compared with $1.7
trillion managed by Swiss bankers). The government provides tax incentives for overseas
wealth to be held there.
Singapore is the 15th largest U.S. trading partner with $44.6 billion in two-way trade in 2007 and
the eleventh largest U.S. export market. The U.S. goods trade surplus with Singapore was nearly
$8 billion in 2007, an increase of about $1 billion from 2006. Since the U.S.-Singapore FTA
entered into force on January 1, 2004, exports to Singapore have increased 49% and two-way
trade has increased 34%. Singapore and the United States are among the several nations on both
sides of the Pacific involved in the Trans-Pacific Strategic Economic Partnership (TPP). After
Japan, Singapore receives the most U.S. foreign direct investment in Asia, concentrated mostly in
the manufacturing, wholesale trade, information technology, and professional scientific, and
technical services sectors.
In addition to trade, mutual security interests strengthen ties between Singapore and the United
States. Bilateral military access agreements allow the United States to operate resupply vessels
from Singapore and to use a naval base, a ship repair facility, and an airfield on the island-state.
The U.S. Navy also maintains a logistical command unit—Commander, Logistics Group Western
Pacific—in Singapore that serves to coordinate warship deployment and logistics in the region.
As part of the agreements, squadrons of U.S. fighter planes are rotated to Singapore for a month
at a time, and naval vessels make regular port calls. Singapore supported the U.S.-led coalition in
the Iraq war and Operation Enduring Freedom in Afghanistan, allowing American aircraft and
ships access to Singapore bases. It also sent a contingent of transport aircraft and ships to Iraq and
contributed policemen to help train Iraqi police.
In July 2005, President Bush and Prime Minister Lee signed the “Strategic Framework
Agreement” to formalize the growing bilateral security and defense relationship in
counterterrorism, counter-proliferation of weapons of mass destruction, joint military exercises,
policy dialogues, and shared defense technology. The agreement builds on the U.S. strategy of
“places-not-bases” in the region, a concept that allows the U.S. military access to facilities on a
rotational basis without bringing up sensitive sovereignty issues. A 1990 Memorandum of
Understanding was updated in 2005 to continue to provide the United States with access to
Singapore’s military facilities.
Singapore has been at the forefront of anti-terrorist activity in Southeast Asia. A terrorist attack on
the city-state could jeopardize its standing as the region’s financial and logistical hub. Shortly
after the September 11 attacks in the United States, Singaporean authorities launched aggressive
operations to counter terrorist activities. Under its Internal Security Act, Singapore arrested
dozens of suspected Islamic militants, over 30 of whom remain in detention (two were released in
November 2007). Many of the militants are alleged to be members or sympathizers of Jemaah
Islamiyah (JI), a designated foreign terrorist organization with reported links to Al Qaeda. In
2002, Singaporean authorities reportedly uncovered a JI plot to bomb the U.S. Embassy and other
western targets in Singapore.
Since 9/11, Singapore has increased intelligence cooperation with regional countries and the
United States. Singapore officials point to the arrests of the alleged Jemaah Islamiah Singapore
cell leader in Indonesia and of a senior member of the same cell in Thailand as evidence of
successful intelligence sharing with counterparts in neighboring countries. Singaporean
authorities have also shared information gathered from the detainees with U.S. officials,
providing detailed insights into JI and Al Qaeda’s structure, methods, and recruiting strategies.
Singapore has demonstrated its commitment to fighting terrorism through a number of
multilateral and bilateral agreements. It was a founding member of Proliferation Security
Initiative (PSI), a program that aims to interdict shipments of weapons of mass destruction-related
materials and was the first Asian country to join the Container Security Initiative (CSI), a series
of bilateral, reciprocal agreements that allow U.S. Customs and Border Patrol officials at selected
foreign ports to pre-screen U.S.-bound containers. Singapore has focused particular attention on
maritime security measures, urging other littoral states in Southeast Asia to work together to
protect critical shipping lanes. In addition to ongoing coordinated patrols of the Straits of Malacca
and Singapore, Singapore, Malaysia, and Indonesia launched a joint security initiative to provide
maritime air surveillance of the Straits in 2005. Singapore was also instrumental in establishing
the Regional Cooperation Agreement on Combating Piracy and Armed Robbery Against Ships in
Asia (ReCAAP) to promote cooperation against piracy and armed robbery at sea in Asia.
Although it has been elected by a comfortable majority in every election since Singapore’s
founding, the PAP “uses the government’s extensive powers to place formidable obstacles in the
path of political opponents,” according to the U.S. State Department’s 2007 Country Report on
Human Rights Practices. The report states that “the PAP has maintained its political dominance in
part by developing voter support through effective administration and its record in fostering
economic prosperity, and in part by manipulating the electoral framework, intimidating organized
political opposition, and circumscribing the bounds of legitimate political discourse and action.”
According to Amnesty International, defamation suits by PAP leaders to discourage opposition
are widespread. The PAP ideology stresses the government’s role in enforcing social discipline
and harmony in society, even at the expense of individual liberties.
In September 2008, Singapore’s longest-serving opposition politician, J.B. Jeyaretnam, died of a
heart attack. In 1981, he was the first opposition candidate to defeat a PAP candidate for a seat in
parliament. His political career was marked by characteristic obstacles from the ruling party,
including being forced to declare bankruptcy for failing to pay libel damages to prominent PAP
members. His death leaves only one prominent opposition figure, Singapore Democratic Party
leader Chee Soon Juan, who was recently ordered to pay over US$400,000 in libel charges for
defaming former Prime Minister Lee Kuan Yew and other figures. (Two other opposition
politicians serve in parliament, but are less well known.)
Opposition figures are not the only targets of such lawsuits. In November 2008, Singapore’s high
court found The Wall Street Journal in contempt of court for commentary published in two
editorial pieces and imposed fines of over US$16,000. The editorials had commented on Chee’s
latest court case as well as cited recommendations for judicial reform published by the
International Bar Association. Similar fines have been levied on western media in the past,
including the Economist, Far Eastern Economic Review, and the Financial Times. Reporters
Without Borders assigned Singapore a ranking of 147 our of 167 countries in its annual survey of
respect for press freedom.
Under Lee Hsien Loong, Singapore has largely maintained its stringent social restrictions but
indicated some increased tolerance, such as allowing indoor opposition party gatherings. In his
National Day Address in August 2008, Lee announced some modest liberalizing measures,
including a relaxation of censorship of political films and approval of peaceful demonstrations in
a public park. Although Lee has emphasized the need to adapt to deal with modern challenges, he
also remains adamant that a multi-party liberal democracy is not an appropriate model for
Singapore.
Under the Internal Security Act, the government can prohibit or place conditions on publications
that incite violence; advocate disobedience to the law; arouse tensions among ethnic, religious,
and linguistic groups; or threaten national interests, national security, or public order. Under
previous U.S. administrations, the ISA and other human rights restrictions played a more
prominent role in the bilateral relationship, but since 9/11 the Bush Administration has refrained
from public criticism of such aspects of Singapore’s legal system.
Emma Chanlett-Avery
Specialist in Asian Affairs
echanlettavery@crs.loc.gov, 7-7748