"..Singapore is undergoing significant structural adjustment,
against a background of accelerated globalization and increased
competition from other regional economies. In response to these
challenges, the Government has undertaken a range of structural
reforms to diversify the economy and to enhance its
competitiveness. Indeed, prospects over the medium term largely
depend on the effectiveness of these changes.
Singapore has been moving up the manufacturing value chain into
selected knowledge-intensive activities, such as pharmaceuticals.
Some traditional manufacturing industries are relocating elsewhere,
but others are staying, and upgrading their products. Niche
industries such as water technology and interactive media are
developing. With its efforts to make wages and other business costs
more flexible, Singapore is continuing to attract multinational
companies and foreign direct investment. On the assumption of a
healthy level of global growth over the medium term and continued
efforts to push forward with domestic structural reforms, the
growth rate is put at 4.55.0% in 20082010, broadly in line with
potential.
Domestic risks to watch for include growing income inequalities and
persistent skills mismatches, which could retard the momentum of
structural reform. Nevertheless, given the strong external and
fiscal positions, and gradual diversification of growth sources,
the economy may well be better placed to face such risks than in
the past."
http://www.adb.org/Documents/Books/ADO/2006/sin.asp
