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Singapore: Background and U.S. Relations
Emma Chanlett-Avery
Specialist in Asian Affairs
July 15, 2011
Congressional Research Service
7-5700
www.crs.gov
RS20490
CRS Report for Congress
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repared for Members and Committees of Congress
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Singapore: Background and U.S. Relations
Summary
A former trading and military outpost of the 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 substantially restricts political freedoms in the name of maintaining social stability and
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, but also
maintains close relations with China. The U.S.-Singapore Free Trade Agreement (FTA) went into
effect in January 2004, and trade has burgeoned.
The People’s Action Party (PAP) has won every general election since the end of the colonial era
in 1959, aided by a fragmented opposition, Singapore’s economic success, and electoral
procedures that strongly favor the ruling party. Some point to changes in the political and social
environment that may herald more political pluralism, including generational changes and an
ever-increasingly international outlook among Singaporeans. In May 2011, opposition parties
claimed their most successful results in history, taking six of parliament’s 87 elected seats.
Though this still left the PAP with an overwhelming majority in Parliament, the ruling party
described the election as a watershed moment for Singapore and vowed to reform the party to
respond to the public’s concerns.
As one of the closest U.S. partners in ASEAN, Singapore is one of the strongest supporters of
closer American engagement in Southeast Asia. Maintaining positive relations with both China
and the United States is a keystone of Singapore’s foreign policy. Singapore often portrays itself
as a useful balancer and intermediary between major powers in the region. China’s economic
power makes it a crucial component of trade policy for all countries in the region, but Singapore’s
ties with Beijing are multifaceted and extend to cultural, political, and educational exchanges as
well. Singapore adheres to a one-China policy, but has an extensive relationship with Taiwan and
has managed it carefully to avoid jeopardizing its strong relations with Beijing.
In 2010, Singapore was the 13h largest U.S. trading partner with $46.6 billion in total two-way
goods trade, and a substantial destination for U.S. foreign direct investment. It is frequently
ranked as one of the world’s freest economies—the Heritage Foundation’s 2011 Index of
Economic Freedom ranked Singapore second, behind only Hong Kong. In addition to trade,
mutual security interests strengthen ties between Singapore and the United States. A formal
strategic partnership agreement outlines access to military facilities and cooperation in
counterterrorism, counter-proliferation of weapons of mass destruction, joint military exercises,
policy dialogues, and shared defense technology.
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Contents
Historical Background ................................................................................................................ 1
Government and Politics ............................................................................................................. 2
May 2011 Parliamentary Elections ........................................................................................ 2
Background on Singaporean Politics ..................................................................................... 2
U.S.-ASEAN-China 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
Figures
Figure 1. Map of Southeast Asia.................................................................................................. 1
Contacts
Author Contact Information ........................................................................................................ 6
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Singapore: Background and U.S. Relations
Historical Background
An island city-state located astride key shipping lanes at the southern tip of the Malay Peninsula,
Singapore’s economic and strategic importance exceeds its small size. Founded in 1819 by British
East India Company official Sir Thomas Stamford Raffles, Singapore’s free trade status has been
a major factor in its success. Singapore achieved home rule in 1959 and joined with Malaya,
Sabah, and Sarawak to form the Federation of Malaysia in 1963. Within two years, friction
between the Malay-dominated federation government and the Chinese-dominated Singapore
administration led to the separation of Singapore from Malaysia. Amid serious doubts about its
viability, Singapore became a separate independent nation in 1965.
Figure 1. Map of Southeast Asia
Source: Map, CRS; statistics, CIA World Factbook.
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Government and Politics
May 2011 Parliamentary Elections
On May 7, 2011, Singapore’s long-marginalized opposition parties won their largest percentage
of the popular vote in the history of the city-state, capturing nearly 40% of the ballots cast and
winning six seats. In many countries, such a showing would not have been remarkable, but in
Singapore, where the ruling People’s Action Party (PAP) is accustomed to overwhelming
majorities, it was a notable achievement for the opposition. In the last parliamentary elections in
May 2006, the PAP had captured over 66% of the vote and 85 of 87 seats. Despite strong
economic growth in 2010, many voters deserted the PAP because of discontent with the rising
cost of living, concerns about immigration, a widening income gap, and general impression that
the ruling party had lost touch with their citizens. Apparently chastened, PAP leaders including
Prime Minister Lee Hsien Loong acknowledged that the party needed to change its approach,
initiated policy reviews, and replaced nearly all of the sitting cabinet members.
Opposition parties exploited newly-relaxed restrictions on the use of social media for the
campaign, forcing mainstream media, which traditionally had been heavily tilted toward the PAP,
to provide coverage of all the candidates. In a change from earlier practice, opposition parties
contested all constituencies except for one, and succeeded for the first time in winning a group
representation constituency—constituencies where several seats are contested together—ousting
the sitting foreign minister, George Yeo, in the process.
Background on Singaporean Politics
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, 87 and
widely acknowledged as the architect of Singapore’s success as a nation, stepped down from his
post as “Minister Mentor” following the 2011 elections, citing a need to pass leadership on to the
next generation of Singaporeans.
The People’s Action Party (PAP) has won every general election since 1959, aided by Singapore’s
economic success and electoral procedures that strongly favor the PAP. For years, Singapore’s
political opposition was considered weak and fragmented. Singapore has universal suffrage, and
parliamentary elections are held at least every five years.
In 2010, changes to the constitution guaranteed that more non-PAP members would be
represented in the parliament. The electoral reforms were seen as an acknowledgement by the
PAP that it must adjust to a more open and diverse Singapore if it is to survive in the years to
come. 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. Greater, and generally freer, use of the Internet may be
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threatening to some of the leadership; in the past the government attempted to tighten control
over bloggers, who may not exercise the same restraint as the mainstream media in limiting
criticism of the ruling party.
U.S.-ASEAN-China Relations
Singapore has been a strong champion of raising the profile of the Association of Southeast Asian
Nations (ASEAN), comprised of Burma (Myanmar), Brunei, Cambodia, Indonesia, Laos,
Malaysia, the Philippines, Singapore, Thailand, and Vietnam, which helps the mostly small
countries to “punch above their weight,” in regional diplomacy, particularly vis-à-vis China. As
one of the closest U.S. partners in ASEAN, Singapore is a supporter of closer American
engagement in Southeast Asia, but voiced disappointment in a perceived lack of U.S. involvement
in the region during the Bush Administration. Renewed U.S. engagement under the Obama
Administration has pleased Singapore and may have allowed it more diplomatic space to stand up
to Beijing on key issues.
Maintaining strong relations with both China and the United States is a keystone of Singapore’s
foreign policy. Singapore often portrays itself as a useful balancer and intermediary between
major powers in the region. In the South China Sea dispute, for example, in 2011 Singapore
called on China to clarify its claims on islands that are also claimed by several other ASEAN
countries. Singapore, a non-claimant, characterized its stance on the issue as neutral yet
concerned because of the threat to maritime stability. At the same moment, Singapore was hosting
a port visit by a major Chinese surveillance vessel, part of an ongoing exchange on technical
cooperation on maritime safety and marine environment protection with Beijing.
China’s economic power makes it a crucial component of trade policy for all countries in the
region, but Singapore’s ties with Beijing are multifaceted and extend to cultural, political, and
educational exchanges as well. There are frequent high-level visits between the leaders of
Singapore and China. Singapore adheres to a one-China policy, but has an extensive relationship
with Taiwan and has managed it carefully to avoid jeopardizing its strong relations with Beijing.
Taiwan and Singapore have held large-scale military exercises annually for over 30 years and, in
2010, announced the launch of talks related to a free-trade pact under the framework of the World
Trade Organization.
Burma
Burma has been an area of particular contention: the United States supports a more hard-line
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 and investing in Burma, as well as allowing Burmese officials to hold assets in bank
accounts in Singapore. Singapore officials dispute the banking claims, but the city-state’s strict
bank secrecy laws have prevented them from providing specific rebuttals.
Economy
Singapore boasts highly developed infrastructure, including one of the world’s busiest and largest
ports, a top-ranked international airport, modern expressways, and a state-of-the-art mass rapid
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transit system. In terms of commerce, it is one of the world’s largest foreign exchange centers and
one of Asia’s largest financial services centers. Singapore’s major industries include electronics,
particularly computer peripherals; petroleum refining and petrochemicals; construction; food and
rubber processing; and shipbuilding and repair. Tourism is also a major industry, and the
development of several large casinos in the city-state has both raised tourism arrivals and created
public policy issues about managing and regulating the gaming industry. The government plays a
major role in directing the export-oriented economy and providing infrastructure support for the
strong manufacturing and services sectors.
For more than two decades until the 1997 Asian financial crisis, the country achieved annual
growth rates of 8%-9%. Real GDP growth averaged 6.8% between 2004 and 2008, but contracted
2.1% in 2009 due to the global financial crisis. The government’s $14 billion stimulus package
introduced in 2009 drove a strong recovery in 2010: economic growth reached 14.5%, the highest
on record. The stimulus measures included a jobs and training program, personal income tax
rebates, a business financing scheme, and investment in public sector construction.
China, Malaysia, and the United States are Singapore’s largest trading partners. Singapore has
concluded at least 18 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. The government provides tax incentives
for overseas wealth to be held there.
U.S.-Singapore Relations
Trade and Investment
In 2010, Singapore was the 13h largest U.S. trading partner with $46.6 billion in total two-way
goods trade. The U.S. goods trade surplus with Singapore was $11.7 billion in 2010.1 U.S. foreign
direct investment (FDI) in Singapore was $76.9 billion in 2009, while Singapore’s investment in
the United States totaled $22.9 billion in the same year.2 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.
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).
1 Office of the Trade Representative of the United States, fact sheet, accessed July 2011 at http://www.ustr.gov/
countries-regions/southeast-asia-pacific/singapore.
2 Office of the Trade Representative of the United States, press release, October 2010. Accessed at
http://www.ustr.gov/about-us/press-office/press-releases/2010/october/united-states-and-singapore-hold-sixth-annual-
free.
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Defense Cooperation
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. Changi Naval Base is the only facility in
Southeast Asia that can dock a U.S. aircraft carrier. Singapore forces also train regularly in the
United States. In 2011, the United States announced that it would forward deploy two littoral
combat ships to Singapore; the vessels can patrol coastal areas as well as the South China Sea.
In July 2005, President George W. 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, the first of its kind with a non-
ally since the Cold War, 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 supported the U.S.-led coalitions in the Iraq War and Operation Enduring Freedom in
Afghanistan, allowing American aircraft and ships access to Singapore bases. It also deployed
several contingents of transport aircraft and ships to Iraq and contributed policemen to help train
Iraqi police. In support of reconstruction efforts in Afghanistan, Singapore has contributed
medical and construction engineering teams to Bamiyan and Oruzgan provinces. In addition,
Singapore participated in international counter-piracy efforts in the Gulf of Aden in 2009-2010.
Counterterrorism Strategy
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, many of whom 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.
Singapore has signed a number of multilateral and bilateral agreements focused on
counterterrorism. 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
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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.
Human and Civil Rights Issues
Although it has been elected by a comfortable majority in every election since Singapore’s
founding, the PAP “places formidable obstacles in the path of political opponents,” according to
the U.S. State Department’s 2010 Country Report on Human Rights Practices. The report states
that “the PAP maintained its political dominance in part by intimidating organized political
opposition and circumscribing 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. The political careers of opposition politicians are
marked by characteristic obstacles from the ruling party, including being forced to declare
bankruptcy for failing to pay libel damages to prominent PAP members.
Opposition figures are not the only the 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 an
opposition politician’s latest court case as well as cited recommendations for judicial reform
published by the International Bar Association. Similar fines have been levied on international
media in the past, including the Economist, Far Eastern Economic Review, and the Financial
Times. Reporters Without Borders assigned Singapore a ranking of 136 out of 178 countries in its
2010 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. The
PAP’s showing at the polls among younger voters in 2010 may push Lee to further relax some
social measures. Such an approach would likely be incremental, as opposed to significant
movement toward a multi-party liberal democracy.
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. The ISA
also allows detention without a trial for acts that threaten national security.
Author Contact Information
Emma Chanlett-Avery
Specialist in Asian Affairs
echanlettavery@crs.loc.gov, 7-7748
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