Inward FDI in Singapore and its policy context

Inward foreign direct investment (IFDI) has long been an important feature of the Singapore economy, and Singapore remains an attractive host to FDI. Apart from a brief decline in 2002, FDI inflows have generally been strong in the decade 2000-2010. They reached a peak in 2007 at US$ 37 billion, just before the global financial and economic crisis of 2008-2009. In 2008, inflows declined sharply to US$ 8.6 billion, before rapidly rebounding to reach US$ 38 billion in 2010. Singapore has moved from an economy primarily involved in manufacturing consumer goods in labor-intensive industries in the 1960s, to one producing high value-added goods and a variety of complex services in the 2000s. Investment policies have evolved to attract high-value added industries as well as targeted cluster activities, including those in biomedical sciences, logistics and research and development (R&D). At the end of 2010, the stock of FDI in Singapore stood at US$ 470 billion. In recent times, the Netherlands, the United States, Japan, and the United Kingdom have been the top sources of FDI in Singapore. Environmental policies are increasingly emphasized in the regulation as well as attraction of business activity, including by foreign MNEs