Singapore's largely corruption-free government, skilled work force, and advanced and efficient infrastructure have attracted investments from more than 7,000 multinational corporations from the United States, Japan, and Europe. Foreign firms are found in almost all sectors of the economy. Multinational corporations account for more than two-thirds of manufacturing output and direct export sales, although certain services sectors remain dominated by government-linked companies.

Manufacturing and services are the twin engines of the Singapore economy and accounted for 27% and 62%, respectively, of Singapore's gross domestic product in 2004. The electronics industry leads Singapore's manufacturing sector, accounting for 40% of Singapore's total industrial output, but the government also is prioritizing the development of the chemicals and biomedical/pharmaceutical industries.

To maintain its competitive position despite rising wages, the government seeks to promote higher value-added activities in the manufacturing and services sectors. It also has opened, or is in the process of opening, the financial services, telecommunications, and power generation and retailing sectors to foreign service providers and greater competition. The government also has pursued cost-cutting measures, including tax cuts and wage and rent reductions, to lower the cost of doing business in Singapore. The government also is actively negotiating free trade agreements with key trading partners, and concluded one with the United States that came into force January 1, 2004.

Singapore continues to attract investment funds on a large scale despite its relatively high-cost operating environment. The United States leads in foreign investment, accounting for 33% of new commitments to the manufacturing sector in 2004. As of 2003, the stock of investment by U.S. companies in the manufacturing and services sectors in Singapore reached about $61.4 billion (total assets). The bulk of U.S. investment is in electronics manufacturing, oil refining and storage, and the chemical industry. More than 1,500 U.S. firms operate in Singapore.

The government also has encouraged firms to invest outside Singapore, with the country's total direct investments abroad reaching $93 billion by the end of 2003. China was the top destination, accounting for 12% of total overseas investments, followed by Hong Kong (8%), Malaysia (9%), Indonesia (7%), and the United States (6%).

The United States provides no bilateral aid to Singapore.

Singapore has enjoyed virtually full employment for long periods of time. Amid slower economic growth in 2003, unemployment rose to 4.6%. As of end-June 2005, the rate of unemployment dropped to 3.4%. Much of the unemployment is structural, as low-skill manufacturing operations move overseas. From 1990 to 1997, the number of foreign workers in Singapore increased rapidly to cope with labor shortages. Foreign workers comprise 27% of the labor force; the great majority of these are unskilled workers.

Telecommunications and Internet facilities are state-of-the-art, providing high-quality communications with the rest of the world. Radio and television stations are all ultimately government-owned or government-linked. The print media is dominated by a company with close ties to the government. Daily newspapers are published in English, Chinese, Malay, and Tamil.