Singapore Defence and Security Report Q2 2010

Singapore achieved a sharp return to form following the global economic crisis and sustained government investment looks set to drive development over the coming years. The government announced a 12.0% spike in development expenditure for FY10, markedly higher than the 7.0% average seen in the previous five years. This is on top of the government forecast of a 25.5% jump in FY09.

The city-state’s political stability has resulted in a high level of trust for government actions. A survey conducted by PR firm Edelman showed that trust in Singapore’s government stands at 84%, far ahead of global average of 49%. Singapore is also well regarded globally and is involved in multinational peace support missions.

Military expenditure is expected to remain high. We expect defence expenditure to remain between 4.8% and 5.9% of GDP over the next few years. Singapore’s export-orientated economy will be a key beneficiary of any pickup in external demand, leading us to believe that real GDP growth came in at an estimated -2.3% in 2009 (an upwards revision from our previous forecast of -3.6%).

Singapore’s military recruitment strategy is similar to that of Israel, owing to its small population and relatively high defence requirements. The military relies heavily on conscripts and reservists, advanced weaponry and a core of highly trained, professional active military personnel. In addition, the Ministry of Defence maintains a strict zero-growth policy with regards to military recruitment. This has led to increased reliance on unmanned defence technology for the army, navy and air force.

A security warning issued by Singaporean authorities in March 2010 about a potential terror attack on oil tankers passing through the Malacca Strait highlighted the risks facing the country. For many years it has been believed that Islamist militants want to target the strait to disrupt global shipping. The Singaporean armed forces have over 166,000 personnel.