Cumulative foreign direct investment in Singapore has grown from $311 billion in 2005 to more than $1.024 trillion in 2014 ("Examine root of why MNCs pull out of Singapore" by Mr Tan Kar Quan and "Do more to nurture innovation in Singapore" by Mr Joe Ng Boon Leng, Forum Online; both published last Friday).
The World Bank has also consistently ranked Singapore as the easiest place to do business.
Companies consider many factors when deciding on investment locations, including the rule of law, business infrastructure, government policies, access to talent and the availability of incentives.
Incentives are used by many countries to attract investments that create jobs, develop capabilities and/or catalyse new industries. Both multinational corporations and Singapore companies can qualify for incentive support from the Singapore Government based on the nature, scale and scope of their investments.
However, there are also firm-specific reasons for locating or relocating business functions and operations, ranging from changes in management and strategy as well as organisational restructuring in response to competition and the state of their respective industries.
Singapore companies are subject to similar market forces.
The Economic Development Board's objective is to ensure that the overall productive capacity of the economy continues to grow and investments continue to flow steadily for the long term.
On both counts, Singapore has experienced positive outcomes decade after decade.
For example, the output of our manufacturing sector has grown by a compounded annualised growth rate of 4.5 per cent over the past 20 years. The average annual fixed asset investment in the 2000s was $12.3 billion, an increase from $6.5 billion in the 1990s and $1.7 billion in the 1980s.
Earlier this year, the EDB reported that the investment commitments last year met or exceeded the forecast for all our performance indicators such as fixed asset investments, total business expenditure as well as jobs created. Upon full implementation, this will lead to the creation of 16,800 jobs.
The results reflect the continued confidence and commitment of global companies in Singapore as a strategic location in Asia for key business functions.
MNCs and foreign direct investments remain an important driver of economic growth and source of good jobs for Singapore, complementing investments made by Singapore companies.
The EDB will continue with our targeted approach to investment promotion, working with MNCs to develop and strengthen the local supplier base in Singapore, and facilitating partnerships between the MNCs and local companies to create new businesses as Singapore shifts from a value-adding to a value-creating economy.
Yeoh Keat Chuan
Singapore Economic Development Board