The year 2006 witnessed several important events in Singapore, all of which have long-term political and economic significance. First, Singapore held its eleventh general election since independence, the first led by Lee Hsien Loong since becoming Prime Minister in August 2004 and Secretary General of the People's Action Party (PAP). Second, Singapore hosted the Annual Meetings of the Boards of Governors of the International Monetary Fund (IMF) and the World Bank Group, amidst civil society organizations’ protest and negative international press coverage on the Singapore government's refusal to admit a number of activists. Third, the investment of government-linked Temasek in Shin Corp, the family business of Thailand's former Prime Minister Thaksin Shinawatra, who was deposed in a military coup in September, weathered legal problems and continued to develop into a policy lesson in government-business relations for both the countries involved.

Singapore's economy picked up steam in the middle of the year, and experienced a relatively robust growth rate of 7.7 per cent. At the end of the year, the PAP government announced its intention to increase the Goods and Services Tax (GST) by 2 per cent, that is, from 5 to 7 per cent. The century-old Penal Code was given an extensive review and public feedback was sought, but Internet free speech was curtailed with the imposition of stricter regulations. Smoke haze from fires in Indonesia covered most of the country in October, prompting once again an urgent call by ASEAN to help Indonesia fight the forest fires. Two stalwarts of independent Singapore, S. Rajaratnam, Minister for Foreign Affairs (1965–80) and Deputy Prime Minister (1980–85), and Lim Kim San, who was credited with the public housing programme, passed away at the age of 81.

General Election 2006: Entrenching PAP Dominance

Singapore's general elections are awkward events. Despite incessant appeals from the PAP government to Singaporeans to be more engaged and active in public affairs, there are few opportunities for the citizenry to demonstrate their political choices and preferences.