Opportunity in crisis: Singapore as a gateway to ASEAN
The combined effects of protectionism and Covid-19 have led to massive disruption of supply chains and multiple border closures.
To date, the global pandemic has infected over 14 million people and claimed close to 800,000 lives worldwide, while US-China tensions show no signs of abating – which are in turn exerting pressure on many countries to take positions.
In such an uncertain landscape, companies are seeking to diversify their markets, supply chains and product offerings, and ASEAN – comprising Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam – offers opportunity as a relatively neutral region which also enjoys a strategic position between East and West. In addition, ASEAN has a huge population of over 622 million people and is forecast to be the fourth largest economy in the world by 2050, with one of the largest labor forces.
Located at the heart of Southeast Asia, Singapore is well-placed to serve as a gateway city for the region. Equipped with a highly skilled workforce supported by world-class educational institutions and robust business infrastructure – together with political stability and legal transparency – the country is also integrated into the global community through a network of 25 Free Trade Agreements (FTAs). These bilateral arrangements help catalyse incoming investments from abroad, and in turn pave the way for Singaporean firms to venture overseas, creating a conducive environment both for domestic and cross-border commerce.
“In many areas, Singapore is at the forefront,” said EDMUND TIE’s CEO, Ms Ong Choon Fah. “Companies, especially the multinationals, could consider setting up their regional headquarters here, and thereafter leverage on Singapore as a springboard to expand out across ASEAN.”
In 2019, Singapore clinched the top spot as the most competitive economy in the IMD World Competitiveness Ranking 2019, and was ranked second in the world by the World Bank for ease of doing business.
According to INSEAD’s Global Talent Competitiveness Index 2019, Singapore was number one in Asia Pacific and number two globally for talent competitiveness. The country achieved the same rankings for digital competitiveness, according to the IMD World Digital Competitiveness Ranking 2019.
In June last year, the International Chamber of Commerce (ICC) announced the establishment of the ICC Singapore Arbitration Group here, which reinforces Singapore’s global reputation as a gateway city for international trade and one of the most preferred seats of arbitration worldwide.
In addition to economic competitiveness, Singapore also enjoys the distinction of being a country that has produced world-class infrastructure. Supportive policies, underpinned by a strong regulatory and legal framework that protects investment capital and interests, have made tremendous headway and have resulted in accolades for the country’s airport, maritime ports, road network, housing, sanitation and info-communications infrastructure. Additionally, a sophisticated and highly mature financial sector ensures the availability and efficient allocation of funds to where they are needed.
Building on solid foundations, then Finance Minister Heng Swee Keat in February 2018 announced the creation of Infrastructure Asia, an ambitious initiative that will co-opt multi-sectoral firms across the entire value chain to support Asia’s infrastructure needs and unlock the region’s infrastructure potential.
On the basis of its sterling credentials and track record, the World Economic Forum’s Global Competitiveness Index for 2017-2018 had therefore ranked Singapore second worldwide for the robustness of its infrastructure.
Ms Ong said: “Amongst others, the importance of real, financial and digital infrastructure in turning the wheels of commerce cannot be overemphasised. From best-in-class commercial spaces and vibrant financial markets to internet speed and penetration rates, all these are factors that global companies will take into consideration before they set up shop here.”
According the Statistica, a leading online provider of data and statistics, Singapore in May 2020 came in tops with “the fastest average fixed broadband internet speed in Mbps”. At 88.4 per cent, Singapore also had the second highest rate of internet penetration in Southeast Asia as of mid-2020: Singaporean children on average get their first internet-connected device at the age of eight, below the global average of 10, which engenders a population of digital natives in time to come.
“While Singapore has scored exceptionally well along economic and developmental parameters, it is the individual who will eventually reside here, so livability is also another critical success factor,” remarked Ms Ong.
Adopting a hub-and-spoke model, Singapore has managed to house the majority of its population in well-planned, socially cohesive satellite towns, which are easily connected to the city centre and other towns by an extensive road and mass rapid transit network.
Amid a densely built up urban landscape, greenery is nonetheless pervasive. In line with the country’s vision to be a “City in a Garden”, parks can be found throughout the island, collectively accounting for 7,800ha of land, while the current park connector network stretches some 300km, connecting natural, cultural, historical and recreational destinations and linking communities together.
In February earlier this year, Singapore was ranked by human resource consulting firm ECA International as the most liveable city for expatriates from other Asian markets for the 15th consecutive year.
“Quality healthcare, good security with low crime rates, political stability, ample amenities and a multicultural social setting that welcomes diversity have made the country a highly liveable city,” said Ms Ong. “On the whole, Singapore is a delightful cosmopolitan city state that’s a great place to live, work and play in.”