Singapore is counting on Southeast
Asia’s economic boom to lure investment as the island’s
clampdown on foreign labor raises wage costs and makes it
difficult for companies to fill positions.
A plan by Southeast Asian nations for a common market
through the removal of tariffs and trade barriers for goods and
services by 2015 will boost the bloc’s appeal as a production
base, Economic Development Board Chairman Leo Yip said in a
Bloomberg Television interview with Haslinda Amin. Singapore is
poised to benefit as companies expanding in the region set up
headquarters and research facilities here even as they build
factories elsewhere, he said.
Singapore became Southeast Asia’s only advanced economy by
moving up the technology ladder, turning a trading port into the
region’s biggest banking center and a manufacturer of
electronics, petrochemicals and pharmaceuticals. As its bigger,
less-developed neighbors lure companies with faster growth
rates, larger populations and cheaper workers, the island is
forced to find new ways to position itself to stay competitive.
“Singapore is not a low-cost location,” Yip said.
“Companies understand that but companies come here because they
see Singapore as a place where they can harness business
growth.”
Most of Southeast Asia’s 600 million people — about the
combined population of the U.S., Germany and Brazil — will be
middle class by 2020, and that will boost demand for goods and
services, according to Bain Co. The region, known as the
Association of Southeast Asian Nations or Asean, is forecast to
grow 5.2 percent this year and 5.6 percent in 2014, according to
the Asian Development Bank.
Growing Nicely
“Indonesia (IDGDPY) has been growing nicely over the last few
years, and Philippines in the last couple of years,” Yip said.
After investing in China and India in recent years, some global
companies “have realized that they perhaps have not paid the
attention that they need to in Asean,” he said.
The Philippines is poised to be among the five fastest-growing economies globally in 2013 and 2014, according to
Bloomberg surveys. In Indonesia, the world’s fourth most-populous nation, quarterly growth has averaged about 6.3 percent
since the start of 2010.
“Singapore aims to be the New York of Asean,” said Joey Chew, an economist at Barclays Plc in the city-state. “If the
rest of Asean does well, naturally there’s a complementary
effect for Singapore.”
Manufacturing’s Role
While the economy grew at the slowest pace in three years
in 2012, Singapore attracted fixed-asset investments of about
S$16 billion ($12.6 billion). Yip said it’s on track to meet the
2013 target of S$13 billion in commitments. The city overtook
Japan as Asia’s biggest foreign-exchange center for the first
time as trading surged in the past three years.
Manufacturing will continue to play a “very valuable
role” in Singapore, Yip said, as the island-nation ventures
into new industries including space technology. The government
this year set up an Office for Space Technology and Industry as
it seeks a share of the $290 billion global space market.
The 48-year-old nation is also adjusting to an aging
population and a tighter labor supply. An influx of immigrants
has made citizens unhappy, forcing Prime Minister Lee Hsien Loong’s administration to tighten curbs on overseas workers for
a fourth straight year as it steps up efforts to help companies
increase productivity.
Foreign employment growth slowed in the first half of 2013
from a year earlier and the labor market will remain tight for
the rest of 2013, the Ministry of Manpower said last week.
Adjustment Challenge
“Some companies do tell us that the adjustment is
challenging, and we understand that,” Yip said. “For some of
them, they may even have to decide that the way that their
business is conducted, maybe is no longer tenable to do it in
Singapore.”
That’s where the rest of the region comes in. Businesses
looking for a “production footprint” in Southeast Asia will
also start to see its economies as points on a supply chain
rather than looking for a single country to carry out all
operations, Yip said.
“Singapore cannot afford to attract the same kind of land
and labor-intensive industries that we did in the past,” said
Michael Wan, an economist at Credit Suisse Group AG in
Singapore. “If you think of Singapore as a services hub, it
still has many advantages.”
Europe-Style Integration
Officials from the 10-member Asean are working to allow
free movement of goods, services, investment, capital and
skilled labor as part of a European Union-style integration
plan, without the common currency. The Asean Economic Community
is targeted for the end of 2015.
Asia — which had seven of the top 10 exporters of textiles
and clothing and office and telecommunications equipment in 2011
– shipped $5.98 trillion of goods that year, an 18 percent
increase from the year before, according to the World Trade
Organization. Of that, Southeast Asia sent out $1.24 trillion of
products, compared with $432 billion in 2000 and $72 billion in
1980, data from the WTO show.
“Companies around the world already see the market
potential of Asean,” Yip said. “Many of them are looking at
the production potential of Asean.”
To contact the reporter on this story:
Sharon Chen in Singapore at
schen462@bloomberg.net
To contact the editor responsible for this story:
Stephanie Phang at
sphang@bloomberg.net
Singapore Banks on Asean Lure Amid Job Crunch
Brent Lewin/Bloomberg
Buildings stand illuminated at night in Singapore. Singapore became Southeast Asia’s only advanced economy by moving up the technology ladder, turning a trading port into the region’s biggest banking center and a manufacturer of electronics, petrochemicals and pharmaceuticals.
Buildings stand illuminated at night in Singapore. Singapore became Southeast Asia’s only advanced economy by moving up the technology ladder, turning a trading port into the region’s biggest banking center and a manufacturer of electronics, petrochemicals and pharmaceuticals. Photographer: Brent Lewin/Bloomberg
Singapore Banks on Asean Lure as Job Crunch Raises Angst
Không có nhận xét nào:
Đăng nhận xét