While the ongoing COVID-19 pandemic is a worldwide problem, it certainly does not affect all countries equally.
Remarkably, one of the places most dependent on international travel, trade and business — Singapore — not only appears to be among the least negatively impacted, but it is literally turning the crisis into gold (or at least money and golden business opportunities).
In the past few months, I have highlighted how the city-state has actually gotten richer, thanks to rapid appreciation of assets its vast reserves are invested in — yielding a net gain (even accounting for over S$50 billion in various pandemic relief packages) of a few hundred billion dollars.
But stock market inflation, triggered by loose fiscal and monetary policies around the world, is not the only positive outcome the virus has brought to Singapore.
As it turns out, Singapore’s carefully managed response to the pandemic — neither too strict nor too loose — is winning it even more favours with the international community.
Singapore’s pragmatism deals another blow to Hong Kong
In a CNN report published yesterday, contrasting city-state’s policies with those enacted in Hong Kong — which is still pursuing a strict zero-COVID strategy — representatives of foreign companies present in the Chinese city warned that the status quo is untenable and is already driving many away to greener pastures in Singapore.
Strict border closures, freeze on movement of people, high vaccine hesitancy (only 66 per cent of people in Hong Kong have been vaccinated, with the oldest groups lagging badly behind the rest — only 14 per cent of people over 80, and 39 per cent between 70 and 79 have received their jab), lengthy three weeks of quarantine for returning residents and, most of all, the uncertainty about how long this situation is going to last are simply unacceptable for businesses that want to return to normalcy, or at least see a roadmap to it.
These frustrations are only adding to the political problems mounting over the past two years, as Beijing is tightening its grip on the former British colony, prompting flight of both people and money.
Given that China remains staunchly dedicated to stamping COVID-19 out rather than “living with it”, it doesn’t seem that Hong Kong has a chance of becoming an exception to this policy.
Interviewed by CNN, Frederik Gollob, chairman of the Hong Kong’s European Chamber of Commerce, argued that Singapore is gaining an edge on Hong Kong because of “its willingness to signal an end to burdensome pandemic restrictions, even if progress has stalled.”
“This is happening as we speak.” Gollob said he knew of “many examples” of companies where C-suite executives were deliberating whether to shift some operations out of Hong Kong, or which were waiting for “office leases to expire.” He declined to name those firms, citing sensitivity concerns.
With Singapore’s attempt to move forward, “those companies now have an alternative, not because they were actively looking for it, but because of this situation [in Hong Kong], where everything is in limbo and you can’t plan ahead,” he added.
“This moving or non-existing goalpost is exactly the problem … businesses hate nothing more than insecurity.”
CNN, 22 September 2021
From the start, Singapore’s pragmatic approach has been oriented on doing whatever could practically be done, and then living with the outcomes in the absence of better alternatives to near total vaccination of the population, which it has very nearly achieved (with inoculation rates of 80 to 90 per cent across eligible age groups).
Instead of pursuing a utopian ideal of returning to the status quo ante 2020, the Singapore government chose a calibrated reset, erecting whatever protections it could around its population and then gradually reopening domestic economy and, now, its borders to travelers from the safest destinations first.
While it is still far from ‘business as usual’, it shows commitment to getting back to it as soon as possible, instead of keeping businesses in limbo forever.
American executives prioritise Singapore for investment in ASEAN
On the other side of the Pacific, senior business executives in US companies dealing with Southeast Asia, have expressed their preference for Singapore as a destination for future investment in ASEAN, in the latest survey conducted by Standard Chartered, Borderless Business: ASEAN trade corridors.
More than half (58 per cent) of them rated Singapore as one of the top markets for expansion into ASEAN, with 45 per cent picking Indonesia, and 43 per cent picking Thailand.
More recently, the COVID-19 pandemic has further exposed weaknesses in global supply networks – driving a push towards footprint realignment. ASEAN seems well positioned to tap into the opportunities created by these trends. Besides lower production costs in many ASEAN markets, governments across the bloc have also been offering multiple investment and tax incentives to attract global players. Manufacturing capabilities in the region have also matured significantly, making ASEAN a major participant in global supply chains at present. Many companies are further looking to shift their supply chains closer to large end markets such as ASEAN – to improve supply reliability and offer more relevant products to consumers, at greater competitive price points.
Borderless Business: ASEAN trade corridors by Standard Chartered
For decades, Singapore has naturally been considered as the best place to conduct business in Southeast Asia — and a preferred gateway to other countries in the region — but both the successful pandemic response, as well as unpredictable political situation elsewhere, are making it even more attractive today.
It’s so good, in fact, that in the latest Global Innovation Index, released annually by World Intellectual Property Organization, the city-state has received near perfect marks — and best in the world — for its political and legal environment:
Speaking of the index, Singapore has retained a high eighth ranking globally among the most innovative economies, though it handed the Asian crown to South Korea this year, slipping from the top in the continent to second.
That said, as far as foreign investors are concerned, Singapore is even stronger than before — and certainly the safest bet in Southeast Asia, particularly during the pandemic-induced uncertainties that may keep plaguing the world for a few years more.
Pressure makes diamonds
General George S. Patton used to say that stress and pressure is necessary to turn coal into diamonds, and it seems Singapore makes one such fine example.
It’s a country born out of a crisis, which has spent its entire existence dealing with more or less severe crises. A tiny city-state surrounded by much larger, much more populous countries, devoid of resources of its own, and forever jealously competed against.
And yet, it has succeeded far more than those seemingly better endowed by nature.
It is, perhaps, no surprise then that yet another crisis (that the COVID-19 pandemic surely is) not only hasn’t hurt it badly but thanks to long experience and careful, reasonable response, has been turned into a success boosting its position to new heights, while everybody else is suffering.
Featured Image Credit: Getty Images