Growing partnership - Australia and Singapore trade relations

Business Asia, Sept, 2001 by Tamsyn Smith

Yam believes Singapore's current economic downturn has highlighted a structural weakness in the economy. With electronics accounting for two-thirds of Singapore's domestic non-oil exports, the economy is subject to the vagaries of the global electronic market. Yam says it is worrying that if manufacturing continues to depend largely on electronics exports to grow, Singapore will have a highly volatile economy with a saw-tooth, rather than steady, pattern of growth.

"To achieve sustained economic growth, we need to work on many fronts including, among others, upgrading the skills of our workers, helping our companies to penetrate large and growing markets like India and China, and liberalising our economy," he said.

Economic worries aside, Australia's relationship with Singapore seems set to continue to be an important one. Austrade's Riley says Australia's biggest relationship with Singapore is people-based. Up to 300,000 Singaporeans visit every year, which amounts to almost 10 per cent of the 3.2 million indigenous population (total population is about four million, with the rest being expats), while about three quarters of a million Australians visit Singapore. This people-to-people association allows trade and investment relationships to flow smoothly.

In terms of trade, Riley says Australia is viewed as a good supply base of high quality products, especially in the food area where Australia has the leading brand image.

Knowledge-based exports such as IT and biotechnology are not regarded in close association with Australia, although this is slowly changing, with several recent contracts being won.

"But we have to work very hard to win those because if you say to Singaporeans `where are you going to get your clever designs from?' -- the first reaction is generally the United States," Riley says.

INCREASING
INVESTMENTS

Levels of Singaporean
investment in Australia
from 1991 to 2000.

Year              Total
          investment(*)

1991-92            7244
1992-93            7046
1993-94            8897
1994-95            7844
1995-96          10,747
1996-97          10,680
1997-98          15,728
1998-99          17,839
1999-00          19,800

(*) in A$ million

SOURCE: AUSTRALIAN BUREAU OF STATISTICS