Singapore has put in place a host of strategies to maintain and build supply chain resilience, which can make us better prepared for disruptions to essential goods, such as food, and industrial supplies and critical supplies used in our essential services.
Diversification of sources
Diversification of sources is key to ensuring a reliable supply of critical goods, raw materials, and intermediate products, so that when one source is disrupted, Singapore has the flexibility to adapt and shift our supply chains.
Singapore has a wide range of trade partners. For example, in 2019, Singapore imported raw materials like fuels, steel and grain from the United Arab Emirates (20.1%), Qatar (13.4%), Saudi Arabia (9%), Malaysia (6.4%) and Cambodia (5.8%) and 157 other partner countries (45.4%), according to data from the World Bank. A similar snapshot can be seen with our chemicals imports, which came from the United States (18.2%), France (12.4%), China (8.1%), Japan (8%), Switzerland (7.4%), and 172 other partner countries (45.9%).
Over the years, Singapore has also inked 26 Free Trade Agreements (FTAs) with economies that represent more than 85 per cent of global GDP. These agreements allow Singapore-based exporters and investors to access overseas markets much more efficiently, such as with tariff concessions, preferential access to specific sectors, faster entry into markets, and Intellectual Property (IP) protection.
Singapore’s diversification strategy is underpinned by our approach of being open to the world. This has allowed the continuous flow of supplies in and out, even under challenging circumstances.
For instance, during the COVID-19 pandemic, Singapore was one of few countries that maintained the free flow of goods and services. We did not impose export controls or restrictions on goods such as N95 masks even when there was a need for these products. Our sea and air ports remained open. This enhanced our reputation as a trusted partner and reliable logistics and transport hub among businesses and the international community. Additionally, supported by an extensive FTA network, agreements were launched with partners like New Zealand, Australia, Canada, Chile, and ASEAN countries to ensure that trade was unimpeded.
Stockpiling and domestic production
Singapore is also working on beefing up supply chain resilience by stockpiling and domestic production.
Singapore maintains a national stockpile of certain essential items, such as rice (under a scheme known as the Rice Stockpile Scheme that first started in 1968), granite used in construction, and masks even before the COVID-19 pandemic began.
As the need for masks ballooned during the COVID-19 pandemic, the also government worked closely with multinational corporation 3M to source for alternative suppliers and more raw materials and intermediate products. The company, as a result, was able to ensure a consistent supply of N95 respirators to healthcare workers in both Singapore and the region. Companies from industries such as gaming, printing, and robotics also joined the effort; they repurposed their premises to set up surgical mask production operations, reducing Singapore’s dependence on foreign suppliers. Another breakthrough came in January 2021 when Singaporean company, ST Engineering, announced it could now produce melt-blown polypropylene filter – the critical filtration layer in surgical masks. This put Singapore in greater control of the entire production chain of the surgical mask, with the capabilities to produce sufficient masks for both healthcare workers and the public.
The way forward
Strengthening supply chain connectivity remains a priority for Singapore, especially as we prepare for the possibility of global and prolonged crises. As we anticipate a new world order, our economy will need to “move towards a more robustly designed form of globalisation, with more diversification, more redundancy built into supplier networks and logistics, and better risk management, which is an often overlooked factor”, said Senior Minister Tharman Shanmugaratnam at the Singapore Summit 2020 conference in September 2020.
Equally important will be our ability to maintain our position as a reliable and trusted hub for trading partners and businesses from any part of the world.
(Video: “Singapore Summit 2020 – ‘Anticipating a New World’: Dialogue with Tharman Shangumaratnam” by the Singapore Summit)