Singapore-Thailand economic relations are substantial; bilateral trade reaches S$42.1 billion in 2022: PM Lee

SINGAPORE and Thailand have a “very substantive” relationship with strong economic, defence and people-to-people links, said Prime Minister Lee Hsien Loong at the Istana on Thursday (Oct 12).

He was speaking during a lunch that he hosted in honour of Thai Prime Minister Srettha Thavisin, who was making his first official visit to Singapore since he took office in August.

PM Lee noted that the two Asean countries share a close historical friendship, one which dates all the way back to 1871 when King Chulalongkorn picked Singapore for his first overseas visit. “Our countries continue to be bound by close ties today. Economically, our relations are substantial,” he said.

Singapore and Thailand formally established diplomatic relations in 1965 – the year Singapore became independent – and the two countries launched the Singapore-Thailand Enhanced Economic Relationship in 2002.

Singapore was Thailand’s eighth-largest trading partner last year, while Thailand was Singapore’s ninth largest. Bilateral trade increased 23.4 per cent year on year to S$42.1 billion.

“In fact, bilateral trade has increased successively over the last two years, despite the Covid-19 pandemic. Singapore was also the second-highest source of foreign direct investment (FDI) into Thailand for the first half of 2023,” said PM Lee.

A NEWSLETTER FOR YOU

Friday, 8.30 am

Asean Business

Business insights centering on South-east Asia's fast-growing economies.

Sign Up

In his speech, PM Lee said that there were many other areas of economic cooperation, such as in the digital economy and the green economy.

On the former, he cited the successful launch of a cross-border fast payment system involving Singapore’s PayNow and Thailand’s PromptPay in April 2021, which was a first of its kind in the world.

PM Lee also welcomed Thailand’s interest in joining the Digital Economy Partnership Agreement (DEPA), which he said will facilitate Thai businesses’ participation in the digital economy and create further growth opportunities that will benefit both countries.

The DEPA – signed in June 2020 and came into effect in January 2021 – involves Singapore, New Zealand and Chile. It is also the world’s first “digital only” trade agreement.

On the green economy, PM Lee thanked Thailand for its participation in the Laos-Thailand-Malaysia-Singapore power integration project, under which Singapore started importing renewable energy from Laos through Thailand and Malaysia in June last year.

“I look forward to building on this momentum to strengthen energy collaboration with Thailand, which will help unlock Asean’s potential for cross-border renewable energy trade,” said PM Lee. “Our two countries should also cooperate further in carbon trading, to benefit from green growth opportunities while contributing to the global climate agenda.”

He wrapped up by saying that he looked forward to working closely with Srettha and his government to enhance the bilateral relationship even further.

Srettha, who arrived in Singapore on Thursday morning, received a ceremonial welcome at the Istana, where he called on President Tharman Shanmugaratnam.

Tharman wrote on Facebook later: “I discussed with Prime Minister Srettha the opportunities to grow our ties in new areas, especially in trade in renewable energy and high-integrity carbon credits, and in the digital economy. It will benefit both countries, and build momentum for Asean-wide cooperation in these two important areas.”

After his lunch with PM Lee, Srettha visited UOB’s headquarters at Raffles Place where he was hosted by deputy chairman and CEO Wee Ee Cheong, UOB Thailand president and CEO Tan Choon Hin, and other members of the bank’s senior management.

During the meeting, Wee reiterated UOB’s long-term commitment to Thailand and discussed with Srettha about strengthening ties to boost Asean connectivity through FDI.

The 61-year-old Srettha – a property tycoon and the chief of one of Thailand’s biggest real estate developers before he entered politics – was confirmed as Thailand’s new leader after a parliamentary vote in August.

His appointment ended more than three months of political deadlock after a controversial general election in May where Pita Limjaroenrat – the leader of the election winners, the Move Forward Party – was blocked from becoming prime minister.

Singapore is the fourth and final leg of Srettha’s five-day overseas tour to court more regional investment. His trip began in Hong Kong on Sunday, followed by stops in Brunei and Malaysia.

While in Kuala Lumpur on Wednesday, Srettha, who is also Thailand’s finance minister, announced that Malaysia’s national carmaker Proton and its Chinese partner Geely are considering setting up a plant in Thailand to produce electric vehicles.

A day earlier in Bandar Seri Begawan, Srettha invited the Brunei Investment Agency to consider investing more in Thailand’s high-capacity areas such as the services industry, tourism and infrastructure.