Singapore must be ‘traffic controller’ of business flows amid US tariffs’ supply chain reshuffle: DPM Gan
Singapore cannot compete with neighbours on cost, but is ‘value for money’, says the minister
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[SINGAPORE] Singapore must be an orchestrator of supply chain flows by positioning itself as a focal point where key business decisions are made, rather than simply being a hub for goods to pass through, said Deputy Prime Minister Gan Kim Yong.
Speaking at a regional economic conference organised by the American Chamber of Commerce in Singapore on Tuesday (Sep 8), he noted that many businesses have already set up regional headquarters in Singapore.
However, US tariffs will shift the competitive balance between countries and lead to a major reshuffling of supply chain arrangements.
The Republic must not simply be a “traffic junction” where goods flow through because companies, businesses and governments can decide to bypass it once there is congestion, and seek alternative routes, DPM Gan said.
“We need to be a focal point where major decisions are made,” he said.
Being efficient and cost-effective is crucial, but “we need to go beyond that and become a strategic player in this global supply chain”, added the minister. “That way, we offer strategic value rather than just being an efficient port.”
DPM Gan, who is also Singapore’s trade and industry minister, made these remarks during a fireside chat moderated by Citi’s Asia South head, Amol Gupte.
The two-day conference, held at Shangri-La Singapore, is centred around the business outlook on resilience and growth from Singapore, and comes as the country celebrates 60 years of formal diplomatic relations with the US.
The Business Times is a media partner of the event, which was attended by 250 senior business leaders and members of the diplomatic community.
“One plus one will be more than two”
On multinationals shifting their regional headquarters out of Singapore to other locations in South-east Asia due to cost considerations, DPM Gan acknowledged that Singapore cannot compete with its neighbours on being a low-cost place for doing business – but its proposition lies in being value for money.
“We want to create value for businesses,” said the minister. “Even though we are not the cheapest, we want to make sure Singapore is the most profitable for businesses… and most strategic.”
He separately noted in his earlier keynote speech that the US remains Singapore’s largest investor, with some 6,600 American businesses based in the city-state. Many also use it as a base to serve regional markets.
Such profits may not just be made in Singapore but in the region, he added, pointing to the Johor-Singapore Special Economic Zone and similar collaboration with Indonesia to develop the Singapore-Johor-Riau Islands growth triangle.
“We hope that by working together with our neighbours and our partners, we will help our businesses remain competitive, taking advantage of Singapore’s connectivity and first-class infrastructure and, at the same time… the availability of resources, land, energy and manpower in the region,” concluded DPM Gan.
“This way, one plus one will be more than two.”
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