Singapore is among the few nations with whom virtually any economic power is happy to know and do business. The economically potent and very favorably located island nation is a member of several regional economic cooperatives that already are making massive impacts on the global economy, including the United States and China.
Singapore is a longstanding member of the Association of Southeast Asian Nations (ASEAN), the Asia-Pacific Economic Cooperation (APEC) and the newly formed Regional Comprehensive Economic Partnership (RCEP). About the only locales with whom Singapore is not directly engaged in economic regional partnerships are Europe and Africa, which are located on the other side of the globe.
Location and internal stability are two big reasons why Singapore is a welcome member of the international economic community. Singapore has a strong representative government that recognizes and protects intellectual property rights.
How Singapore helps your company grow in ASEAN
The ASEAN is the dominant international economic entity in southeast Asia and includes a diverse mix of 10 national governments and local economies in one of the world’s fastest developing economic regions. The 10 member nations have a combined population exceeding 650 million and a combined gross national (GDP) product of $2.8 trillion.
When it comes to combined economic might, the ASEAN nations compare very favorably to virtually any other economic power. The ASEAN member nations and their respective populations and national GDP in U.S. dollars are:
- Singapore, 5.7 million citizens and $372.1 billion.
- Indonesia, 270.6 million citizens and $1.12 trillion.
- Thailand, 69.63 million citizens and $543.5 billion.
- The Philippines, 108.1 million citizens and $376.8 billion.
- Malaysia, 31.95 million citizens and $364.7 billion.
- Vietnam, 96.46 million citizens and $261.9 billion.
- Myanmar, 54.05 million citizens and $76.09 billion.
- Cambodia, 16.49 million citizens and $27.09 billion.
- Laos, 7.17 million citizens and $18.17 billion.
- Brunei, 433,285 citizens and $13.47 billion.
Source: The World Bank
ASEAN headquarters are located in Jakarta, Indonesia. The organization annually chooses a chairman or chairwoman from among the 10 represented nations to lead it for the year. The 2021 chairman is from Brunei, and the ASEAN theme for the year is “We Care, We Prepare, We Prosper.”
The chair is selected each year from a member nation and done alphabetically based on the nation’s name. With a Brunei chair in place, the organization has rotated through all 10 nations and is starting the rotation once again.
The ASEAN nations first united in 1967 with Indonesia, Malaysia, the Philippines, Singapore and Thailand making up the original member nations. ASEAN member nations signed a Treaty of Amity and Cooperation in Southeast Asia, which focuses on providing mutual respect while ensuring non-interference in each nation’s own internal matters.
ASEAN membership has grown as more economies open up and engage in international relations and economic interests. Member nations in 1995 signed a non-nuclear weapons treaty that affirms none of the member nations will seek nuclear arms capability. The member nations also work to prevent currency speculation and corruption and in 2007 adopted the ASEAN Charter, which provides a constitutional record and framework for effective and fair governance.
Economic Impact of ASEAN Agreement
The Asian Development Bank Institute suggests the ASEAN agreement is having a very positive impact regionally through sustainable economic development. China in particular experienced a tremendous amount of economic growth as an assembly base for manufactured goods. The ASEAN agreement helps to shift that assembly base to member nations, like Indonesia, Thailand and other growing economies.
Japan-based multi-national enterprises in particular utilize ASEAN states and their respective workforces to provide assembly of manufactured goods, including autos, computers and high-tech industries with global reach. With assembly of manufactured goods on the rise in ASEAN states, so are local economies and economic opportunities for multi-national enterprises.
Those kinds of economic developments show lots of promising growth and opportunities for multinational entities. But instead of establishing headquarters in developing economies that have less-developed protections for intellectual property as well as access to critical utilities and other necessities, Singapore is a perfectly suited locale with all of the requisite legal protections in place for intellectual property and established business practices.
How Singapore ALSO helps your company grow in Asia-Pacific (APEC)
Singapore also is a member of the Asia-Pacific Economic Cooperation (APEC), which is a collection of 21 Asia-Pacific nations, including virtually all fully developed economies in the very wide region. Those include the United States, China, Japan, Australia, Russia, the Republic of Korea, Hong Kong and Canada.
With the world’s two largest national economies and most of the developed and developing nations in the region participating, APEC represents the single largest economic regional economic cooperative. APEC nations work together to accelerate their regional economic integration while promoting balanced, sustainable, inclusive and innovative economic growth within all member nations through regional cooperation.
The regional cooperative acts like many similar international organizations by reducing importation and exportation costs to boost economic growth and activity among member nations. APEC works to improve local infrastructure and connectivity to improve supply chain logistics and enable increased trade.
How APEC grows local and regional economies
The APEC agreement enables member nations to work together as a cooperative focused on economic and trade impacts that benefit all nations. A dual “bottom-up, top-down” economic strategy seeks to unilaterally improve economic conditions and development while enabling growing economies as well as established ones to thrive. Growing economies can provide many of the assembly operations as well as growing consumer demand for the same goods via job growth.
APEC has four core committees working in unison to enhance and grow sustainable and inclusive economic development across the region. The four core groups make policy suggestions for APEC group consideration, which could include infrastructure improvements or other projects designed to enhance and support sustainable economic growth and prosperity.
As policy decision are made, APEC provides funding for various initiatives, which greatly helps with the “bottom-up” approach of economic development. Much of that development is focused on increasing local capacities within member nations, including economic output. Increased GDP adds up to increased jobs growth and economic opportunity for citizens within the member nations.
As local economies continue to grow and emerge into more mature ones, they increase national, regional and global trade and economic opportunities. The focus on sustainable, long-term economic growth and prosperity is what really makes the APEC initiative an especially promising one and is yet another example of how Singapore is ideally situated to enable ongoing success for multinational entities that choose to set up regional or global headquarters there.
The APEC economic impact
The APEC member nations accounted for 60 percent of the world’s GDP and 48 percent of global trade in 2018. The 21 nations have a combined population of 2.9 billion with rapidly improving local economies spurring further economic opportunities for all member nations.
In 1989, the 21 member nations posted a combined $19 trillion in real GDP. The subsequent formation of APEC and its efforts to improve conditions resulted in $46.9 trillion in GDP in 2018. The improved economic output improved the per-capital incomes in member states by an average of 74 percent and lifted an impoverished generation to middle-class status within 30 years.
That kind of economic growth shows the very positive effects APEC is having on its member states and how inclusion is helping to provide economic benefits and true prosperity for millions of people who otherwise would be impoverished. As those local populations continue to improve their respective situations, the growing middle classes likewise become more active and generate a wide range of economic opportunities for multinationals that produce the goods and provides the services that help growing economies to sustain themselves while benefitting entire regions and the world.
Why choose Singapore among APEC states
Singapore is an especially business-friendly environment that enables multinationals to set up shop locally in as little as 1.5 days. The primary requirements are an actual physical location, such as an office, and a board of directors that includes at least one resident of Singapore. A multinational also must do banking within Singapore and have an active account with a positive balance of $1 or more.
Singapore also has one of the world’s best and busiest seaports and is a regional air transportation hub what generally is regarded as the world’s best airport in Changi International. Its economic and direct ties to the world and the rapidly growing Southeast Asian region in particular makes Singapore the perfect place to do business.
The World Bank and other global economic organizations continually rank Singapore among the world’s best business locales with business-friendly environment. Singapore is home to many of the world’s leading brands, including Apple, BMW, Google and Sony. Such brands fully affirm the important Singapore plays in the regional and global economies. Singapore’s inclusion among APEC states only increases the benefits and future opportunities for entities that choose to establish headquarters and operations there.
Singapore helps your company grow with the Regional Comprehensive Economic Partnership (RCEP)
A third and more recent regional economic partnership fully affirms the economic significance of Singapore and why any multi-national enterprise would be smart to do business there. Singapore joined 14 other nations in creating the newly formed Regional Comprehensive Economic Partnership (RCEP) on Nov. 15, 2020. The economic cooperative is comprised of the ASEAN member nations plus China, Australia, South Korea, Japan and New Zealand.
The member nations comprise about 30 percent of the world’s population and much of its economic might. The Brookings Institute estimates the RCEP annually could add $209 billion to global incomes and boost world trade by $500 billion by 2030. That kind of economic growth and impact likely would offset any economic losses experienced by trade tensions between the world’s largest individual economies – the United States and China.
The Brookings Institution is a nonprofit based in the District of Columbia and is focused on economic public policy at the local, national and global levels. The Brookings Institution is comprised of more than 300 global experts from governments and academia located around the globe.
The Brookings Institution says the RCEP encourages member nations to develop regional supply chains while also taking into account cultural and political differences. Singapore is an especially adept partner that already has significant commerce, trade and access to virtually the entire developed world. Regionally, China and Japan are the most dominant economies, and Singapore is active with both and has numerous shipping and airline connections to enable commerce and business within both economic powers.
With many Southeast Asian states and their respective economies growing rapidly, the RCEP is poised to deliver great benefits to well-organized and run multinational entities. The Brookings Institution estimates the RCEP annually will generate $19 billion in economic output in each member nation by 2030. That is a significant amount of annual economic growth which, if achieved, presents a great deal of opportunity for entities that get in early enough to grow with the local and regional economies instead of waiting for the markets to become fully mature.
The RCEP also enables member nations and the multinational entities that do choose to locate and do business within them to gain access to the China-led “Belt and Road” initiative that intends to boost economies in mostly land-locked nations in East Asia. Improved road, rail and eventually commercial airline access to relatively remote and land-locked nations is certain to increase economic opportunities for multinational entities that choose to set up shop in Singapore.
Further economic agreements could further improve the economic opportunities. Officials in Japan, China and South Korea are working on a proposed free trade agreement, and the RCEP is enabling it to occur more rapidly. China President Xi Jinping recently announced he would accelerate negotiations to make the proposed free trade agreement happen now that the RCEP in in place and provides a framework from which to proceed with more meaningful discussions.
Global communications capability drives success
While Singapore has many outstanding economic partnerships in place that help to affirm its outstanding business locale, you still need world-class communications capability to make global entities work. Singapore continually ranks among the world’s best-connected nations with exceptionally high international informational flow.
Incoming data from a wide range of global nations affirms Singapore is among the best-connected locales on the planet and has world-class infrastructure to maintain and improve it over time. The ability to communicate rapidly and accurately helps to make the world a smaller place while ensuring multinational corporations and other entities can continue to operate efficiently.
Whether the communications needs to be done remotely via cloud-based communications technology or in person using the outstanding airport facilities at Singapore, the island nation has the kind of world-class infrastructure in place to enable and support it. The business-friendly atmosphere, connectivity, legal protections and numerous international trade agreements all ensure any multinational that chooses Singapore as a regional or global headquarters is ideally situated to ensure your company’s ongoing success.
The ability to set up shop quickly, protect your assets and intellectual property, and establish trade with various member nations of ASEAN, APEC, and RCEP regional trade agreement nations is a massive opportunity, and Singapore makes it very easy to establish your business there.