With ‘high trust locations’ sought after in a post-Covid world, S’pore can thrive as Asean hub: Tharman

SINGAPORE — With rising global uncertainties in a post-Covid world, “high trust locations” will be sought after and attributes such as trust and reliability will be fundamental to businesses in deciding where to house regional or global headquarters.

And in this regard, Singapore can seize the opportunity as a hub in the “increasingly important market” of Asean (Association of Southeast Asian Nations) and in Asia, Senior Minister Tharman Shanmugaratnam said on Tuesday (Aug 25).

“The degree of trust and reliability in a country, in a city, systems of governance, is going to be an increasing consideration for a whole range of businesses… So, Singapore has to function as a high trust location,” Mr Tharman said.

He was speaking at the Standard Chartered Asean Business Forum 2020 as part of an online panel discussion on growth opportunities beyond the pandemic.

CNBC journalist Amanda Drury, the forum's moderator, had asked if the competitiveness of Singapore — seen as a high cost location both regionally and globally — will diminish given the rise of remote working.

In response, Mr Tharman also reiterated that cost will never be a comparative advantage for Singapore, relative to the rest of Asean and many parts of Asia. Compared with major economies in the West though, Singapore is still in a “very cost-competitive location”.

TODAY’s Big Read had recently highlighted how Asean can offer Singapore a way forward post-Covid-19. Experts and business leaders interviewed had stressed that Singapore's trade-reliant economy needs to continue building external linkages within Asean, amid the growing backlash against globalisation around the world that could threaten Singapore’s long-term survivability.

Mr Tharman pointed out on Tuesday that there is a role for Singapore that he believes has been “accentuated” in the post-Covid world.

“Our whole raison d'etre is to be a hub within Southeast Asia, within Asia, and to build win-win opportunities because hubs don't take business away from someone else, they help to intermediate, they help to diversify risk... and I think Singapore can do that very well,” he said, referring to how Singapore partners fellow Asean members such as Indonesia and Vietnam. 

Mr Tharman was joined on the panel by Mr Luhut Binsar Pandjaitan, Indonesia’s Coordinating Minister of Maritime Affairs and Investment, and Mr Bill Winters, Standard Chartered PLC's group chief executive.

During the online discussion, Mr Tharman also noted that the relations between the United States and China “might get worse before it could get better”.

And the situation presents an opportunity for the region, he said.

“Fundamentally, we now have the opportunity of building a more resilient and more integrated Asian supply chain.

“In other words, an Asian production region as well as Asian markets that are open to the world and become an example of how, with openness, integration and risk management of supply chains, we can really have a win-win first for those of us within Asia, within Asean, but also with the rest of the world,” he added.