Singapore is a country with no natural resources, but a precious natural endowment in its geographical location has allowed it to tap into global markets, earn a living and be self-reliant, Health Minister Ong Ye Kung told the House yesterday.
"It is a lasting advantage, but one which requires us to work very hard to realise and sustain. If we succeed, it helps compensate for our lack of size," he added, speaking on how the embrace of globalisation and free trade agreements (FTAs) are critical to Singapore.
The former trade negotiator said he felt a duty to explain how FTAs work and rebut the false allegations by the Progress Singapore Party regarding the India-Singapore Comprehensive Economic Cooperation Agreement (Ceca).
"To prepare for this statement, I had to dig up my old negotiating notes and do quite a bit of revision!" he said.
Singapore's strategic location has made it a unique interchange, connecting East and West, Europe, the Middle East, India and China. This has allowed Singapore to capture trade flows through the Strait of Malacca, and helped PSA Corp to become the largest container transhipment port in the world, with the maritime industry sustaining 160,000 jobs here.
Singapore has also grown into an aviation node, with Changi Airport and the industry supporting 190,000 jobs before Covid-19. In turn, this connectivity has helped build up other sectors, with manufacturing sustaining 440,000 jobs and the financial services sector employing 170,000 people.
Meanwhile, some 50,000 international firms operate here, with 750 making Singapore their regional headquarters. Global technology firms are also setting up their innovation centres here.
"None of these would have happened without a clear strategy, implemented well," said Mr Ong. "It was a long and painstaking process... Clean government, rule of law, safety... political stability, good infrastructure, high standards of education, openness to the world - all this, and more, come together to make us a good place to invest."
Singapore's network of 26 FTAs, including Ceca, are a keystone of this economic super-structure that has been built, he stressed.
Trade pacts require countries to remove or lower tariffs on all trade between partners, which is of "tremendous benefit", he said. This is because other countries typically impose tariffs on thousands of items. Singapore imposes duties on only three alcohol products - beer, stout and samsu.
He added that FTAs are especially important to small and medium enterprises, helping them gain access to overseas customers and break free of the constraints of the small domestic market.
FTAs also require governments to protect foreign investments and ensure that regulations are imposed fairly and equally on both local and foreign companies.
Mr Ong said local firms wanting to expand overseas would want Singapore to negotiate such protections for them in foreign markets. He added that FTAs have spurred Singapore companies to venture abroad, with investments overseas going up from $200 billion in 2005 to over $930 billion in 2019.
Meanwhile, newer FTAs even set certain environmental and labour standards, and Singapore believes this reflects "contemporary concerns" in free trade, he added.
Singapore could not have advanced the welfare of its citizens as much without FTAs, he said.
"When you attack FTAs, and worse if your attack succeeds, you are undermining the fundamentals of our existence, of the way we earn a living, all the sectors FTAs are supporting, and the hundreds of thousands of Singaporean jobs created in these sectors."