By Fanny Potkin and Yantoultra Ngui
SINGAPORE (Reuters) -Singapore is working with Malaysia and Indonesia to build a strong regional supply chain base to take advantage of changes in global manufacturing flows, the city-state’s top investment executive said on Thursday.
Reaping the benefits of rising investments from India, China and Southeast Asia in recent years, Singapore is increasing its cooperation with its neighbours to establish a manufacturing base that would include Singapore, the southern Malaysian state of Johor and the nearby Riau Islands of Indonesia, Economic Development Board (EDB) Managing Director Jacqueline Poh said during an LSEG and Reuters Newsmaker event.
“We’re increasing the efforts on our regional supply chains … so that with Malaysia and Indonesia … together as Southeast Asia, we can be a far stronger proposition as a production base,” Poh said.
The efforts would help extend Singapore’s position as one of the world’s financial centres at the same time global wealth continues to tilt toward Asia. The city-state is also tapping into that shift by establishing itself as a wealth management hub for the ultra-rich.
Still, competition for a slice of the pie is growing across the region as businesses and societies shake off the long tail of the coronavirus pandemic.
Poh warned that the EDB was expecting a more muted 2023 in terms of investments, after a record 2022 where Singapore secured S$22.5 billion ($16.5 billion) in fixed asset investments, with more than 66% coming from electronics manufacturing projects.
“The main driver for investments was actually the semiconductor super cycle,” Poh said, with this reversing due to an electronics downturn.
Singapore currently accounts for 11% of the global semiconductor market, with 20% of global semiconductor equipment manufactured in the country.
Poh also told the audience that the EDB was focusing on increasing “green finance” and renewable energy investments, including in the solar, wind and hydropower sectors.
FAMILY OFFICES
Singapore is continuing to position itself as a safe haven for the wealthy, who are setting up family offices to manage their funds outside of their home countries to avoid political turmoil and economic uncertainty.
The number of single family offices, which handle investments, taxation, wealth transfer and other financial matters for the super rich, has surged in Singapore to 1,100 at the end of 2022 from 400 at end of 2020, data from the Monetary Authority of Singapore (MAS) showed.
Poh pointed to efforts that Singapore has taken to cultivate these family offices by bolstering educational programs aimed at asset management and financial planning.
“We’ve worked with the Wealth Management Institute at the MAS to start a brand new course for family offices so that our family offices have to attend this new sort of training to better understand how they can deploy their capital,” she said.
A spokesperson for the EDB said that the program is voluntary and aims to support new and existing family offices in Singapore.
(S$1 = $0.734977)
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