This article gives a brief overview on Singapore’s exports scenario.
Singapore's exports have witnessed tremendous growth over the last three decades, reflecting the outward orientation of the economy and the strong growth in world trade. But due to the openness of the economy, the spatial pattern and composition of Singapore's exports are susceptible to changes in regional and global economic trends.
Best and Worst Performing Export Markets
Malaysia recorded the largest positive net shift for Singapore's exports from 1991-1996, followed by Hong Kong, China, Ireland and France. On the other hand US, Germany, Thailand, Italy and Japan in that order had the largest negative net shifts.
Within the region, Singapore's exports to ASEAN (Malaysia, Thailand, Philippines, Brunei and Myanmar) posted the largest positive net shift. This underlines the significance of the ASEAN countries to Singapore in terms of export. After ASEAN, the East Asian market of China, Hong Kong, Japan, South Korea and Taiwan witnessed the next biggest positive net shift. At the same time, Singapore's export to the North American market-the US and Canada experienced the largest negative net shift, followed by the European Union.
Export Performance by Commodity Section
An analysis of Singapore's export, commodity wise, revealed that Singapore's strong export performance in Malaysia, Hong Kong, China, Ireland and France was underlined by the tremendous growth in exports of machinery and transport equipment(SITC 7) comprising mainly electronics to these countries. Even to the five export markets with the largest negative net shifts, viz the US, Germany, Thailand, Italy and Japan, Singapore’s exports of machinery and transport equipment grew faster than the overall export growth except in Germany and Italy.
Within the category of SITC 7, exports of office and data machines (SITC 75) and electrical machinery (SITC 77) were mainly responsible for the positive net shifts. The positive growth in electronics exports to these five markets reflected Singapore's favorable industrial structure that was skewed towards an industry experiencing rapid growth over the last several years.
Singapore's exports of mineral fuels (SITC 3), comprising primarily refined petroleum products, did not grow as fast as its overall exports. With the exception of China, Hong Kong and Ireland, all the other markets registered a negative net shift, reflecting the state of an industry beset by over-capacity and low refining margins. Singapore faces increasing competition from South Korea and the Middle East, notably Saudi Arabia. Moreover, increased import-substitution by Thailand and Malaysia has limited Singapore's exports to these countries.
Exports of chemicals and related products (SITC 5), in general, also grew slower than Singapore's overall exports. Among the ten major export markets, the US experienced the largest negative net shift, followed by Malaysia and Japan. However, with projected healthy growth and capacity expansion for the industry over the next few years, its exports could well assume increasing importance.
Implications for Singapore
The Singapore Government's decision to promote electronics industries has been justified by the impressive performance of electronics exports. Secondly though electronics would remain the mainstay of Singapore's exports, industries such as chemicals, mineral fuels, lubricants and miscellaneous manufactured articles also have tremendous potential and should not be overlooked.
Singapore would have to explore new export destinations, due to the decrease in the exports to US, Japan and the EU. While Singapore has been successful in penetrating some non-traditional markets, there is further scope for identifying trading opportunities in other less familiar markets.