US companies accounted for more than 20% of all FDIs in Singapore.
At a time when Singapore was little more than a barren Southeast Asian island, the United States was amongst the first countries to invest in the nation’s nascent manufacturing industry. Since then, the US has emerged as Singapore’s largest source of foreign direct investment, with US companies accounting for more than 20% of all foreign direct investment in the nation. US companies also invest more in Singapore than in all other Asian companies combined.
Today, the two countries have moved past trade partnerships and are working together to foster security, innovation, and growth across the region. Singapore Business Review spoke with Stephanie Syptak-Ramnath, Chargé d’Affaires, a.i., US Embassy in Singapore, to uncover the benefits that US trade and investment brings to Singapore and the future of the partnership between both nations.
What is the current state of economic relations between Singapore and the US?
In a recent address to the American Chamber of Commerce, FM Balakrishnan noted that US companies played a fundamental role in the development of Singapore. He cited early investors such as Texas Instruments and HP as having “brought technology to Singapore” at a time when Singapore was in its early stages of development.
Some key numbers tell the story of why the United States is Singapore’s most important economic partner and why Singapore is equally important to the United States:
The United States is by far the largest single country investor in Singapore, with direct investments in Singapore worth over US$244b. US companies account for more than 20% of all foreign direct investment in Singapore and invest more than all other Asian companies combined.
In the manufacturing sector, US FDI in Singapore is almost 50% more than all Asian investment in that industry. Turning to financial and insurance services, US investment is 60% larger than that of the EU, which is the second largest investor in that sector.
The number of US companies in Singapore continues to increase at an encouraging rate. In the past three years, the number of American companies registered in Singapore has grown by almost 20% from 3,800 to 4,500. And, our companies don’t only bring investments, they also bring jobs, training, mentorship, and corporate excellence to all that they do.
From consulting to finance, US multinationals alone employ nearly 200,000 employees in Singapore. Our robust trade relationship with Singapore also supports over 250,000 jobs in the United States and approximately 36,000 Americans are employed by Singaporean companies.
US-Singapore economic ties run deep, with a foundation in our bilateral Free Trade Agreement (FTA) - the first US FTA in Asia - now in its 15th year. Singapore is the second largest Asian investor in the United States with over $73b of investments in my country and is the largest Asian investor in the US commercial real estate market.
What is unique in the economic relationship between Singapore and the US?
The Government of Singapore is forward leaning in building an ecosystem that fosters innovation and entrepreneurship through incentivizing startups and nurturing small and medium enterprises, including through its universities and government-affiliated institutions. American companies, universities, and individuals have been involved in many of the innovation centres and research hubs that seem to be opening in Singapore every month. Singapore’s efforts to boost the technology sector align with the strengths of US businesses, positioning the United States as a key partner in making Singapore and the region more economically competitive in the future.
In addition, the United States and Singapore work together for greater impact in the wider region. For example, one unique mechanism that further strengthens our cooperation for the benefit of the Asia-Pacific region is the Third Country Training Program (TCTP). Aimed at providing technical assistance and training to ASEAN member states, TCTP focuses on connectivity, sustainable development, and regional resilience. Since the TCTP program was established in 2012, Singapore and the United States have jointly organized 47 workshops and trained over 1,200 ASEAN member government officials in the areas of trade, environment, health, urban planning, and disaster management, among others. We recently signed an MOU to apply that same model to cybersecurity efforts in the region, another common area of economic concern for our two countries.
What are the opportunities for Singaporean businesses in the US?
US Embassy Singapore is recruiting and will be accompanying a Singapore investor delegation to the SelectUSA Investment Summit June 10-12 in Washington, D.C. This is the highest-profile event dedicated to promoting foreign direct investment (FDI) in the United States. It connects qualified foreign firms directly with US economic development organizations to facilitate business investment and job creation. Each Investment Summit focuses on the US investment environment, industry trends, and new opportunities.
Additionally, the Investment Summit features senior government officials, C-Suite business executives, and other thought leaders. The Investment Summit plays a vital role in attracting and facilitating international investment into the United States by raising awareness of the wide range of opportunities and positive business climate and facilitating vital direct connections between investors and economic development organizations (EDOs).
Any trade and investment events that Singapore companies can get involved in?
The US-ASEAN Smart Cities Partnership (USACP) is a responsive, multi-year commitment that will benefit the ASEAN Smart Cities Network (ASCN), which started in Singapore during its Chairmanship year of ASEAN, by addressing smart city challenges across a range of sectors, especially in the areas of infrastructure, energy, and information and communications technology.
There is also the bilateral commercial collaboration framework led by the US Department of Commerce and the Singapore Ministry of Trade and Industry, which was announced by Vice President Pence in November 2018 in Singapore. The framework aims to foster links between US and Singaporean companies in fields such as standards, additive manufacturing, blockchain, e-commerce, and driverless cars. Both the Singapore Business Federation and the Singapore Manufacturing Federation are working with the US Commercial Service Office at the US Embassy to find opportunities for Singapore companies to work with their US counterparts.
US Embassy Singapore’s Commercial Service Section and American companies will also be active with the following trade shows in Singapore: ConnecTechAsia (18-20 June), ITB Asia 2019 (16-18 October), Singapore FinTech Festival (11-15 November).
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