Middle East Online
19 July 2004
Singaporean firms eye Mideast markets
Singapore launches economic campaign in Middle East markets in bid to tap potential of oil-rich region.
By Bernice Han - SINGAPORE
Singapore has embarked on a campaign to strengthen economic ties with Middle East economies in a bid to tap the potential of an oil-rich region usually associated with instability.
Singaporean companies involved in a broad range of activities from telecommunications and port infrastructure to ladies’ footwear are enlisting in the government’s trade and investment initiatives.
The campaign accelerated in recent months, spearheaded by Prime Minister Goh Chok Tong, who made a landmark visit to Iran last week during which both countries agreed to explore the possibility of a free trade agreement (FTA).
It was the first visit by a Singaporean premier to the Islamic republic in almost 30 years, and opening the door for Singaporean businesspeople was one of Goh’s main priorities during talks with Iranian President Mohammad Khatami.
"Once you are friends, business will follow," Goh said in Tehran.
Singapore’s efforts to drum up trade in the Middle East is not surprising since its economy is heavily reliant on exports, analysts said.
The city-state has much to lose should efforts to revive global free-trade talks fail, and pushing for closer partnerships including FTAs is one way of protecting its access to foreign markets.
"It is part of the Singapore strategy to make sure it has free-trade agreements with all of its trading partners," said Robert Scollay, director of the New Zealand APEC Study Centre at the University of Auckland.
"It is hedging its bets if preferential trading agreements become the order of things," he said.
Singapore has already forged FTAs with major partners such as the United States, Japan and Australia, while talks with several others such as India and South Korea are ongoing.
In February, Goh embarked on a 10-day trip to Egypt, Bahrain and Jordan that has yielded significant results for Singapore.
Jordan entered into an FTA with Singapore two months ago, and officials say other nations including Bahrain, Egypt, Oman and Qatar have expressed interest in similar deals.
A popular Singaporean ladies’ footwear retailer, Charles and Keith, is one local company that sees a huge market in the Middle East.
Last week, it signed its first international franchise agreement with Shoe Plaza LLC, a leading player in the Gulf region.
"Everyone is going into China but we feel that China is saturated," said Charles and Keith manager Fong Shee Beng.
A business seminar organised earlier this month by Singapore’s trade promotion agency International Enterprise (IE) Singapore highlighted the opportunities offered by the region.
"Huge investments in infrastructure are being made, not only for oil and gas, but also in ports, airports, telecommunications, roads, healthcare and electricity generation," Trade and Industry Minister George Yeo told seminar participants.
"Singapore companies should now make up for lost time," he said.
IE Singapore said efforts by some Middle East countries such as Bahrain and the United Arab Emirates to reform their economies would open up opportunities for foreign participation.
"This economic liberalisation spells opportunities for Singapore companies who have the wherewithal and endurance to do business in the region over the long haul," a spokesperson for IE Singapore said.
"Though the process will be time-consuming and difficult, the returns can be rewarding."
Plans are in the pipeline to organise a number of trade missions to the Middle East targetting specific sectors such as telecommunications, construction and retail, IE Singapore said.
It is confident the Middle East’s five percent share of the city-state’s total annual trade, worth close to 280 billion dollars, will increase as a result of the ongoing initiatives.