Chan Chun Sing: We need to take uncertainties in Malaysia very seriously so that economy is never held to ransom

The Trade and Industry Minister said that Singapore needs to diversify in order not to be dependent on a single source

Photo: YouTube screengrab

Singapore— In Parliament on March 4, Monday, the country’s Trade and Industry Minister, Chan Chun Sing, brought attention to the economic impact that troubles in Malaysia can bring to Singapore.

Mr Chan also said that other countries in South East Asia will also feel the impact of events in Malaysia, because of being in the same economic region.

This is why the Trade and Industry Ministry has recently “encouraged our companies to seriously consider the impact of the Malaysians’ political and economic trajectory” Mr Chan said, in the context of discussing the ministry’s budget in Parliament.

Member of Parliament Low Thia Khiang asked a question concerning whether or not Singapore’s economy would be affected by current bilateral tensions, especially if territorial disputes over port limits and airspace stay without resolution.

The Trade and Industry Minister replied to Mr Low’s question and emphasised the importance of remembering that Malaysia is part of ASEAN. Mr Chan said, “Our position is that we continue to look for win-win situations and win-win projects together with Malaysia because we always believe that a prosperous Malaysia that is doing well economically is good for Malaysia, (and) is good for the region.”

However, he did agree that should Malaysia’s economy be disrupted, this would have a considerable impact on Singapore.

And he has communicated the same message to Singaporean companies. “Over the last few months, MTI has always encouraged our companies to seriously consider the impact of the Malaysian’s political and economic trajectory.”

He assured Members of Parliament that Singapore “will never be held ransom by dependence on one particular market… regardless of whether it is Malaysia or any market’’ as he encouraged companies to seek diversification of their sources, supply chains, and markets.

Mr Chan told MPs that companies in Singapore should understand that depending only on Malaysia as a supplier carries significant risks. He added that Singaporean businesses are already talking about the likelihood that supplies from Malaysia will be disrupted.

One example is that in the middle of last December, Saifuddin Nasution Ismail, Malaysia’s Minister for Domestic Trade and Consumer Affairs announced that Malaysia was considering ceasing or perhaps limiting the export of eggs, in order to make sure that the country’s domestic market would have an adequate supply.

The price of eggs had risen steadily in Malaysia towards the end of 2018, and Minister Saifuddin Nasution Ismail announced that an investigation had been launched to determine whether cartel-related operations were affecting egg prices.

Additionally, bird flu also threatened the supply of Malaysia’s eggs. Malaysia has been the biggest supplier of eggs to Singapore, proving 73 percent of the country’s needs. Singapore also gets eggs from Australia and New Zealand, although these are quite a bit more expensive than eggs bought in Malaysia.

Singapore’s food agency Agri-Food and Veterinary Authority (AVA) responded by announcing its plans to obtain eggs from alternate sources, such as the Philippines. The AVA said on December 13, “Our importers are still getting their usual egg supplies from Malaysia. Nevertheless, in line with our overall food diversification strategy, we have a wide range of alternative sources for our eggs, including our local farms.”

Mr Chan also agreed with Low Thia Khiang that because Malaysia is Singapore’s closest neighbor, its issues should be taken seriously.

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