In October 2019, just months before the global COVID outbreak, Lee Pak Sing joined Enterprise Singapore, the Singapore government agency championing enterprise development. In his role as Assistant Chief Executive, Pak Sing is having to lead the agency during disruptive times. This experience is a stark reminder of the need for the city state to remain competitive as an international trading and financial hub. Here, Pak Sing talks to Fatima Sadouki, Senior Writer for HC Group, about the fresh strategy he and his team have adopted both to preserve Singapore’s global standing and for the long-term benefit of Singaporeans.
Part of the DNA
Mr Lee Pak Sing didn’t have to convince me that he has a truly international mindset. The first question he asked me when we connected on our video call was where in France I was calling from. This is not unusual with remote working now a norm for many of us across the globe.
But the spontaneity and warmth with which he engaged the conversation set the tone for the rest of the interview. Despite the formal nature of our appointment, Pak Sing’s relaxed facial expression revealed a real interest in what Toulouse has to offer. “I must come one day,” he cheered.
This genuine curiosity to engage with others showed itself more than once. In fact, maintaining an international outlook was a point he emphasized several times. This is hardly surprising considering his role as Assistant Chief Executive of Enterprise Singapore, the Singapore government agency supporting the growth of Singapore as a hub for global trade and start-ups.
Singapore’s historical legacy as one of the world’s largest trading and financial hubs dates back to the 1800s as a key trading point for spices, and later in the 1900s for commodities such as rubber, tin and oil. Trading, combined with favourable economic and fiscal terms, is what allowed the small city-state of 5.45 million inhabitants to gain its current status on the international trading map.
“Our nation developed through trading. I want to ensure that trade remains important to us. Not because it is just another sector, but because trade is our DNA and should be part of our instinct to remain open to the world,” Pak Sing said.
Today Singapore has one of the most diverse pool of trading firms from all over the world. “We are home to global oil and gas majors, global traders of soft and hard commodities, and utilities to name a few. They could be firms headquartered in the West or regional industry heavyweights from major markets like China, India, Central Asia and South America. Some familiar names include Glencore, BHP and Wilmar,” said Pak Sing.
We are encouraging companies to develop more sustainable products such as plant-based meat and last year we imported our first carbon-neutral LNG cargo.
New trade flows
But there is no dwelling on past legacies. Pak Sing is realistic about the challenges ahead. He has a clear mandate to ensure that Singapore remains relevant as a trading and financial hub as the coronavirus pandemic has deepened the vulnerabilities of global supply chains.
Before joining Enterprise Singapore in October 2019, Pak Sing served as Divisional Director within Singapore’s Ministry of Manpower, where he was responsible for legislations such as the Employment Act and the Retirement & Reemployment Act. “In the Ministry of Manpower, my role was mainly about dealing with policy issues. To deal with policy issues, you need to be very clear about what the problem is, the cause of the problem, and the possible solutions and trade-offs.”
This is clearly supporting his current role. “In the same way I approach my work in developing the trade sector, I need to understand what issues are facing the sector,” he continued. “And of course, after my stint at the Ministry of Manpower, I developed the instinct to ensure that whatever I do, I can create good jobs for Singapore, and Singaporeans.”
Like most economies, Singapore was severely impacted by the effects of global lockdowns on trade and industrial activity in 2020. With its wholesale trade sector accounting for 17% of its GDP, Singapore suffered its steepest economic contraction on record of 4.1% in 2020, before rebounding by an estimated 7.2% in 2021. But before COVID broke out, GDP had grown by 1.1% in 2019 down from a 3.7% in 2018, primarily due to global trade disruptions.
But Pak Sing sees the glass half-full and prefers to talk about the opportunities this is offering. The growing need to boost supply chains’ resilience coupled with the imperative to support the transition to a more sustainable economy means there will be new trade flows, he said.
Singapore has taken clear steps to capture these trends and compete with other hubs. “We are building on our diverse pool of traders to deepen and widen trade, to trade new green products like biofuels, electric vehicles metals, and from new geographies,” Pak Sing said. “We remain committed to connecting with the rest of the world,” citing as an example the recent signing in January 2022 of a Free Trade Agreement with the Pacific Alliance, which comprises Chile, Colombia, Mexico and Peru, a bloc with a combined GDP of more than $2.6 trillion.
Sustainability
As part of its Green Plan 2030, Singapore announced in 2021 the creation of a new global carbon exchange with a view to becoming a global centre for carbon trading and a national ecosystem of related services such as green finance, verification, credits trading & risk management.
Specifically, digitalization, fintech and key digital tools like artificial intelligence and blockchain are key to Singapore’s efforts to become a leading region for sustainability products. “We are encouraging companies to develop more sustainable products such as plant-based meat and last year we imported our first carbon-neutral LNG cargo,” Pak Sing said. He pointed to a suite of other dedicated programmes, including the Green and Sustainability-Linked Loan Grant Scheme to support corporates by defraying the expenses of obtaining green and sustainability-linked loans.
Under the Enterprise Sustainability Programme, Enterprise Singapore supports companies through trainings on sustainability and through funding to boost their capacity to achieve sustainability goals. “We also have an investment arm, SEEDS Capital, which invests in innovative, early-stage technology start-ups, including those in the sustainability space,” Pak Sing added.
Digitalization is supporting new ways of trading, Pak Sing went on, notably through data-sharing platforms designed to boost transparency and efficiency such as the Singapore Trade Data Exchange (or SGTraDex). “For example, if you were able to put the trade finance registry on the common data infrastructure, it reduces the risk of trade fraud,” he said.
Relevant to others’ supply chains
The pandemic shed light on the long-standing necessity for Singapore to find new ways to attract investment and people, amid socio-economic challenges such as an ageing population. Before the pandemic, the city-state was already exposed to externalities, from the implications of the global financial crisis, fluctuations in key markets, to other trade disruptions.
Much of the strategy going forward is based on boosting offshore trade by building on the presence of international trading firms in the city-state. “Singapore cannot produce everything itself for exports. But we can still be relevant to others’ supply chains,” Pak Sing said.
“Today we have a pool of about 400 companies that do offshore trade. Companies manage that trade flow between other countries, for instance from Brazil to China, out from Singapore. The goods may not have to come through Singapore,” Pak Sing explained.
In the context of COVID-induced disruptions, Pak Sing sees a role for Singapore as a trusted and reliable node to facilitate trade and transactions between different counterparties. “COVID has proven that we could remain open – since we did not close any of our ports. So instead of shipping directly from country A to country B, a company can decide to put some of their products in Singapore where these will be shipped from. Country B would be able to get the products from Singapore when they may not get the product from country A.”
We are fully committed to remaining open to international talent because as in all trading hubs, what propels the company’s growth is this pool of trading professionals.
Diversified Trade Strategy
But this diversification plan is not limited to geographies. Pak Sing said he and his team are aiming to scale up the trade of newer products and type of activities across the value chain. Singapore’s advantage is that it already has the adequate mechanisms to implement this.
Firstly, existing schemes such as the Global Trader Programme, will be leveraged to encourage companies to increase the scale of their trading volume out of Singapore. “Because trading is a scale game, you do need to have sufficient scale in order to be competitive,” he stressed.
Secondly, companies can expect more support from Enterprise Singapore when it comes to boosting the scope of their activities, beyond just buying or selling. “We want them to increase the scope of the activities to go upstream or downstream,” he said. “So you may be trading peas, soya beans, and other agri commodities. But we want you, now that you are trading in Singapore, to invest in R&D into new products like plant-based proteins,” he said.
Thirdly, Enterprise Singapore has made innovation an integral part of its strategy. For instance, the agency launched in 2021 the Singapore Agri-Food Innovation Lab (SAIL) in partnership with the Nanyang Technological University (NTU Singapore) with a view to accelerating innovation and seize new opportunities in the agri-food sector. “SAIL is a platform where agri commodity players are brought together with tech companies that can provide solutions to the problems that agri commodity players have. Plus, it can leverage on NTU’s research capabilities,” he added.
SAIL is just one example of the platforms that Singapore created to act as a facilitator for the trading community, Pak Sing said. Another case is the Global Innovation Alliance (GIA), a network of Singapore and overseas partners across major innovation hubs and key demand markets in 16 cities, with a focus on technology and innovation. “We are doing in innovation what we are doing in trade – connecting the rest of the world to each other through Singapore. Now, for example, a French company will be able to find a partner to work with in Indonesia through the GIA network. Similarly, a Vietnamese company can also tap on the network to find a partner in Germany. So other countries and cities see Singapore as a place where they can reach the rest of the world through us.”
Talent
The last axis of this strategy is based on talent management. Talent is critical for the wholesale trade sector to remain competitive, Pak Sing emphasized. The sector employed more than 300,000 individuals in 2020, or around 8% of the population. Out of these, over 60% are in front-office professional, managerial, or executive positions.
Yet, there are challenges, from attracting competent young graduates in the sector, to managing a shortage of expatriate talent pool. This has particularly been an issue since COVID 19 broke out, when cross-border movement was heavily restricted from economies going into lockdowns.
But Pak Sing stressed that Singapore remains open to international talent. “We are fully committed to remaining open to international talent because as in all trading hubs, what propels the company’s growth is this pool of trading professionals.”
As for younger talent, the aim is to attract more graduate candidates in Singapore with a view to enrolling them in specific schemes. “We work with our universities and polytechnics to conduct specialized training programmes to equip students with the skills to join the trade companies,” Pak Sing said. Additionally, under the Leadership Development Initiative, international trade companies commit to groom high calibre employees to take on more challenging assignments, including taking on overseas roles to develop a better understanding of the global markets.
Given the importance of the trade sector for the Singaporean economy and population, supporting the creation of new jobs in this segment is the primary measure of success for Pak Sing. Impacting younger generation by offering them new opportunities is something he is passionate about and experienced during his stint as Director Culture and Education of the Singapore Olympic Committee from 2008 to 2010, when he led the development and implementation of the world’s first Youth Olympic Games held in Singapore in 2010.
“My responsibility is that the trade sector remains a vibrant sector which provides good jobs for Singaporeans. So, I would have done my job if a young person goes to his parents and says: ‘Dad, Mum, I want to join the trade sector after I graduate because it is a sector that has a bright future’. That will be my Key Performance Indicator,” he concluded passionately. - FS