S'pore losing export edge to neighbors

S'pore losing export edge to neighbors

SINGAPORE (AFP): Singapore is losing ground in export competitiveness against emerging "tigers" Malaysia and Thailand but gaining against East Asian and industrial countries, according to results of a study published yesterday.

The Business Times said that based on a "relative export competitiveness index" developed at the local Nanyang Technological University, Singapore was losing against fellow members of the Association of Southeast Asian Nations (ASEAN).

The index measures the difference between a country's export prices and those of its competitors in their common markets in U.S. dollar terms.

This was said to be a more accurate measure than mere comparisons of labor unit cost used by the government.

The issue of eroding competitiveness was a key concern at a meeting of Singapore policy-makers and academics on Wednesday, the newspaper said.

But Singapore, whose main industries include electronics, chemicals and services, was found to have sharpened its edge against East Asian countries like Hong Kong and Taiwan, and industrial nations belonging to the Organization for Economic Cooperation and Development (OECD).

Analysts say Singapore has to contend with rising wages and other costs as well as the strong local dollar in competing with neighbors, but offers stability, clear rules, a strike-free environment and superior infrastructure.

On another area in which Singapore has lost ground -- the retail sector -- the daily said an economist warned that the city-state must find ways to lure back local shoppers who have found it cheaper to engage in their favorite pastime overseas than at home.

Because of the strong Singapore dollar, high rentals and soaring salaries of sales personnel, Singaporeans now find it cheaper to go to new shopping meccas like Bangkok, Kuala Lumpur and Jakarta than shop at home.

According to one unofficial estimate, Singaporeans spent S$2.6 billion (US$1.86 billion) shopping in neighboring Malaysia alone in 1995. Both are separated only by a causeway, and the nearby Malaysian city of Johor Bahru has become a virtual shopping mall for Singaporeans.

Balance of payments data showed that total spending of Singaporeans traveling abroad had risen by an average of 20 percent a year since 1992, the newspaper added.

Friedrich Wu, vice president and head of economic research at DBS Bank Ltd., said that if the amount spent on shopping had similarly surged, it would mean very bad news for local retailers."