Singapore is a country known for its wealth, cleanliness, and modernity, but it is still unfamiliar to Brazilians. This island-State the size of the city of Ubatuba (in São Paulo state) has the sixth highest GDP per capita in the world, ahead of countries like the United States, Germany, and Japan.
A newly released report shows that, by 2030, the percentage of Singaporean millionaires relative to the country’s total population will surpass that of the United States, China, and all countries in the Asia-Pacific region. Currently, 7.5% of Singaporeans are millionaires; this number is estimated to increase to 13.4% in 2030. The figures are impressive, even more so because it is a country that became independent in 1965. On August 9 of this year, Singapore celebrated its 57th birthday. In the week before National Day, the number of flags hoisted on doors and windows throughout the city drew attention. This is a young nation that managed, in just a few decades, to become one of the wealthiest countries in the world.
International trade is at the heart of this success story. Due to its strategic location, Singapore has always been regarded as a logistics hub. In fact, this is one of the main characteristics that lead companies and organizations to invest and settle in the country. Singapore’s Port should be on the list of must-visit places in the city: it is the second largest in the world.
Singapore is the fourth main destination for foreign investment in the world and one of the most open regarding trade policy, accounting for 27 trade agreements involving 64 countries. This number will increase with the recent closing of negotiations—which began in 2018—for the free trade agreement between the MERCOSUR bloc and Singapore. The Brazilian government estimates that—considering the amounts accumulated between 2022 and 2041—this agreement could represent an increase of R$ 28.1 billion to the Brazilian GDP, an increase of R$ 11.1 billion in investments, and R$ 21.2 billion in Brazilian exports to Singapore.
Trade-wise, the gain is not only in the expanded access of Brazilian products to the Singaporean market—which has practically no barriers related to tariffs—but in the possibility of placing Brazil in the global value chains in Asia.
Singapore has a population of just over 5.6 million people but the favorable business environment and the chance to access other Southeast Asian countries make it an interesting destination for those who want to do business in that region. The ten Southeast Asian countries have a population of around 675 million people. In this group are, for example, Thailand, Vietnam, and Indonesia. In 2021, these three countries bought almost US$ 7 billion in agricultural products from Brazil. As a comparison, the United States, which is the second main destination for Brazilian agribusiness exports, purchased US$ 9 billion.
Southeast Asia is a US$ 128 billion market related to agricultural products purchase. In 2021, the countries in the region imported nearly US$ 16 billion worth of cereals and US$ 8.2 billion worth of fruits and nuts. Moreover, the bloc has shown high economic growth rates, especially in the last decade, when countries like Vietnam, Cambodia, and Laos recorded average growth of close to 8% per year.
The population issue is also a positive factor. Over the past few years, Southeast Asian countries have grown by an average of 1.1% per year and, today, they account for around 9% of the world’s population. Most of the countries in the region are unknown to Brazilian businesspersons.
Considering Singapore as a gateway or even a final destination for exports can be very interesting. For this reason, the Brazilian Confederation of Agriculture and Livestock (CNA) opened a representative office in Singapore at the end of 2021. Like the other CNA’s international offices, its focus is to support Brazilian producers who want to export products to the region.
For the reasons already mentioned, Southeast Asia’s pull is undeniable, but Singapore should not be overlooked as a target market. The country imports practically all the food it consumes, in addition to having a population with high purchasing power. Besides, it is regarded as a showcase for other countries in the region. Placing a product in the Singaporean market represents a seal of quality and facilitates entry into neighboring countries. Moreover, the authorities and organizations responsible for the international trade agenda offer a support network and look forward to the entry of other players into that market.
Unfamiliarity is not just on the Brazilian side. Singaporeans know little or nothing about Brazil. The only product of Brazilian agribusiness easily found in supermarkets in the country is chicken, of which Brazil is by far the main supplier.
The title of this article is an example of an initiative to strengthen relations between Brazil and Singapore. “It’s time for Brazil in Singapore” is the title of a magazine published by the Brazilian Embassy in Singapore, with content about both countries.
*Sueme Mori is Director of International Relations at the Brazilian Confederation of Agriculture and Livestock (CNA)