Commentary: Why Singapore Was Among The World’s Largest Recipients Of Investments In 2019

SINGAPORE: With the tit-for-tat tariffs in the China-US trade war crossing the one year mark, it is amazing that foreign direct investment into the region of Southeast Asia grew strongly in 2019, given investors’ anxiety about the future of the world economy, and when global investment volumes remained flat.

Recent reports from the United Nations Conference on Trade and Development (UNCTAD) estimates that of the US$1.39 trillion global foreign direct investment (FDI) in 2019, the Southeast Asian member-states in the Association received a combined US$177 billion, exceeding the earlier record of US$155 billion set back in 2018.

Asean Did Well In Comparison

Although the Southeast Asia FDI total for 2019 was much lower than the US$305 billion received by the EU, or the US$251 billion received by the U.S.A, the incoming FDI is getting more, while the EU’s declined by 15% and the USA amount remained about the same.

To see it in a bigger perspective, the entire amount for Japan was just US$11 billion. In spite of its departure from the EU soon, the United Kingdom received a US$61 billion amount of FDI, which, though lesser that the figure in 2018, it was notably more than either neoghbours Germany or France, and just a bit more than the combined amount for South Asia.

In comparison with other developing economies, the Caribbean and Latin American brought in lesser FDI than Southeast Asia. However these 2 zones got an amount far more than Africa, which got an estimated US$49 billion.

Mainland China receives US$140 billion for 2019, which was slightly more than its 2018 total. However, the entire East Asia saw a significant drop of 21% in 2019, a significant amount due to the halving of Hong Kong’s inward FDI to an estimated US$55 billion.

Singapore Benefits From Hong Kong’s Woes

A recession befell Hong Kong in Q2 last year, and the fear that China may clamp down hard on the pro-democracy protests in Hong Kong have motivated investors to look to Singapore as the alternate investment location. Because of this, Singapore received the biggest share of the Southeast Asian total in 2019: US$110 billion, a 42% jump from 2018. This can only benefit eager individuals planning to built their Property Agent Career this year.

This bodes well for the economic prospects of Southeast Asia in 2020, in particular to Singapore, as analysts saw how the country has gained much from the diversion of economic activities, and tourists, away from Hong Kong.

This information is without a doubt important to Singapore which is FDI-dependent. The city-state faces challenges with a slowing economy overall, with GDP growth in 2019 predicted to be a sluggish 0.7%, with its electronics exports lowered.

According to data from World Bank, the 2018 FDI inflows amounted to over 23% of Hong Kong’s GDP and over 22% of Singapore’s GDP. Both percentages were far higher than other parts of Southeast Asia, where the next highest was Cambodia, which amounted to 12.6%.

According to UNCTAD, Singapore FDI total for 2019 was the fourth highest of any country, and it was mainly made up of “deals in the communication and information industry”.

Singapore has a good reputation as a regional headquarters and finance capital hub, and the country regularly competes with Hong Kong for the top spot on World Bank’s “Doing Business” rankings. This is why One North Eden Developer decided to develop this residence in the middle of a business park.

Trickling Down Effect On The Region

In the ASEAN Investment Report 2019, it was mentioned that “more than 80% of  finance FDI in ASEAN last year was allocated to Singapore. A major portion of that investment may be utilised to fund FDI activities within the region, since Singapore has a high importance as a regional headquarter for many firms.” Some of that activities do include property purchases aimed at condominiums like One North Eden.

Foreign direct investment entering the Singapore real estate market has increased in 2019 and is projected to remain high in 2020 as Hong Kong’s situation remains unstable. One-North Eden is one of the developments foreign buyers will be keen on for 2020, due to its close proximity to 2 international education institutions, and large MNCs like Qualcomm and Siemens – a strong pool of tenants studying and working in the area.


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