S’pore is tops in industrial competitiveness

Ireland and Japan came in second and third, according to a UN survey

SINGAPORE came out top in terms of industrial competitiveness, a United Nations (UN) survey has found.

The 2009 Industrial Development Report, which ranked 122 markets, said that the city-state took pole position in 2005 and 2000, based on an index that assesses national industrial performance across a five-year period.

Ireland and Japan came in second and third, while Switzerland, Sweden and Germany followed behind.

Developed by the UN Industrial Development Organisation (UNIDO), the competitive industrial performance (CIP) index considers factors such as industrial capacity, manufactured export capacity, industrialisation intensity and export quality.

In the report, UNIDO pointed out that the United States was the only mature industrial power that saw a deterioration in its relative position. This resulted from the improved performance of South Korea and Taiwan.

Among the top 60 countries, the largest improvements were seen in Qatar (up 23 places), Cyprus (18), Iceland (13) and Slovenia (10).

Among the bottom 60, several African countries, including Mozambique, Senegal and Cote d’Ivoire, improved their rankings considerably – by 21, 18 and 13 places, respectively.

Manufactured exports in those three countries grew much faster than manufacturing value added (MVA), while the share of primary exports in total exports declined sharply.

East Asia leads the developing world in the CIP index, where the four mature ‘tigers’ continue to dominate the rankings.

However, Hong Kong has dropped in industrial competitiveness, while China continues its impressive performance and is in 26th position in the 2005 ranking.

Sub-Saharan Africa lagged behind all other regions. Most of the region’s countries cluster at the bottom of the CIP index.

Latin America continued to lose ground to East Asia. The best three performers in the region – Mexico, Costa Rica and Brazil – lost several positions in the rankings.

South Asia does not perform well on the CIP measure. India leads the CIP in the region but lost three positions in the global rankings, despite its strong information technology and electronics sectors.

In the Middle East and North Africa, Tunisia and Morocco continued to improve in industrial competitiveness.

They have emerged as small dynamic economies and are able to compete in global markets not only in basic manufacturing, but also in sophisticated products.

Source : Business Times – Feb 2009

Singapore tops in innovation and competitiveness

Singapore is the world leader in terms of innovation and competitiveness while South Korea ranks fifth and Japan ninth, according to a report released on Wednesday.

Other countries in the top 10 of the study by the Information Technology and Innovation Foundation (ITIF) were Sweden (2), Luxembourg (3), Denmark (4), the United States (6), Finland (7), Britain (8) and the North American Free Trade Agreement (NAFTA) region of Canada, Mexico and the United States (10).

Other Asia-Pacific region countries in the top 40 included Australia (19), China (33) and India (40). The 15 Western European countries in the European Union, the EU-15, ranked 18th.

The study by the ITIF, a non-partisan think-tank based in Washington, used 16 indicators in six key areas to come up with the rankings: human capital, innovation capacity, entrepreneurship, information technology infrastructure, economic policy factors and economic performance.

Measured differently, in terms of progress on the 16 indicators over the last decade, China topped the rankings, and the United States finished 40th, the ITIF said.

Singapore was second followed by Lithuania, Estonia, Denmark, Luxembourg, Slovenia, Russia, Cyprus and Japan. India ranked 14th, South Korea 17th and Australia 32nd. The EU-15 region ranked 28th in terms of change since 1999.

“This study is based on the importance of benchmarking global competitiveness and innovation on a variety of factors, not simply policy factors or economic performance,” said ITIF president Rob Atkinson.

“In today’s global economy, it’s important to look at the competitiveness of the United States, Europe, Asia and the rest of the world based on a variety of factors – not just one.”

“We found that the United States performs well when compared to the rest of the world, leading Europe, but is not the runaway leader that some recent studies have found it to be,” Atkinson said.

The ITIF said that “if the EU-15 region as a whole continues to improve at this faster rate than the United States, it would surpass the United States in innovation-based competitiveness by 2020.”

“All of the 39 other countries and regions studied have made faster progress towards the new knowledge-based innovation economy in recent years than the United States,” it said.

The ITIF outlined “key policies that need to be pursued to turn around the decline in US innovation-based competitiveness.”

They included incentives for companies to innovate at home, being open to high-skill immigration, fostering a digital economy, supporting the kinds of institutions that are critical to innovation and ensuring that regulations and other related government policies support, not retard, innovation.

Source : Channel NewsAsia – Feb 2009

MM Lee Kuan Yew sees 3-5% Asia growth as world recovers

 

China and India’s growth momentum may spill over to the rest of Asia in the next three to five years

DRIVEN by China and India, Asia will still see annual growth of 3-5 per cent as the world economy recovers in the next three to five years, says Minister Mentor Lee Kuan Yew.

‘It (the 3 per cent to 5 per cent growth) isn’t bad in this condition,’ he said yesterday at the Singapore Human Capital Summit conference.

Employers should use the down-time to build up the skills and knowledge of their workers for the upturn in the economy, he said. ‘You’ve got to be optimistic and realistic enough that this will recover – when? I don’t know.’

The government will push on with the continuing education and training of workers, Mr Lee said.

In the absence of ‘malfunctioning’ in the banking system, he sees the global economy restored – in an upbeat scenario – in 3-5 years to the growth path it was on before it was derailed by the financial crisis.

Asia excluding China and India will, meanwhile, do better than other regions, as it continues to post economic growth of 3-5 per cent a year.

The International Monetary Fund’s growth forecast is 5-6 per cent, but that includes China and India.

According to Mr Lee, while growth in China and India may ease, the two economies are large enough to have growth momentum of their own, with spillovers for the rest of Asia.

While China and India offer Singapore growth opportunities, Mr Lee said they also pose a big challenge to it.

‘We have to decide where is our future, assuming China and India will (continue to) grow,’ he said. ‘We have to accept that what we do they will do as well, if not better.’

So what is it that Singapore can do that China or India cannot do, at least in the next 20-30 years?

Singapore’s comparative advantage over China and India is its system, Mr Lee said. ‘They can have the individuals to catch up with us but they can’t catch up with our system so easily.’

In particular, he cited Singapore’s system of laws and fair play, its meritocracy and patent laws.

He also said that in a globalised world of greater mobility and competition, the ability to attract and retain talent is the key to economic success.

Singapore has won and lost talent, but its important that it ‘wins more than it loses’, he said. ‘Without foreign talent, Singapore would not be where it is today.’

The US has also done well because of foreign talent, Mr Lee noted. But the issue of foreign talent is politically dicey and political leaders must convince their electorate ‘why you need foreign talent to give that extra boost’.

Business Times – 25 Oct 2008

Singapore gets top marks in UN World’s Cities Report

 

The United Nations (UN) gave Singapore top marks in its latest report on the state of the world’s cities, and has said it is keen to deepen its collaboration with Singapore as a knowledge hub.

The UN also called on cities to take on pro-growth policies that support the poor and strengthen infrastructure. It said all these can make a difference when it comes to sustainable living.

The UN said people’s consumption and lifestyle patterns, and not urbanization, are to blame for climate change. To solve the problem, cities need to use less fossil fuel, maximise recycling and have a well-planned transport network.

Singapore, which set up an inter-ministerial committee on sustainable development in February, has been highlighted for its low per capita car ownership.

With its greening policy, Singapore has also been singled out as a country that absorbs more carbon dioxide than it emits. Another achievement is that Singapore is the only country with no slums.

Director of Monitoring and Research at UN-HABITAT, Banji Oyelaran-Oyeyinka, said: “Obviously, (the) government has taken pro-active steps over a long period of time because it has to be sustained.

“One of the problems you find in most countries is they actually start well, but you need constant investment, sustained effort (and) visionary leadership to sustain those kinds of actions.”

The latest UN report by UN-HABITAT, the agency working to boost the liveability of cities, studied 245 cities. The report is a lead-up to the UN World Urban Forum in Nanjing, China in November.

It noted another worrying concern of rising sea levels, and Southeast Asia in particular is at the highest risk due to its low elevation.

Singapore has said in parliament in September that it has taken measures in terms of building requirements on reclaimed land and drainage infrastructure. A two-year study to understand the specific implications of climate change, including rising sea levels, is also expected to be ready in 2009.

Director of Centre for Liveable Cities, Andrew Tan, said: “Moving forward, I would say that having achieved the level of environmental quality we have in Singapore, there is still a need for us to maintain these efforts.

“It’s necessary for Singaporeans to be proud of what they have achieved, but at the same time, to know that sustained efforts is required.”

The UN has lauded the 43-year-old city state as a model city. However, experts cautioned that as all cities progress, they will no longer be measured just by their level of economic, social and environmental progress.

Cities like Singapore will also have to look at its inclusiveness and its quality of life. Related to this, the report said cultural assets too should be protected to nurture the soul of the city.

Channel NewsAsia – 24 Oct 2008

Singapore in ‘better shape’ to face crisis

 

Measures put in place after 1997 Asian financial crisis will help S’pore fare better now: Iswaran

SINGAPORE is in a better shape to weather the current downturn, thanks to lessons learnt during the Asian financial crisis.

This is the view of Senior Minister of State for Trade and Industry, Mr S. Iswaran, who spoke to reporters on the sidelines of the Global Indian Diaspora Conference at Suntec City yesterday.

Last Friday, figures from the Ministry of Trade and Industry (MTI) indicated that the economy shrank in the third quarter, declining by 0.5 per cent from a year ago.

The local economy has contracted quarter-on-quarter in three of the last four quarters, making this the first technical recession in Singapore since 2002.

MTI also lowered its forecast for full-year growth to ‘around 3 per cent’, down from 4 to 5 per cent.

But Mr Iswaran reckons that Singapore is prepared to deal with the downturn.

‘If you look at our economic numbers, there are particular sectors that have been affected by the general economic malaise in developed economies, particularly in manufacturing,’ he said.

‘But at the same time, other sectors are holding up. The services sector is doing reasonably well; there are also business services, transport…and so on.’

He cited measures that were put in place to tighten Asia’s financial systems after the Asian financial crisis in 1997, as a critical catalyst that has helped reinforce Asia.

‘And it’s not just the financial systems but also our corporate sector in terms of the level of debt it took on and how it structured its balance sheets. So from that point of view, (we are) more robust,’ he added.

But he also cautioned that Singapore will not be immune and moderation of growth is expected.

‘When there is a downturn in developed markets like the US, Europe and Japan…we cannot be immune,’ he added.

‘The real economic effect will affect us in Singapore, but yes, I think we are in a better position to withstand it, compared to the period of 1997.’

He said MTI will continue to work with other agencies to monitor the situation.

‘We want to keep our hand on the pulse, and make sure that appropriate steps are in place, or taken in good time to facilitate and help the industries where it is needed.’

Sunday Times – 12 Oct 2008

Grade A office rents in CBD slide for first time in years

 

Average monthly rent at Raffles Place slips 1.4% to $17.64 psf in Q3

Grade A office rents in Singapore’s Central Business District (CBD) have declined for the first time since the office market troughed in 2004.

The average gross monthly Grade A rental value for the Raffles Place area slipped 1.4 per cent to $17.64 per square foot (psf) in the third quarter, from $17.89 psf in the preceding quarter, according to the latest data from Knight Frank.

The Suntec/Marina Centre/City Hall area led the declines in Grade A office rentals in Q3, with a 6.2 per cent quarter-on-quarter fall to $15.13 psf. In the Shenton Way/ Robinson Rd/Tanjong Pagar area, the drop was 2.8 per cent, followed by a 2.7 per cent decline along Orchard Road.

Knight Frank director (research and consultancy) Nicholas Mak said that he expects office rentals to continue declining by 14-19 per cent islandwide in the next 12 months (from current levels) as the global financial turmoil and possible mergers and acquisitions contribute to consolidation and reduction in office demand.

Giving her take on weakening office demand, DTZ executive director Ong Choon Fah said: ‘Most companies are in cost containment mode and would be looking for ways to manage the increase in their accommodation costs. There has also been quite a lot of leakage of CBD office demand to business parks and vacant state properties converted to offices.’

Mrs Ong reckoned that headline office rents may not come down much but noted that leasing incentives like rent-free periods have started to reappear. Agreeing, an analyst said: ‘Major landlords will try to maintain headline rents, because once rents come down, it affects their whole portfolio.’

Besides weaker demand for office space amid the financial turmoil, Knight Frank’s Mr Mak attributed the softening rentals in Q3 to the government’s efforts to increase office supply (including transitional office sites). ‘In addition, landlords are more cognisant of the substantial supply of office space that will be completed from 2010 and have become more realistic and flexible in their rental expectation when it comes to lease negotiations; they want to hold on to their tenants and maintain their buildings’ occupancy rates,’ Mr Mak said.

The fall in the average Grade A Raffles Place rental value in Q3 marks the first quarterly decline since Q2 2004. This incipient weakening follows a rapid escalation in office rentals over the past two years on the back of tightening supply and strong demand from occupiers, including global financial institutions expanding their operations in Singapore. Average Grade A Raffles Place rents surged 82 per cent last year and that was on top of the 67 per cent gain posted in 2006, according to Knight Frank.

But it’s a different story now. ‘Since Q1 2008, there appears to be a crack in the growth momentum for office demand in the Downtown Core area due to external factors such as the US sub-prime crisis that began in the second half of last year,’ said Mr Mak.

The slowdown in demand in the Downtown Core area – which includes the key office districts like Raffles Place/Marina Bay, Shenton Way and Marina Centre – and tapering off in rentals in Q3 does not come as a surprise, he adds. ‘The tenants in this area are primarily financial institutions, many of which had already completed their expansion or consolidation plans over the last 24 months and some are adopting a more cautious approach by putting any further expansion plans on hold,’ Mr Mak observed.

Knight Frank’s data showed that Grade B offices in Singapore also experienced downward pressure on rentals in Q3. The biggest fall was in the Orchard Road location, where the average rent decreased 7.8 per cent quarter-on-quarter to $10.70 psf a month in Q3. Raffles Place and Shenton Way/ Robinson Rd/Tanjong Pagar Grade B offices were less impacted by easing office rentals and dipped by 1.8 per cent and 2 per cent quarter-on-quarter respectively.

As a whole, offices in non-CBD locations also mirrored the general slowdown in rental in Q3. Rentals continued to weaken for the Beach Road/Middle Road area, with a 3.4 per cent quarter-on-quarter drop. Suburban areas too met a similar fate with quarter-on-quarter rental decreases ranging from 1-8 per cent.

Looking ahead, Knight Frank said that in the short term, the beleaguered financial markets are expected to lead to many firms either postponing their expansion plans or consolidating their space usage. Restructuring at some organisations could lead to sub-letting of excess space to ease cashflow problems.

Business Times – 29 Sep 2008

Singapore: Jewel at the heart of Asia’s cruising grounds

THE fact that Singapore is a tiny red dot in the middle of a vast archipelagic region is both a boon and a bane to the luxury marine leisure lifestyle. It’s diminutive size means that there are severe constraints on everything from cruising grounds to marina space.

But being the richest kid on the block also means that it has the best of everything and is within easy reach of some of the top undiscovered cruising areas in the world.

Of Singapore’s seven marinas, only four can be considered luxury with the facilities and prestige to suit the high-life – the newest and poshest being Marina at Keppel Bay and One Degree 15 Marina Club, while the Republic of Singapore Yacht Club and Raffles Marina both have a strong heritage but look a bit worn.

The former two are the new kids on the block with excellent locations, One Degree 15 Marina Club at the heart of the prestigious Sentosa Cove waterfront district on Sentosa island and Keppel Land’s Marina at Keppel Bay anchoring the prestigious Caribbean and Reflections developments in its Keppel Bay precinct.

Singapore’s oldest yacht club, the tradition-bound Republic of Singapore Yacht Club lists a host of illustrious personalities among its membership. President S R Nathan is its patron and honorary members include the Sultan of Johore.

The club is on the once rustic southwest coast, unfortunately now taken over by the rapid development of Singapore’s port infrastructure.

At the western tip of the island is Singapore’s first marina to have dedicated superyacht berths for yachts up to 200 feet long. But its location in industrial Tuas, just next to the Second Link, detracts much from any glamour it may have sought. While it is not uncommon for superyachts to berth at Raffles, they are usually there just to resupply the vessel on the way to the region’s cruising grounds or to get maintenance work done.

Finally, those lucky, or wealthy, enough to own a property with their own private jetty in Sentosa Cove, which has a canal-and-lock system running right through the development, can bring boats of up to 40 feet in length right up to their housefronts.

For many people, the marine leisure lifestyle is either about boats or marinas and sometimes both. Being seen at the right marina spot at the right time is almost as important as which boat you are on and with whom.

One Degree 15’s clubhouse is designed as an ultra-modern cool place to hang out with a range of restaurants, bars and cafes as well as full facilities like an infinity pool, members’ lounge and gym.

The club’s exclusive resort feel is a natural attraction for the jet-setting glamour set that have come to make Sentosa Cove their home and playground. The club is a magnet for prestigious events. Come this Christmas, the marina will host the Singapore stopover of the Volvo Ocean Race.

Marina at Keppel Bay’s excellent location close to the city and within an area that is rapidly becoming a prime waterfront location on the southern coast is also making it a staple of the hip, beautiful people. The glamour events often held there and the fashionable party-going crowd make it the place to be seen on weekend nights.

But the on-land aspect of marina high-living is literally just half the story.

Many of the boats berthed at the marinas are super exclusive entertainment platforms in their own right, plus they have the benefit of not being location specific.

Events can range from a low-key exclusive dinner cruise round the Southern islands to an uber-glamorous party at the dock for a select guest list.

Options range from some of the smaller 20-plus metre cruisers to real superyachts like the 35-metre Hye Seas II to those bordering on the megayacht range like the 50-metre JeMaSa and 45-metre Moecca. These are all yachts that are available for charter if you have the right cash and credentials.

Of course, there are some things that even money cannot buy. Prime among these would be invitations aboard superyachts owned by Singapore tycoons like Yantai Raffles boss Brian Chang’s Asean Lady, Nippon Paint’s Goh Cheng Liang’s White Rabbit and the Shaw family’s Sea Shaw.

Glamour does not have to be restricted to Singapore’s shores and seas. Being at the heart of Asia’s prime cruising grounds means that you can take off on one of these sea limos to anywhere you want with a couple of your closest friends or best business associates, taking along all the entertainment you could possibly need.

The Thai beach playground of Phuket is just 500-odd nautical miles or about a day and a half’s cruise away, and likewise the exquisite diving grounds of the Anambas islands in the South China Sea.

Pure charter brokers like Simpson Marine, Kingfisher Marine and Summit Marine can help arrange the boating side of things while broader-based lifestyle events companies Dragon Blaze and Lifestyle Adventures Asia will be able to enhance the experience beyond the water as well.

The cost? As they say in the glamour circles, if you have to ask you can’t afford it. But just to give a rough idea so you don’t embarrass yourself, a ballpark figure would be about a quarter million US dollars for a week’s use of the boat, not including fuel and all other expenses.

And by the way, you will need a resume and an interview before even being considered as a potential charterer. Asking how much it costs would not be a good way to start the conversation.

Business Times – 26 Sep 2008

S’pore overtakes HK in financial centre ranking

It’s 3rd globally, behind London and NY, with biggest gain of top 20

Singapore has been ranked third in The Global Financial Centres Index (GFCI), behind London and New York, according to a new report published by the City of London.

Singapore gained 26 points in the index, more than any other top-20 centre, which allowed it to overtake Hong Kong. Hong Kong has been ranked fourth this time round.

The GFCI is updated every six months in March and September. This report is the fourth edition.

London and New York still lead the field and ‘continue to be the only two truly global financial centres’, the report said. Both cities, hit by the credit crunch, shed points in this round of the GFCI. But London’s lead as the main banking centre in Europe is consolidated as Frankfurt and Paris have both declined in the ratings relative to other centres, the report noted.

In Asia, Singapore surged past Hong Kong to move into third place overall, albeit by only one point.

Singapore’s 26-point gain also means that the gap between London and New York, and the third place centre fell to 73 points, from about 90 points in previous rankings. Singapore is just ahead of Hong Kong in the banking, insurance and government & regulatory sub-indices and is also ahead in the business environment sub-index. But Hong Kong continues to thrive, the report said.

The GFCI also noted that financial centres in the Middle East continue to generate a lot of interest. Dubai is identified most frequently by respondents as the centre likely to become significantly more important in the next few years; Singapore is second in this respect.

Dubai is also the centre mentioned most often when respondents are asked where their organisations are most likely to open offices in over the next few years.

The GFCI model rated 59 financial centres in this round. The study uses external instruments – such as the United Nation’s Human Development Index and the World Bank’s Ease of doing Business Index – as well as responses to an online questionnaire from 1,406 financial services professionals.

Business Times – 26 Sep 2008

Economists turn bearish on outlook for Singapore ..

Some of those polled downgrade predictions; pharmaceutical sector remains the wild card

PRIVATE sector economists are turning bearish on Singapore’s economic outlook this year, amid the recent deluge of bad news from Wall Street and weaker- than-expected showings in exports and tourism.

Most of those polled by The Straits Times now believe growth will come in under 4 per cent, with some downgrading their predictions to as low as 2.8 per cent.

The official forecast is still a 4 to 5 per cent expansion, but Trade and Industry Minister Lim Hng Kiang has already said full-year growth may dip below that.

What the final number hinges on is the highly unpredictable pharmaceutical industry, which could still swing things either way in the last quarter, said economists. Always a wild card, this sector – which accounts for about 6 per cent of gross domestic product – has now become pivotal, especially since they cannot put a figure to it.

Mr Leong Wai Ho at Barclays, for instance, is banking on a ’significant pharma-led bounce’ in the fourth quarter to ring in full-year growth at just over 4 per cent, the highest prediction among those polled.

Barring this rebound, Citigroup economist Kit Wei Zheng has cut his growth forecast to 2.8 per cent this year and 2.5 per cent next year, as ‘ripples from the credit crunch hit home’ and trigger a longer and deeper downturn that had been expected earlier this year.

‘Beyond the third quarter, key leading indicators are all flashing red over the next six to 12 months,’ he said, adding that the effects of slowing external demand and the housing market correction will likely be intensified by the ongoing financial crisis.

The latest round of upheaval in the financial markets, triggered by Lehman Brothers’ collapse last week, has sharply increased the risks for a small and open economy like Singapore, added DBS Bank economist Irvin Seah.

‘We are rather exposed to external volatility and will certainly not be spared; in fact, we will probably be one of the worst hit in the region,’ he said.

Exports fell last month by the most in 20 months, plunging 13.8 per cent over the previous year in its fourth straight month of decline.

Tourist arrivals also dropped for the third consecutive month last month, hit by the global economic slowdown.

These figures have made economists increasingly convinced of the possibility of a technical recession in the third quarter, defined as two consecutive quarters of negative growth.

Tomorrow’s manufacturing output numbers for last month could firm up technical recession predictions and may trigger another flurry of growth forecast revisions, depending on whether they continue July’s dramatic 21.9 per cent contraction.

‘If the third quarter is another write- off and you have a technical recession in Europe, Japan, New Zealand, and even some of the Asian economies including Singapore, what we’re looking at is a little bit like a mini-Great Depression,’ said OCBC Bank’s head of treasury research and strategy Selena Ling.

But even if a technical recession does happen, it could just be a ‘numbers game’ rather than a major slowdown, said United Overseas Bank economist Jimmy Koh. In the first place, the second-quarter numbers were dragged down by pharmaceuticals, which ‘aggravated the situation’.

Economists also say there are still some bright spots in the services sector, which is more diversified and has new, independent growth engines such as the F1 race and the integrated resorts, which will create new jobs and new industries.

Other plus points for the economy include still-stable employment rates and a healthy construction sector, added Action Economics economist David Cohen.

Whether next year will be any cheerier is an issue over which economists are divided. Some believe the financial uncertainty will take its full toll on the economy next year, delaying a recovery previously expected in the second half.

CIMB-GK economist Song Seng Wun said his outlook is ‘diminishing by the day’. With a recession looming in the United States, the outlook is cloudy for the rest of the world, he said.

Others, like OCBC’s Ms Ling, are ‘not that bearish’. She predicts 4 to 5 per cent growth for now.

‘Of course a lot depends on how the US crisis pans out in the coming quarters, but assuming we see some light at the end of the tunnel by June next year, we can hope for some sort of recovery in the second half of the year.’

Straits Times – 25 Sep 2008

Singapore one of top cities for SMEs looking for financing

Singapore is one of the top locations in the world for new small and medium enterprises (SMEs) looking for financing. This is according to a new study by MasterCard Worldwide.

The study shows that Tokyo and Singapore are ranked in the top four out of 53 leading global cities in the potential size of its SME financing market.

Tokyo is second while Singapore is ranked fourth.

In the Asia Pacific, Middle East and Africa region, the countries hold first and second spot respectively.

Walt Macnee, president, Global Markets, MasterCard Worldwide, said: “Despite today’s challenging economic environment, there are still sizeable and profitable business opportunities available in the global SME financing sector for financial institutions.”

The study shows that cities where there are dense concentrations of SMEs with limited access to financing from local banking systems show the greatest profit potential.

“The SME sector in Singapore presents an opportunity in developing new revenue streams and helping to advance the economy…Singapore also ranks number two and is one of the top centres based on service enterprises, which are generally smaller and less capital intensive,” said Kevin Mellyn, global solutions leader, Payments Strategy, MasterCard Advisors LLC, who headed the study.

It is estimated that financing SMEs is worth US$5 trillion in global revenue opportunities for financial institutions.

Channel NewsAsia – 24 Sep 2008