Market snapshots: Singapore, Malaysia, Thailand, Indonesia

Singapore: Ports powerhouse

At the hub of a vast commerce network, this former British colony is independently international

Singapore was founded as a British colony in 1819 and has been independent for just 52 years. As its bicentennial approaches, the country is firmly established as a prosperous player in the global economy. Its port had handled 16 million TEUs year to date as of June 2017, a 6.5% increase over the 2015 half-year period. The world’s largest transshipment hub, it is connected to 600 ports. That is impressive trade performance for a country whose population was just 5,781,718 as of July 2016 and whose labor force is just 3.661 million.

But with a population that includes people who are ethnically Chinese (74.3%), Malay (13.4%), and Indian or Sri Lankan (9.1%), Singapore comes by its global outlook naturally. Its four official languages—Mandarin, English, Malay, and Tamil, spoken respectively by 36.3%, 29.8%, 11.9%, and 3.2% of the population—are complemented by other Chinese and Indian languages and dialects spoken by as much as 8% of the country. In that environment, trading across borders can feel much like trading across town, and that has given this small country a big competitive advantage.

Services account for 83.5% of the workforce, followed by industry (15.5%) and agriculture (0.96%). The unemployment rate for 2016 was 2.1%, up from 1.9% in 2015.

Singapore’s purchasing power parity gross domestic product (GDP) rose to $487.9 billion in 2016—that is $87,100 per capita—from $478.3 billion in 2015. For the year, its gross national saving was 46% of GDP. Services and industry generate 73.4% and 26.6%, respectively, of GDP; agriculture makes no statistically significant contribution. Leading industries include electronics, chemicals, financial services, oil drilling equipment, petroleum refining, rubber processing and rubber products, processed food and beverages, ship repair, offshore platform construction, life sciences, and entrepot trade.

Singapore enjoys a healthy trade surplus. In 2016, export and import volume were $353.3 billion and $271.3 billion, respectively. Exports were down from $377.1 billion the previous year, but imports also fell from $294.5 billion. The country’s leading commodity exports machinery and equipment (including electronics and telecommunications), pharmaceuticals and other chemicals, refined petroleum products, foodstuffs and beverages. Commodity imports are led by machinery and equipment, mineral fuels, chemicals, foodstuffs, consumer goods. China is Singapore’s top trading partner but accounts for only 13.7% of exports and 14.2% of imports. Its diversified foreign commerce base also includes Hong Kong, Malaysia, Indonesia, the U.S., Japan, and South Korea for exports and the U.S., Malaysia, Japan, South Korea, and Indonesia for imports.

For further details and export support, see the Export.gov Singapore resources, the Singapore page of the Office of the United States Trade Representative, the Singapore Business Federation and Singapore Manufacturing Federation web resources, and the American Chamber of Commerce in Singapore and U.S. Chamber of Commerce Singapore websites.

Source: CIA World Fact Book

---

Malaysia: Economic escalator

By capitalizing on pro-business policies, this country has become formidable in foreign trade

The territory that is contemporary Malaysia was organized during the 18^th and 19^th centuries into colonies and protectorates that were governed by Great Britain until 1942. From then until 1945, they were occupied by Japan, and in 1948, they became part of the Federation of Malaya, which gained independence in 1957. Malaysia was established as an independent nation in 1963.

Following a period of political instability during its early independence, the country has since 1981 pursued pro-business policies and shifted its economy from overreliance on raw materials exports to development of the manufacturing, services, and tourism sectors. This focus has elevated it to the status of an upper-middle-income economy.

Today, Malaysia is a country of 30,949,962 people, of whom 50.1% are Malay, 22.6% are Chinese, 11.8% are indigenous, and 6.7% are Indian. In addition, noncitizens comprise 8.2% of the population. There is similar diversity in the languages spoken here: although Bahasa Malaysia is used officially, other widely spoken languages include English, various Chinese languages and dialects, Tamil, Telugu, Malayalam, Panjabi, Thai, and several indigenous languages in East Malaysia.

The workforce numbers 14.77 million people, with 53% engaged in services, 36% in industry, and 11% in agriculture. The unemployment rate for 2016 was 3.3%, nearly flat with 3.2% in 2015.

In 2016, Malaysia’s purchasing power parity GDP was $863 billion—$27,200 per capita—up from $828.2 billion in 2015. Its gross national saving was 27.4% of GDP in 2016, a drop from 28.1% in 2015 and 29.4% in 2014.

Services account for 54% of GDP, followed by industry (37.8%) and agriculture (8.2%). Leading industries include rubber and oil palm processing and manufacturing, petroleum and natural gas, light manufacturing, pharmaceuticals, medical technology, electronics and semiconductors, timber processing logging, and agriculture processing.

Exports in Malaysia totaled $167.3 billion in 2016, down from $175.7 billion in 2015. For the same period, imports fell to $139.5 billion from $147.7 billion, leaving the country’s trade surplus roughly equal in both years.

Top exports include semiconductors and electronic equipment, palm oil, petroleum and liquefied natural gas, wood and wood products, palm oil, rubber, textiles, chemicals, and solar panels. Import commodities are led by electronics, machinery, petroleum products, plastics, vehicles, iron and steel products, and chemicals. Singapore and China are Malaysia’s biggest trading partners for imports and exports, followed by Japan, the U.S., Thailand, Hong Kong, and India for exports and, on the import side, the U.S., Japan, Thailand, South Korea, and Indonesia.

For further details and export support, see the Export.gov Malaysia Country Commercial Guide, Doing Business in Malaysia report, and overview of Malaysia Trade Barriers, Regulations, and Standards. The Malaysian International Chamber of Commerce and Industry, Malaysia US Chamber of Commerce, and American Malaysian Chamber of Commerce offer additional resources that may be useful as you explore opportunities for trade or partnerships in Malaysia.

Source: CIA World Fact Book

---

Thailand: Export empire

A rising trade surplus provides the motor for this country’s continued economic growth and position in the global economy

The Thai kingdom dates to the mid-14^th century, and this is the only Southeast Asian country never to have experienced European colonization. A constitutional monarchy was established in 1932, and that structure remains in place. However, the country has experienced a period of political instability, with military coups staged in 2006 and 2014.

The interim military government drafted a new constitution that passed a national referendum in August 2016 and was signed into law by the king in April 2017. Elections are expected to be held in 2018. Meanwhile, in terms of the business climate, Thailand’s free-enterprise and pro-investment policies remain priorities because international trade drives the country’s economy: exports generate approximately two-thirds of GDP.

Thailand has a population of 68,200,824. Ethnically, 97.5% of the people are Thai, although the Thai language is spoken by a smaller number, 90.7%. The CIA World Factbook notes that “English is a secondary language of the elite.”

There are 38.45 million people in the workforce, and the unemployment rate stood at 0.9% in both 2016 and 2015.There is a significant discrepancy, however, between levels of labor activity by sector and contributions to GDP by sector. While 51.5% of people work in services, which generate 55.3% of GDP, 16.7% work in industry, which generates 35.9% of GDP. The shortfall occurs in the agriculture sector, which employs 31.8% of people but generates just 8.9% of GDP.

The country is the world’s second-largest producer of tungsten and third-largest producer of tin. Its leading industries include tourism, textiles and garments, agricultural processing, beverages, tobacco, cement, light manufacturing such as jewelry and electric appliances, computers and parts, integrated circuits, furniture, plastics, automobiles and automotive parts, agricultural machinery, air conditioning and refrigeration, ceramics, aluminum, chemicals, environmental management, glass, granite and marble, leather, machinery and metal work, petrochemicals, petroleum refining, pharmaceuticals, printing, pulp and paper, rubber, sugar, rice, fishing, and cassava.

Thailand’s 2016 purchasing power parity GDP was $1.161 trillion, or $16,800 per capita. That is an increase from 1.125 trillion in 2015. Its gross national saving was 34.1% of GDP in 2016, up from 32% in 2015.

Exports in Thailand totaled $215.3 billion in 2016, up from $214.4 billion in 2015. For the same period, imports fell to $194.7 billion from $202.7 billion, creating a net increase in the country’s trade surplus. Thailand is the world’s 22^nd largest exporter.

Leading exports include automobiles and parts, computers and parts, jewelry and precious stones, polymers of ethylene in primary forms, refined fuels, electronic integrated circuits, chemical products, rice, fish products, rubber products, sugar, cassava, poultry, machinery and parts, and iron and steel and their products. Imports are led by machinery and parts, crude oil, electrical machinery and parts, chemicals, iron and steel products, electronic integrated circuits, automobile parts, jewelry (including silver bars and gold), computers and parts, electrical household appliances, soybeans, soybean meal, wheat, cotton, and dairy products.

The U.S. and China are virtually tied as Thailand’s biggest markets for exported commodities, followed by Japan, Hong Kong, Malaysia, Australia, Vietnam, and Singapore. Its top trading partner for imported commodities is China, followed by Japan, the U.S., Malaysia, and United Arab Emirates.

For further information and resources, see the Export.gov Thailand resources as well as the websites of the U.S. Chamber of Commerce Thailand and the American Chamber of Commerce in Thailand.

Source: CIA World Fact Book

---

Indonesia: Advancing archipelago

Southeast Asia’s biggest economy pursues growth in a sometimes challenging regulatory environment

It is hard to grasp how large Indonesia is. Seen on a map, the scattered islands do not at first glance look that impressively sized. The first hint that there is more here than meets the eye is that the archipelago sprawls from the Indian Ocean to the Pacific. When you account for the stretches of water and the land masses combined, Indonesia occupies 735,358 square miles—an area nearly three times that of Texas.

Living within that area are 258,316,051 people; the highest concentration is on the island of Java, one of the world’s most densely populated places. The population includes more than 15 ethnic groups, and more than 700 languages are in use in the country.

Although it is Southeast Asia’s largest economy, “Indonesia still struggles with poverty and unemployment, inadequate infrastructure, corruption, a complex regulatory environment, and unequal resource distribution among its region,” the CIA World Factbook notes. In addition, foreign direct investment opportunities are constrained by a high level of protectionism. Government priorities include pursuing maritime resource and infrastructure development and increasing the country’s electrical power generation capacity.

The workforce numbers 125 million people, and unemployment dropped to 5.6% in 2016 from 6.2% in 2015. There is an imbalance in Indonesia between the percentage of the workforce engaged in each sector and that sector’s contribution to the economy. Services employ 47% of people and generate 46% of GDP. But industry employs 21% of people and generates 40.3% of GDP, while agriculture employs 32% of people and generates 13.7% of GDP. Leading industries include petroleum and natural gas, textiles, automotive, electrical appliances, apparel, footwear, mining, cement, medical instruments and appliances, handicrafts, chemical fertilizers, plywood, rubber, processed food, jewelry, and tourism.

In 2016, Indonesia’s purchasing power parity GDP was $3.033 trillion—$11,700 per capita—up from $2.888 trillion in 2015. Its gross national saving was 32.4% of GDP in 2016, nearly flat with 32.5% in 2015.

Indonesian exports totaled $144.4 billion in 2016, down from $148.4 billion in 2015. For the same period, imports fell to $129.1 billion from $135.1 billion, with the net effect that the leaving the country’s trade surplus is unchanged.

Top commodity exports include mineral fuels, animal or vegetable fats (including palm oil), electrical machinery, rubber, machinery, and mechanical appliance parts. Import commodities are led by mineral fuels, boilers, machinery, and mechanical parts, electric machinery, iron and steel, and foodstuffs. Japan, the U.S., and China are nearly tied as the three biggest export partners, followed by Singapore, India, South Korea, and Malaysia. China is the largest import partner; it accounts for 20.8% of volume, while Singapore, Japan, Malaysia, South Korea, Thailand, and the U.S. account for 44.8% cumulatively.

For further details and export support, see the Export.gov Indonesia resources along with the websites of the American Indonesian Chamber of Commerce, U.S. Chamber of Commerce Indonesia, and the American Chamber of Commerce in Indonesia.

Source: CIA World Fact Book

Return to main article: “Markets of magnitude“