EU-Singapore in a deepening digital embrace

SINGAPORE – Singapore hopes to begin negotiations on a digital free trade agreement with the European Union, one of its major trading partners, as soon as this year, building on a non-binding digital partnership agreed between the two sides in February, according to Singapore’s Minister-in-charge of Trade Relations S Iswaran.

Addressing a business outreach event on Monday (May 29), Iswaran said Singapore and the EU are in the process of identifying projects to pursue through the partnership, which aims to strengthen the interoperability of digital markets and policy frameworks between the two sides, with the ultimate goal of enabling consumers and businesses to transact online at a lower cost.

The principles established in the EU-Singapore Digital Partnership (EUSDP) represent “the first step towards a bilateral digital trade agreement between the EU and Singapore [that] will give our citizens and businesses the clarity and legal certainty they need to transact confidently in the digital economy,” said Iswaran, who is also Singapore’s transport minister.

“We look forward to launching negotiations on a digital trade agreement with the EU soon hopefully, during Sweden’s Presidency of the EU Council,” Iswaran added, potentially placing digital trade talks in the first half of 2023 when Stockholm serves as rotating council chair, building on an existing Singapore-EU bilateral free trade agreement that entered into force in November 2019.

Known as the EU-Singapore Free Trade Agreement (EUSFTA), the deal was the first of its kind between the EU and a member state of the Association of Southeast Asian Nations (ASEAN) and is regarded as a template for a wider future trade pact with regional economies. Trade experts, however, note that an EU-ASEAN agreement is highly ambitious and remains a long way off.

A future EU-Singapore digital trade agreement would similarly be seen as a stepping stone for closer region-to-region connectivity. The EU’s digital partnership with Singapore is the third such agreement signed with a key trading partner in Asia after partnerships with Japan and South Korea were concluded last May and November, respectively.

Singapore Prime Minister Lee Hsien Loong; President of the European Council Donald Tusk; Jean-Claude Juncker, president of the European Commission; Mr Sebastian Kurz, Austrian Federal Chancellor, sign the EU-Singapore FTA agreement in Brussels, Belgium. 19 October 2018. Photo: EU

The EUSDP aims to facilitate research and regulatory cooperation in areas ranging from 5G and 6G service adoption, artificial intelligence (AI) governance and semiconductor supply chain resilience. It also seeks common rules on cross-border data flows, electronic invoicing and payments to provide small and medium-sized enterprises (SMEs) with more open access to overseas markets.

“The Singapore-EU partnership is not a binding agreement yet. It should be viewed as the first steps of potentially creating one,” Deborah Elms, founder and executive director of the Asian Trade Centre, a Singapore-based trade research and advisory firm, told Asia Times. “While Singapore clearly has no particular issues signing binding commitments on digital and has done so repeatedly already, the same is not true for the EU.”

Elms, who is also president of the Asia Business Trade Association, added that the EU has the challenge of managing “27 member states with varying levels of readiness and enthusiasm for digital trade. This always makes it hard for the EU to act, particularly on new issues like digital. Getting the EU to a comfortable place for signing up to commitments can be time-consuming.”

Data privacy differences may prove difficult to bridge said Elms, pointing out that Singapore has not made a binding commitment to align with Europe’s General Data Protection Regulation (GDPR), considered the toughest privacy and security law in the world, while instead implementing a different standard known as Cross-Border Privacy Rules (CPBR).

“The two systems are not incompatible but they aren’t exactly aligned either. Figuring out how to bridge the gaps could take time. If you stick to a framework, it may not be a problem to have two systems, but if you want to create legally binding commitments, fudging the differences can be harder. Time is also not standing still while the EU and Singapore sort out the partnership,” Elms said.

The EUSDP, which essentially serves as a set of digital trade principles, builds on Singapore’s extensive network of free trade agreements and digital cooperation initiatives, reinforcing its role as a global business hub. Key priorities for implementation in 2023 include common approaches in electronic identification and AI governance and facilitating the digital transformation of SMEs.

Singapore is a major destination for European investments in Asia, with bilateral foreign direct investment stock between the EU and Singapore expanding to an estimated 434 billion euros (US$464 billion) in 2022. Singapore is also the EU’s second-largest commercial partner in ASEAN, with more than 10,000 European companies headquartered in the city-state to serve the wider region.

“Integration with the rest of Southeast Asia is key for our companies who are looking to grow and expand. We need to have everyone working seamlessly together – not just the EU and Singapore, but the rest of the region,” said Jenny Egermark, chargé d’affaires at the Embassy of Sweden in Singapore. “That is the dream and long-term goal that we are working towards.”

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Speeding driver lost control of Mercedes before crashing into Gojek driver's car, killing him

The impact of the collision cracked and crumpled the front bumper of Ng’s car, punctured all four tyres and twisted two wheel rims.

The crash crumpled the bonnet and top portion of the Gojek driver’s car, ripped off its front bumper and smashed both windscreens.

The other vehicles were also damaged in the accident, with the bills running into the thousands – the family’s car cost almost S$19,000 (US$14,036) to repair, while the Gojek driver’s car was scrapped as it was too damaged to be fixed.

The Gojek driver, Mr Kenn Wong Mun Soon, was on the job when his car was hit. He suffered a fatal traumatic rupture of the descending thoracic aorta, the main artery in the body, and died in hospital after resuscitation efforts failed.

The other five victims, including two passengers in the Gojek car, suffered injuries ranging from lacerations, embedded glass, retrograde amnesia, fractures and a traumatic brain injury.

The two children were not injured.

The motorcyclist who was crushed between two vehicles is likely to experience stiffness in his knee and ankle, and decreased endurance in strenuous lower limb activities. 

His motorcycle, which was valued at S$6,500, was also scrapped as it could not be repaired.

Ng failed a breathalyser test administered at the scene and was arrested and taken back to Traffic Police Headquarters, where he failed another breath test. He had 42 microgrammes of alcohol in 100ml of breath, above the limit of 35 microgrammes.

Ng will return to court for mitigation and sentencing in July. He is represented by lawyers Shashi Nathan and Jeremy Mark Pereira from Withers KhattarWong.

For dangerous driving causing death, he can be jailed between two and eight years as a first-time offender. He can also be banned from driving for 10 years.

The penalties for drink driving for a first-time offender are a jail term of up to 12 months, a fine of between S$2,000 and S$10,000, or both. They can also be banned from driving for two years.

Repeat offenders can be jailed for up to two years and fined between S$5,000 and S$20,000. They face a driving ban of five years.

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Lee Kuan Yew Centennial Fund launched to support students and develop young leaders

SINGAPORE: A fund that will support about 2,000 students each year to develop young leaders in Singapore was launched on Tuesday (May 30) to commemorate the 100th anniversary of former Prime Minister Lee Kuan Yew’s birth.

Called the Lee Kuan Yew Centennial Fund, it was established with donations from private and people sectors and has collected over S$82 million (US$60.6m) to date.

The late Mr Lee was born on Sep 16, 1923. He died at the age of 91 in 2015.

Through the activities marking the 100th anniversary of Mr Lee’s birth, Singapore can reflect on Mr Lee’s values and principles and that of its founding generation of leaders, said Deputy Prime Minister Lawrence Wong in his opening address at the launch.

“One enduring lesson is the importance of developing our young people, and helping them to realise their full potential, to be the best versions of yourselves. Because at the end of the day, our people are the only resource that Singapore has,” said Mr Wong.

“That’s why even in our early years, when we struggled to make ends meet, Mr Lee made investing in our people a top priority. He would regularly engage young people, encourage them to get involved in society and contribute to nation-building.”

The fund started as a ground-up initiative by business leaders to invest in and support the development of Singapore youth to “become visionary leaders with the imagination and determination to shape Singapore’s future as an exceptional nation”, said the Ministry of Education (MOE) in a press release.

The government will support this fund by providing a one-off dollar-for-dollar matching of donations for up to S$50 million (US$37m), said Mr Wong.

The fund will be managed under MOE’s Education Fund. It will be used to support the Singapore Young Leaders Programme, which was also launched by Mr Wong on Tuesday, and the Lee Kuan Yew Post-Graduate Scholarship for Urban Greenery and Ecology.

On top of that, it will also help expand the Lee Kuan Yew Scholarship Awards, and provide additional support for up to 1,000 Institute of Technical Education and polytechnic students from disadvantaged backgrounds who “demonstrate resilience and potential”, said MOE in the press release.

The Singapore Young Leaders Programme will allow about 1,000 student leaders across the institutes of higher learning to participate in leadership modules held throughout the year, the press release read.

These include institution-based programmes such as the National University of Singapore’s Kent Ridge Ministerial Forum, the National Youth Council’s leaders course and engagement sessions with industry and government representatives.

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Vietnam urges industry to save energy during heatwave

HANOI: Vietnam is turning off street lights and manufacturers are switching operations to off-peak hours to keep the national power system running amid record temperatures in some areas that have caused a surge in demand. As weather officials warn the heatwave could run into June, several cities have cut backContinue Reading

Deflation risk stalking China’s economic recovery

China’s central bank is pushing back with growing regularity on market worries that Asia’s biggest economy may be sliding toward deflation.

In April, China’s consumer price index rose just 0.1% year on year, putting the economy on the edge of negative territory but not yet deep into the problem.

Indeed, China may currently be experiencing “disinflation” rather than a long-term trend toward deflation. Yet if Japan taught policymakers around the globe anything it’s that deflation concerns can quickly take on a life of their own. 

That’s a problem that China must not take lightly, economists say. And it’s high time People’s Bank of China Governor Yi Gang shut down – and firmly – a narrative that Beijing hardly needs as market worries mount about the health of China’s post-Covid economic recovery.

Strategist Vincent Chan at Aletheia Capital speaks for many when he warns that China is at the “borderline of deflation.”

That same goes for analyst Kelvin Wong at OANDA. “To address this ongoing growth slowdown in China that may lead to a deflationary spiral, which in turn can potentially trigger an adverse impact on countries that export goods and services to China such as Singapore, the Chinese central bank needs to switch away from its current conservative stance to loosen its liquidity tap further to stimulate growth,” Wong argues.

Long-time Japan observers may detect some troubling echoes as Fu Linghui, spokesperson for China’s National Bureau of Statistics, insists that there’s “no deflation” in the economy. And if there is, it’s “transitory.”

This last word might trigger PTSD from similar assurances emanating from Tokyo in the late 1990s. Or their mirror image — “don’t worry, inflation is transitory” — coming from Washington these last two years.

As Nikkei Asia points out in an investigative report this week, consumer prices in mainland provinces Jilin, Shanxi, Guizhou, Liaoning, Anhui, Henan and Shanghai turned negative in April. Data from Chinese research company Wind Show corroborate Nikkei’s findings.

The question, of course, is what to do. A key Xi priority has been to reduce leverage and debt — from local government balance sheets to property developers.

Yet if the focus is on debt reduction while nothing is done to fix the housing sector, then that could be a recipe for deflation.

For now, says economist Raymond Yeung at ANZ Research, the “core view is that China’s economy is deflationary.”

Others argue it’s too early to know where China’s price trends will be six months from now.

China’s price trends could break either way in the coming six months. Photo: Facebook

“While claims that China has entered a deflationary period are excessive, the data indicate that China’s economy continues to be hamstrung by low effective demand,” says economist Yu Yongding, who served on the PBOC’s Monetary Policy Committee from 2004 to 2006. “Official figures also support the claim that China’s GDP growth has been below potential for some time.”

Yu notes that Xi’s government seems reluctant to shoot for a higher growth target than this year’s 5%, in part out of fear that it might exacerbate China’s debt imbalances. At the same time, though, Yu says there’s a risk of a “self-fulfilling prophecy, by weakening confidence and failing to exploit growth potential fully.”

Some of Beijing’s policy options, including cash transfers, might give household consumption an immediate lift.

But “as China’s government well knows,” Yu notes, “consumption is a function of income, a sustained, broad-based increase in incomes depends on economic growth, and infrastructure investment is traditionally the state’s most effective instrument for boosting growth when effective demand is weak. Despite past investments, China still has a large infrastructure gap that urgently needs to be closed.”

Rescuing the property sector might pay the highest dividends. Since January, Xi’s government unleashed a barrage of measures to reduce restrictions on borrowing by developers, curb risks of “capital chain breaks” in the sector as property purchase contracts fall through suddenly, extend lower mortgage rates to incentivize demand for homes and limit commissions for real estate agents.

Economists point out that easing the so-called “three red lines” policy is becoming more urgent. It establishes caps on key metrics debt-to-cash, debt-to-assets and debt-to-equity ratios. Many see this policy as the trigger for many of the biggest real estate stumbles in recent years.

Since the directive already demands that developers disclose details on their debts, it seems feasible to allow property companies to leverage up a bit and delay deadlines for debt targets without fanning new bubbles.

Other solutions include extending lower mortgage rates to first-home buyers in environments where prices of new properties are slumping. There’s also scope for once again allowing private equity funds to play a bigger role in raising capital for residential property projects.

Whatever the strategy, more attention must go toward restoring investor confidence, as strategist Winnie Wu at Bank of America Corp sees it. Since the property sector is “a key concern” for global investors, she says, revitalizing it seems crucial to restoring confidence in Chinese asset markets.

That confidence seems in short supply this month. Chinese stocks are on the precipice of bear market territory amid worries about a slowing economy, geopolitical and trade tensions and deflation fears.

Mainland shares traded in Hong Kong – as measured by the Hang Seng China Enterprises Index – are near the 20% loss threshold for the year.

The drop in profits among Chinese industrial firms, which had a rough first four months of 2023, is weighing on the broader indices. This downshift told skittish investors all they need to know about China’s slowing demand and deepening factory-gate deflation.

Data due out Wednesday – especially China’s Purchasing Managers Index for the manufacturing sector – are widely expected to signal further contraction in April.

A Chinese worker at a spinning factory in Xingtai City, Hebei province. Photo: Xinhua

Analyst Karl Shen at Fitch Ratings notes that China’s secondary-home market “has been cooling since April, with a fall in the number of listed-for-sale homes, lower asking prices and fewer transactions.”

This slowdown, Shen says, follows a “strong rebound” in the first quarter, “suggesting homebuyer confidence remains fragile amid an uncertain economic outlook and weak employment prospect.”

Shen says the drop in average asking prices is likely driven by homebuyers’ hesitation to make purchases and home-upgraders’ selling of their existing homes at lower prices to facilitate faster transactions.

The number of homes listed for sale has also decreased, indicating that many homeowners are delaying the sale amid pricing pressure, and may continue to weigh on transaction volume.

Even so, economist Wei He at Gavekal Research can’t help but wonder if the negativity is overdone.

“Markets have executed a complete volte-face on China’s growth prospects, from exuberance on an expected world-shaking boom to pricing in deep pessimism — is this reversal justified?” he asks.

“For commodity prices, the answer is probably yes. Even a strong cyclical rebound led by spending on consumer services was never going to be as good for commodities as the investment-driven cycles of the past. And the bounce in construction once expected by commodity producers has clearly not materialized, with property developers scarred by the past and uncertain about the future.”

Yet, He adds, “for Chinese government bonds and the renminbi, the recession trade has probably overshot. Recent market prices imply a growth outlook for 2023 as bad as that during the depths of 2022’s lockdowns — a fairly unlikely outcome. Despite all the bad headlines, the labor market is still recovering and companies are planning to expand. This could be a good moment to sell Chinese bonds and buy the renminbi.”

It’s also a good moment, though, for Xi’s new premier, Li Qiang, to buttress his reformist bona fides. Since rising to the No 2 job, Li has managed to lower the temperature surrounding Beijing’s crackdown on Big Tech. Now, it’s time to recalibrate economic dynamics in China – starting with a property market in dire need of restructuring.

The lessons from Japan are to act early and boldly to stop deflationary forces in their tracks. By the time they become ingrained, it might already be too late.

Follow William Pesek on Twitter at @WilliamPesek

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Robot chefs and waiters: 40% of food services jobs at risk of becoming obsolete in 3 years

Additionally, self-ordering kiosks have popped up across fast food chains and bubble tea outlets in recent years.

With the influx of these machines, the future of eateries could see minimal kitchen and floor staff. Current employees will have to be reskilled in areas like customer satisfaction and service improvement.

Industry players said the jobs transformation is already taking place, and both employers and employees in the food and beverage (F&B) sector must embrace the changes or be left behind.

“The most challenging part is the mindset. There must be a willingness to adapt,” said Mr Andrew Kwan, president of the Restaurant Association of Singapore.

“There must be an agility of the mind to say, ‘let’s recognise the trends and make adjustments accordingly’.”

JOBS TRANSFORMATION MAP

To help the sector, a Jobs Transformation Map was launched last week, laying out plans for workers to upskill themselves and take on new roles, such as sustainability specialists or restaurant designers.

“For the workers, it is more critical now than ever to adapt to the speed of changes, and to keep on improving their skills and knowledge,” said Minister of State for Trade and Industry Low Yen Ling.

“Workers who take charge of their own career and professional development by constantly acquiring new skills are the ones who will stay relevant and highly employable.”

Firms looking to redesign jobs can get up to 70 per cent funding support.

An up to 90 per cent wage subsidy scheme is also in place for employers who are reskilling existing workers for new roles.

Ms Low said there is growing consumer demand for convenience, personalised and experiential services, and sustainable practices.

Another key trend shift she highlighted is a greater adoption of technology for digital solutions and automation equipment since the COVID-19 pandemic.

An ageing local workforce and changing career aspirations of Singapore’s youth have also led to more competition for workers.

These challenges mean that companies need to redesign jobs, embrace technology, and optimise their manpower model to stay competitive, Ms Low said.

Last year, the food services industry employed about 235,000 workers and contributed some S$4.5 billion to Singapore’s economy.

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BRICS expanding opportunities to influence global governance 

This week, the five foreign ministers of BRICS (Brazil, Russia, India, China and South Africa) will meet in Cape Town. On the second day of their meet they will be joined by 15 other foreign ministers representing Africa, the Global South, and “Friends of BRICS” nations. Among other things these deliberations will seek to firm up the agenda for the BRICS Summit to be held during August 22-24 this year. 

What are the core issues that are expected to engage their interactions, and what makes BRICS an increasingly decisive forum for global governance?

BRICS 2.0

In its second decade, BRICS has emerged as the world’s most powerful grouping, with expanding recognition for being the locomotive of global growth. But BRICS’ economic rise also marks an important geopolitical drift, as this grouping has come to be seen as an alternative to the US-led “liberal world order.” 

For instance, BRICS’ collective gross domestic product has surpassed the US-led Group of Seven advanced industrialized nations. In purchasing power parity terms, while the collective GDP of the G7 shrank from 50.42% of world GDP in 1982 to 30.39% in 2022, BRICS’ GDP for the same period enhanced its share from 10.66% to 31.59%.

As well, while the Covid-19 pandemic set in deceleration of the G7 economies, BRICS economies – especially those of China and India – continued to show strong potential.

Also, the Ukraine war has set the stage for BRICS becoming increasingly conspicuous, as the grouping is seen as the most reliable partner for Russia. Besides Russia itself, not one of the other four BRICS nations has supported any of the Western resolutions to condemn Moscow’s military operations. They have also not collaborated with Western economic sanctions that seek to impose obligations on other nations.

Indeed, BRICS has emerged as the singular support base keeping the Russian economy afloat. Also, while the United States has been busy raising a coalition of 50 or so nations to supply Ukraine for its war efforts, South Africa, the current chair, has prioritized BRICS playing a greater role in ending the conflict between Ukraine and Russia.

Individually as well, China and India have been exploring ways to facilitate an early end of the Ukraine war.

This clearly reflects the new bold BRICS. In face of the International Criminal Court having issued arrest warrants for President Vladimir Putin for his so-called war crimes in Ukraine, South Africa has announced diplomatic immunity to all officials from Russia. This confidence and enthusiasm both within BRICS and about BRICS makes their parleys both interesting and intriguing, with implications way beyond these five nations.

BRICS expansion

For instance, about two dozen nations have expressed interest in joining the BRICS grouping. About 20 have formally applied for membership, which of course has remained frozen since South Africa joined the original BRIC grouping in 2011.

These applicants include nations from across the world: Algeria, Argentina, Baharain, Bangladesh, Belarus, Egypt, Indonesia, Iran, Nigeria, Saudi Arabia, Senegal, Sudan, Thailand, Tunisia, Uruguay, Venezuela, Zimbabwe and so on.

Within BRICS as well, the member nations’ reluctance to open up has witnessed change. China has typically been the most vocal supporter of expansion, while India was seen as the most reluctant. Over the years, Russia, Brazil and South Africa – in that order – have also shown greater inclination to add new members, though each of them has its own preferences.

The Ukraine war has seen Russia becoming increasingly supportive of BRICS expansion. This is driven by its need to expand its support base against Western censure and sanctions. 

New Delhi remains concerned about Beijing trying to pack more of its friends into the forum, which could result in India getting marginalized. But with India now the world’s fifth-largest economy, New Delhi may have its own reasons to support friendly nations like Argentina, Indonesia, Saudi Arabia, and the United Arab Emirates.

While BRICS members will need to build consensus on detailed criteria and other modalities for new members’ inclusion, this growing global interest surely enhances BRICS’ credibility and influence on global governance.

Expanding intra-BRICS trade has been the primary tool for strengthening the forum. This has lately seen increasing focus on exploring alternatives to reduce their dependence on the US dollar, and creation of a BRICS currency is expected to be on top of their agenda this week. 

The freezing of Russian assets by the West has seen this becoming a priority, where some of the BRICS members have already put in place mechanisms for using local currencies. China has been working on globalizing its yuan. New Delhi has also evolved arrangements to trade in Indian rupees with 18 nations.

India’s agenda

India, which is going to host two back-to-back summits – of the Shanghai Cooperation Organization on July 3-4 followed by the Group of Twenty meet on September 9-10 – has sought to use such multilateral meetings to evolve a consensus on its own agenda. But in addition to these preoccupations, the BRICS foreign ministers’ meet this week will see Indian Foreign Minister Subrahmanyam Jaishankar’s bilateral meetings with China and Russia drawing special scrutiny and interest. 

The Hiroshima G7 summit two weeks ago saw Indian Prime Minister Narendra Modi having his first in-person bilateral meeting since the beginning of Ukraine war with President Volodomyr Zelensky.

During the war these two leaders had spoken four times by phone, and before that they had only met briefly at the Glasgow climate-change summit in 2021. But now, after this month’s meeting, Modi’s call to “raise your voice against unilateral attempts to change the status quo,” even if spoken in the context of border tensions between India and China, will require some explaining with India’s time-tested friend Russia.

This will also be seen against the backdrop of Modi’s meeting with Vladimir Putin during the Samarkand SCO Summit last September where the Indian PM had told the Russian president that “today’s era is not an era of war,” words that were repeated ad nauseam in Ukrainian narratives with Western media seeking to paint them as India’s warning to Moscow.

Likewise, with India preparing to host President Xi Jinping at the SCO and G20 summits, this has created strong expectations of the two sides finding a breakthrough in their border tensions.

These will soon enter their fourth year, with both sides maintaining heavy forward deployments while 18 rounds of senior-level talks and more than a dozen inter-ministerial meetings, plus meetings between their foreign and defense ministers, have not been of much avail so far.

At Cape Town this week, the foreign ministers of India and China will have their third bilateral in three months. India has maintained that bilateral relations cannot be normal until the standoff on the border is resolved. 

Conclusion

All these bilateral equations of BRICS members are bound to impact their efforts at building a multilateral consensus on a range of issues, from expanding membership to initiatives for addressing global challenges. Many of these are also issues that get reverberated in other forums and will have a direct impact on the parlays of coming SCO, BRICS and G20 summits.

BRICS is seen today as the most formidable voice for the Global South on the high table of major powers of the post-World War II US-led world order. With the Ukraine war widening that bipolarity, BRICS will have to tread with care. 

Second, Brazil’s Luiz Inacio Lula da Silva becoming the next chairman of BRICS in August will also sharpen its credentials as an alternative to US-led global governance. 

For BRICS to overcome its internal disjunctions and harness its historic opportunities will require not just strong mutual understanding and trust but everyday diplomatic finesse and foresight for bold initiatives. And this will remain a work in progress, as an expanded BRICS will only makes consensus that much harder to achieve.

Follow Swaran Singh on Twitter @SwaranSinghJNU.

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