Solving the green energy riddle

In 1987, the Nobel laureate economist Robert Solow famously observed, “You can see the computer age everywhere but in the productivity statistics.” The phenomenon that became known as the Solow paradox referred to the slowdown in productivity growth during the 1970s and ’80s despite the rapid development in technology during the same period.

A similar paradox might describe the green energy transition. Amid an explosion in wind turbines and solar panels, the global share of coal, the dirtiest fossil fuel, has barely moved since the early 1980s, as growth in China and India has offset reductions in Europe and the United States. Meanwhile, the proportion of hydroelectricity has been flat over that period, while nuclear rose but recently fell because of Germany’s phase-out.

Dig deeper into the details, however, and there are signs that the renewables riddle can be solved. Oil has lost significant ground while gas, the cleanest fossil fuel, has gained. So-called “modern” renewables – solar, wind, and geothermal – have also picked up dramatically, going from 1% of all global energy production in 2007 to 7% in 2021. And last year, wind and solar produced 12% of global electricity. 

While fossil fuels remain 82% of the world’s energy mix, there is progress in bringing this down. What we need now is to accelerate the transition.

The money

How this will be accomplished is a matter of science, policy and, above all, money.

BP’s most conservative transition scenario, based on current technology, estimates that solar and wind output will rise from 2,100 terawatt-hours in 2019 to 6,890TWh in 2030. By contrast, the scenarios for reaching net-zero carbon by 2050 from both BP and the International Energy Agency (IEA) have the 2030 figure at just over 12,000TWh.

That’s the difference between scaling up renewables by a factor of three versus a factor of six. Put another way, the conservative scenario adds more than the entire electricity generation of the US, while net-zero scenarios gain by the equivalent output of China plus India.

In the right locations, solar and wind are the cheapest sources of new electricity. This has been achieved by some moderate improvements in technology, but mostly by scaling up manufacturing and experience, and by reducing capital costs, as investors have grown comfortable with these low-risk projects.

Solar power in the best locations in the Middle East, North Africa or South America cost about 12 US cents per kilowatt-hour in 2012, but bids by 2021 came in at just over 1 cent.

Costs for offshore wind have also dropped dramatically in recent years, and subsidy-free wind farms have been awarded in Europe, with companies such as Denmark’s former oil and gas company Ørsted and Norway’s state petroleum firm Equinor in the lead. Wind is even progressing in the US and East Asia, with costs around 7.5 cents per kilowatt-hour predicted to fall to 5.3 cents by 2035.

By comparison, at current prices, generation from gas costs some 3 to 4 cents per kilowatt-hour in the US and Middle East, and 13 cents in Europe and East Asia. The inclusion of a carbon price at Europe’s current level of around $100 per ton would add an additional 3.5 cents to these figures, making wind and especially solar clearly superior. Nuclear is low-carbon but more costly.

Challenges: trade and materials

With such attractive characteristics, what’s holding back a more rapid renewable revolution?

There are broadly eight sets of challenges, applying on different timescales and in different places. These are trade, materials, land, the grid, intermittency, end-use, policy, and society. 

Supply-chain bottlenecks and rising interest rates have temporarily interrupted the trend of cost reductions, but these will likely resume. Yet grit in the wheels of the global trade engine will remain, at least in the short-term.

Europe, the US and China are engaged in a subsidy race to spur domestic manufacturing and control key future energy technologies.

Tariffs, “buy-local” provisions, onshoring inducements, and concerns over human rights and the environment, however worthy, complicate the China-dominated renewable industry, which has been so successful at driving down costs.  

China makes as much as 95% of key solar module components, about 75% of lithium-ion battery parts, and more than half of wind turbine nacelles (the cabins that connect the blades to the tower and house the generator and gears).

The United States’ massive Inflation Reduction Act throws down the gauntlet to Beijing, but also to Brussels. Smaller markets, such as India and the UK, have their own aspirations but risk being caught between the giants. A trans-Atlantic green trade war would raise costs all around, while subsidies risk locking in uncompetitive industries.

China and, to a lesser extent, Russia and a few African and Latin American countries also dominate the supply chain for basic raw materials used in renewable energy, batteries, hydrogen electrolyzers, and electric vehicles – notably rare-earth minerals, lithium, cobalt, nickel, copper, platinum-group metals, graphite, and polysilicon.

China doesn’t monopolize the mining of rare earths as it once did, but it remains the leader in their processing, and similarly for copper, lithium and polysilicon. It has extensive international investments, too.

While there’s no shortage of most of these minerals in the ground, there are constraints on how fast extraction and processing can be increased.

Resource nationalism in Latin America and Indonesia favors domestic ownership and processing. Political insecurity and troubling labor conditions in the Democratic Republic of Congo, the main source of cobalt, and strikes and electricity shortages in platinum-mining South Africa, are further problems.

As the US, the European Union, the UK and their allies seek to increase critical mineral mining and processing, environmental opposition makes it difficult to approve additional extraction. Mining for copper and gold in Minnesota and Alaska, and lithium in Serbia, has been torpedoed in recent years.

Recycling is only of limited help, given that most renewable systems today are new and must scale up multiple times, requiring a large input of primary materials.

Some of these limitations can be designed around – novel electrolyzers avoid precious metals, wind-turbine and electric-vehicle motors can do without rare earths, copper can be substituted with aluminum, and new batteries need less nickel or cobalt. But these choices all involve some friction, higher costs, or performance trade-offs.

Challenges: land, grid, intermittency, and end-use

One requirement that can’t be designed away is land. An oil or gas field, or a coal or nuclear power plant, has a relatively small footprint for the energy it generates. Wind, solar, or growing crops for biomass require much larger areas.

For the EU, India, Japan and South Korea, a predominantly solar-based system could eat up 5% of total land area by 2050. In Germany, only about 9% of the country is technically feasible and available for wind power.

Offshore wind, particularly in constricted marine locations such as the North Sea, the northeastern US, or Singapore, competes with naval grounds, sensitive marine ecosystems, historic and tourist locations, views, fishing grounds, shipping lanes, and so on.

Even acceptable sites may face lengthy permit delays and legal battles, as in the Cape Wind project off Cape Cod, Massachusetts, which applied for a permit in 2001, was initially approved in 2005, but finally abandoned in 2017 after opposition from well-heeled and prominent residents and local property owners, such as former US senator Ted Kennedy, Governor Mitt Romney, and current US climate envoy John Kerry.

Land barriers are not insuperable, but they aren’t negligible either. 

A related issue is that of grid connections. Wind, solar, and hydroelectric dams are often built in remote locations and need long-distance transmission lines to take their electricity to consumers.

In the US, 2,000 gigawatts are estimated to be waiting for a grid connection. Renewable developers in the UK have about 176GW in the queue – more than twice the existing capacity from all sources – with some being told they may have to wait until 2036.

Building transmission lines to take power from windy northern Germany to the industrialized south has also been held up.

The grid is particularly important because of another characteristic of wind and solar power: intermittency. Anti-renewable advocates are fond of reminding us that “wind doesn’t always blow, and the sun doesn’t always shine,” as if energy specialists didn’t notice. For now, the quantities of wind and solar power are relatively small in most places, and can be balanced by “dispatchable” gas, coal, biomass, or nuclear power.

Solar output regularly exceeds total midday demand in areas such as California and South Australia, only to fade out in the evening when demand goes up. Batteries are being deployed on a growing scale, but current batteries are poorly suited to seasonal storage – for instance, saving large quantities of surplus power from summer for a cold, dark, windless northern European winter.

In the net-zero scenarios of the IEA or BP, wind and solar would make up 38% of electricity generation by 2030 and 68% by 2050. Such a system would require all options to function daily and year-around.

It would also need geographic diversity of resources connected by long-distance cables, such as the Xlinks project, which will bring 3.6GW of solar and wind from Morocco to the UK via a subsea interconnection.

Other low-carbon resources include gas or coal with carbon capture and storage; nuclear fission; hydroelectric dams; and geothermal. Then there are the less developed or more futuristic options, such as tidal, wave, current, and ocean thermal generation; nuclear fusion; or space-based solar power.

Medium-term storage can use new battery types, such as iron-based flow batteries, or thermal storage (making ice to store cold energy, or heating salts or other materials, as concentrated solar power plants do).

Long-term storage can rely on hydrogen or its derivatives such as ammonia, methanol, or synthetic methane. Hydrogen also helps with bringing renewable electricity into other end-uses: the provision of high-temperature heat for industry, “e-fuels” for long-distance transport, and chemical feedstocks. 

The solutions: policy and society

Perhaps the two most intractable challenges remain in policy and society. Today’s renewable transition is unevenly distributed. The Netherlands, a small and not very sunny country, generates more non-hydro renewable power than the whole of sub-Saharan Africa. But this must change dramatically by mid-century, when most population and economic growth occurs outside Europe.

BP’s net-zero scenario sees Asia-Pacific as having almost half the world’s renewables by then, while Africa, the Middle East and South America collectively move to twice Europe’s level.

To get there, government policies will need to move away from over-rewarding pet projects in favor of cost-effective renewables. The investor community must also stop penalizing proposals in developing economies.

On the social side, vested interests, legacy industries, railways, political parties, and labor unions often oppose renewables, particularly in the case of coal-dependent regions.

South Africa’s Just Energy Transition Partnership, backed by the EU, the UK and the US, was intended to help the country move away from coal. But its Energy Minister Gwede Mantashe, a former miner and self-proclaimed “coal fundamentalist,” is also a key supporter of President Cyril Ramaphosa, and not so keen on the plan.

Renewable energy has the wind in its sails. Technology, economics, security concerns, and climate policy strongly support its progress. But the realities of delivering such an enormous transformation are too often underestimated or glossed over.

This is not an argument against renewables, but it demands a strong response to identify and remove barriers as quickly as possible. With careful planning and leadership, the clean energy riddle can be solved, and the renewables revolution can spread beyond California and Copenhagen to Kolkata, Congo and Cape Town. 

Follow Robin Mills on Twitter @robinenergy.

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False alarm behind Biden’s tech war emergency

US President Joe Biden has officially determined that the rapid advance of China’s semiconductor, microelectronic, quantum computing and artificial intelligence technologies constitutes “an unusual and extraordinary threat” to US national security.

Declaring a “national emergency,” the president has ordered new procedures to restrict US outbound investments that could exacerbate the supposed threat.

But while the wording of the White House statement is severe, the policy measures it outlines are neither new nor particularly extreme in the context of the administration’s escalating tech war on China.

Although US venture capitalists seem to be the primary target of the forthcoming restrictions, the Semiconductor Industry Association (SIA) quickly released a statement on the matter:

“The semiconductor industry recognizes the need to protect national security, and we believe ensuring a strong and globally competitive US semiconductor industry is a vital part of achieving that goal.

We are assessing today’s proposal and welcome the opportunity to provide feedback as part of the public comment period. We hope the final rules allow US chip firms to compete on a level-playing field and access key global markets, including China, to promote the long-term strength of the US semiconductor industry and our ability to out-innovate global competitors.”

On August 9, the White House issued an “Executive Order on Addressing United States Investments in Certain National Security Technologies and Products in Countries of Concern.”

The executive order states that “countries of concern are engaged in comprehensive, long-term strategies that direct, facilitate, or otherwise support advancements in sensitive technologies and products that are critical to such countries’ military, intelligence, surveillance, or cyber-enabled capabilities.”

China’s semiconductor industry is among those targeted by the executive order’s new investment curbs. Image: Twitter

It goes on to say that these advancements “will accelerate the development of advanced computational capabilities that will enable new applications that pose significant national security risks, such as the development of more sophisticated weapons systems, breaking of cryptographic codes, and other applications that could provide these countries with military advantages.”

The “countries of concern,” which are listed in an annex, are the People’s Republic of China, the Special Administrative Region of Hong Kong and the Special Administrative Region of Macau.

These “countries of concern are exploiting or have the ability to exploit certain United States outbound investments, including certain intangible benefits that often accompany United States investments and that help companies succeed, such as enhanced standing and prominence, managerial assistance, investment and talent networks, market access, and enhanced access to additional financing.”

President Biden has therefore ordered the Secretary of the Treasury, in consultation with the Secretary of Commerce and the heads of other relevant government agencies, to issue regulations that identify transactions fitting this description, require notification of such transactions, and prohibit transactions determined to “pose a particularly acute national security threat because of their potential to significantly advance the military, intelligence, surveillance, or cyber-enabled capabilities of countries of concern.”

According to the US Congress-funded Voice of America (VOA), the Biden administration “has been working on

the executive order at least since August 2022… Last October, the White House stated it was moving ahead with the program, mentioning ‘screening of outbound investment’ as an approach to address national security threats under its National Security Strategy.”

Biden has declared a national emergency, but this is a longer-term policy concern dating back to president Donald Trump. It may be regarded as a ratcheting up of diplomatic and economic pressure on China or a way of countering rising Republican allegations that Biden is weak on China.

In June, Sequoia Capital, the venerable Silicon Valley venture capital firm, announced plans to deal with the potential risk to its business by spinning off its operations in China, a process that should be completed by the end of March 2024. In fact, all US investors received advanced warning of the soon-to-be-imposed restrictions.

The measures appear to be a double-edged sword. In May, Patrick McHenry, chairman of the US House of Representatives Committee on Financial Services, sent Treasury Secretary Janet Yellen a letter saying:

“US venture capital firms typically acquire control, substantive decision-making rights, board seats, or material nonpublic technical information when they invest. As your colleagues in the Office of Investment Security know, these represent potential national security risks to the target country – in this case, China. It is inexplicable that the administration hopes to rescue China from these risks before Beijing can.”

The semiconductor industry’s concerns were put much more directly by Intel CEO Pat Gelsinger at the Aspen Security Forum in July.

“Right now, China represents 25% to 30% of semiconductor exports. Right, if I have 25% to 30% less market, I need to build less factories, right? You know, we believe you want to maximize our exports to the world. We want to maximize selling fish, not fishing rods, right, across the world, including China,” Gelsinger said.

Intel CEO Patrick Gelsinger isn’t a big fan of Biden’s tech war restrictions. Image: Twitter

“You can’t walk away from 25% to 30% and the fastest growing market in the world and expect that you remain funding the R&D and the manufacturing cycle… this is strategic to our future, we have to keep funding the R&D, right, the manufacturing, etc.

“We agree on the priority of national security, but, as (National Security Advisor) Jake Sullivan said, high walls, small garden. Today, we have over 1,000 companies on the entities list, many of which have nothing to do with national security… and nothing to do with security concerns in China.”

What Sullivan actually said was “…we are protecting our foundational technologies with a small yard and high fence.” But the yard is getting bigger, new fences are being built and US business and government clearly do not see eye to eye.

Some compromise may be reached during the period for public comment, but at this point it appears that the advance of Chinese technology will henceforth take place with less US participation and, therefore, less US understanding of what is happening in China.

Follow this writer on Twitter: @ScottFo83517667

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IN FOCUS: Is there a future for Singapore’s wet markets?

HAWKER CENTRES, WET MARKETS “INTERCONNECTED”  

The sense of community is strong among stall holders, noted Mr Tan, who helps his parents at their fishball stall. 

“In this hawker culture and wet market culture, there is an unspoken community where people know each other … We have seen each other over a long period of time. Like somebody will tell me, ‘I see your dad when he was a kid, now I’m seeing you,’” the third-generation stall holder said. 

Asked what can be done to preserve wet markets, Mr Tan said that in the short-term, the government could be “less restrictive” with hiring regulations, and allow stall holders to hire foreigners to help. 

Hawkers and wet market stall holders can only hire Singaporeans and permanent residents currently. But “most are not willing to do the job”, he said.

In the long run, Mr Tan believes hawker centres and wet markets “go hand in hand”. The wet market is connected to a hawker centre in many areas in Singapore, and many hawkers work together with the wet market stall holders, he said. 

“For example, if you sell curry fish head, you get the fish head from the fishmonger. It’s a small community that’s interconnected.”

In the same vein, the 2018 survey by NEA, as well as its 2016 and 2014 surveys, found that hawker centres were consistently cited as respondents’ top three most important amenities in a neighbourhood. 

A total of 91 per cent of respondents in the 2018 survey agreed that hawker centres promote interactions among all walks of life, and are “good places” for interaction with friends, family and neighbours. 

Mr Tan added that older people who come to hawker centres also want “a shopping experience” with their families. For instance, one of his customers would eat breakfast with their family first at the hawker centre before they shop for groceries at the adjacent wet market. 

“It’s like an integrated experience, so I think it’s just as important for wet markets to be preserved,” he said.  

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CNA Explains: Slump and recovery – what is the current state of the Singapore economy?

SINGAPORE: Singapore is set for tepid growth through the rest of the year, as the economy sees diverging prospects for its different sectors, economists said on Friday (Aug 11).

“The story of Singapore’s economy is really a story of two different parts,” said Oxford Economics’ senior economist Alex Holmes.

Singapore has narrowed its projection for economic growth this year, citing a weak outlook for external demand.

The growth forecast was trimmed to a range of 0.5 to 1.5 per cent, down from an earlier estimate of 0.5 to 2.5 per cent, the Ministry of Trade and Industry (MTI) said on Friday (Aug 11).

So far in 2023, Singapore’s economy has seen tepid growth. On a year-on-year basis, gross domestic product grew 0.4 per cent in the first three months before improving slightly to 0.5 per cent in the second quarter.

On a quarter-on-quarter seasonally adjusted basis, the economy eked out growth of just 0.1 per cent in the second quarter, a reversal from the 0.4 per cent contraction in the first quarter.

WHAT’S HURTING EXTERNAL DEMAND?

Singapore is a small economy that is highly dependent on external demand.

From 2015 to 2019, external demand accounted for around 67 per cent to 72 per cent of Singapore’s GDP, according to a piece published by MTI in its first-quarter economic survey in May.

Key markets include the United States and the Eurozone, but growth prospects in these economies are set to slow even more in the second half of the year when the effects of elevated interest rates take hold.

China’s growth is also expected to moderate through the rest of the year, as the post-pandemic recovery in services slows in tandem with deteriorating consumer confidence.

In addition, the ongoing global electronics downturn is “proving to be a little bit more protracted” than initially thought, MTI said.

A gradual recovery is only “expected towards the end of the year at the earliest” – a view echoed by HSBC economist Yun Liu.

“Trade headwinds are not dissipating,” said Ms Liu. “While there are some initial signs that point to stabilisation in the tech cycle, tech-heavy economies have not seen a meaningful turnaround.”

On top of that, there remains a host of uncertainties such as more persistent-than-expected inflation in the advanced economies, as well as the risk of escalation in the war in Ukraine and geopolitical tensions among major powers.

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Punitive tax plan for Western firms still in Russia

In Russia this summer, you can still enjoy a Cornetto, but you can forget about eating a Tunnock’s tea cake or a Big Mac. This is because Cornetto’s UK-headquartered parent company, Unilever, is still operating in Russia after its invasion of Ukraine, alongside many other Western firms such as PepsiCo.

While lots of firms, including McDonald’s and the Scottish confectionery maker Tunnock’s, have cut business ties with the country since the war started, the Kiev School of Economics estimates Western companies still operating in Russia made over US$213.9 billion in revenues in 2022.

The resulting $3.5 billion in taxes on profits paid to Russia is only a small part of their contribution to the war: the income taxes and social contributions of their employees, as well as the VAT on their sales, feed into the state’s budget. The sense of normality they give to Russian citizens also arguably fosters support for the invasion of Ukraine.

Companies still doing business in Russia also hurt the citizens of the countries they come from. By essentially supporting the war, they share responsibility for higher energy prices, for example. They also increase the cost on Western taxpayers of supporting the defense of Ukraine.

Like many Western companies that have stayed in Russia, PepsiCo and Unilever (Cornetto’s parent company) have defended the decision by claiming they provide essentials and need to stay for humanitarian reasons.

In addition to detailing donations made to Ukrainian refugees, the statement from PepsiCo said the company “must stay true to the humanitarian aspect” of its business as a food and beverage company by continuing to offer “daily essentials” in Russia “such as milk and other dairy offerings, baby formula and baby food.”

PepsiCo pointed out it also continues “to support the livelihoods of our 20,000 Russian associates and the 40,000 Russian agricultural workers in our supply chain.”

Unilever said in a statement earlier this year that, while it’s still selling products in Russia, it stopped imports and exports, all media and advertising spend and other capital flows into and out of Russia in March 2022. It’s not “trying to protect or manage” its business in Russia, the company said, but “exiting is not straightforward.”

Indeed, many of those who provide non-necessary items say they cannot leave because the Russian government would seize their assets and intellectual property if they do.

But every time a business makes the choice to leave Russia or has their assets seized, the ones who stay face lower competition, and potentially make even more profit. As of today, the only price they pay for staying is a tarnished reputation in Western countries.

A tax on the cost of war

But there is a way to make foreign companies pay the cost they impose on the world, while acknowledging the impossibility of making them completely leave Russia.

In fact, Western governments have already designed the two main tools necessary. What it would take is a coalition of sanctioning countries and a mechanism that’s already being used in other regulations: the “Pillar 2” OECD strategy on taxation, due to come into force next year, as well as the EU’s new Carbon Border Adjustment Mechanism, due to come into force in October 2023.

The coalition of sanctioning countries must first implement a tax on a Western company’s Russian revenues. This is public information available in company financial reports – other organizations already track this information.

The tax would cover the company’s sales, based on the goods and services bought by people in Russia. But the tax would be collected by the country in which the company is headquartered.

Hands counting Russian notes, piles of rouble-denominated notes on the table in foreground.
Doing business in Russia. Photo: Shutterstock via The Conversation / Andrey Sayfutdinov

In the case of sales of Cornetto ice creams, for example, Unilever is the parent company and is based in the UK. So the UK government would have the first option to tax Unilever, but if it chose not to, any other country in the coalition could do so instead.

That would mean a country has nothing to gain from protecting its national businesses. If the UK does not tax Cornetto sales in Russia, Unilever could be taxed by the EU or US and the proceeds would go into their government coffers instead.

The OECD’s Pillar 2 tax agreement uses this principle in its aim to end the practice of fictionally locating profit in tax havens. By the end of this year, countries have committed to charge at least 15% in profit tax to the largest multinational companies in the EU and in the UK.

If some part of a multinational’s profits is not taxed abroad, the country in which the company is headquartered can tax extra, up to the 15% limit. And if that country does not impose the extra charge, other countries in which the firm is active can collect the unpaid tax.

What about non-Western companies?

Charging the tax on Western companies only would disadvantage them in global markets. It may also make it even more profitable for other countries to trade with Russia. To avoid such “leakage”, non-Western companies who trade with the West and continue to do business with Russia should also be made liable for the tax.

This amounts to a form of extra-territorial trade sanction. The approach is simple: if a company wants to do business with the West, it must pay a fine for any trade in Russia. The US already does something much stricter to companies trading with Iran or Cuba. French bank Société Générale paid US$1.3 billion to the US government in 2018 as a punishment for providing financial services in Cuba.

Taxing foreign companies to level competition is very similar to a border adjustment mechanism for polluting industries. This is what the EU will begin to do in 2026 under the Carbon Border Adjustment Mechanism.

It will charge a carbon tax on certain products or activities, starting with the most energy-intensive industries such as cement, iron and steel production, unless a company can prove it has already paid the equivalent at home.

Child with flowers in hair holding sign with Ukrainian flag colours that says
Photo: Shutterstock via The Conversation / Mykola Romanovskyy

Global public opinion has turned against Russia since the invasion of Ukraine. Just like with global tax evasion and climate change, most countries understand that it is in everyone’s interest that a nuclear power is not allowed to invade other countries with no consequence.

The tools the world has developed to cooperate on international taxation and carbon emissions could now be used to take definitive action on economic sanctions and make the war in Ukraine much more difficult for Russia to sustain.

Renaud Foucart is Senior Lecturer in Economics, Lancaster University Management School, Lancaster University

The writer does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Singapore narrows 2023 growth forecast range to 0.5-1.5%, as external demand outlook remains weak

SINGAPORE: Singapore has trimmed its growth forecast for 2023 amid expectations for demand from key external economies to remain weak ahead.

The Ministry of Trade and Industry (MTI) said on Friday (Aug 11) that the country’s gross domestic product (GDP) for this year is now expected to come in between 0.5 to 1.5 per cent, narrowing from the previous 0.5 to 2.5 per cent range.

The decision comes alongside data showing the economy growing by 0.5 per cent year-on-year in the second quarter.

This is a notch below the advance estimate of 0.7 per cent, but slightly advancing from the 0.4 per cent growth in the first quarter.

On a quarter-on-quarter seasonally-adjusted basis, Singapore’s economy expanded marginally by 0.1 per cent between April and June. This marked a reversal from a 0.4 per cent contraction in the first quarter but underperforming the advance forecast of 0.3 per cent.

For the first half of the year, Singapore’s GDP growth averaged 0.4 per cent on a year-on-year basis.

“WEAK” EXTERNAL DEMAND FOR REST OF 2023

In its quarterly assessment, MTI said it sees a “weak” external demand outlook for the rest of the year.

Apart from the expected slowdown in Singapore’s key external demand markets, the downturn in the global electronics sector will also likely be protracted with a gradual recovery happening only “towards the end of the year at the earliest”, it said.

At the same time, there remain downside risks in the global economy. 

These include more persistent-than-expected inflation in the advanced economies which could induce tighter global financial conditions and in turn lead to a sharper pullback in global spending and worsen the ongoing manufacturing downturn. 

Escalations in the war in Ukraine and geopolitical tensions among major global powers also add to the risk of renewed supply disruptions, dampen consumer and business confidence, as well as weigh on global trade. 

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BOI event set to strengthen alliances, networks for EEC

The Board of Investment (BOI) has joined forces with the Thai Subcontracting Promotion Association (SUBCON) and Informa Markets to organise the “MIRA and SUBCON EEC 2023” event from Sept 6-8 at Nongnooch Pattaya International Convention & Exhibition Center (NICE), Chon Buri.

The aims of the event are to strengthen entrepreneurs in the eastern part of the country, a zone underlining the region as “Asean’s sourcing and manufacturing excellence and subcontracting centre”, and be a step towards a Thai industry transition to the future, which is aligned with the strategy to transform the country into a new economy.

The event is targeted to match over 600 businesses and to generate over 2 billion baht in business value.

Mr Narit Therdsteerasukdi, BOI Secretary-General, said that the BOI, in collaboration with SUBCON and Informa Markets — a world-leading international exhibitions organiser — is organising MIRA (Maintenance, Industrial Robotics and Automation) and SUBCON EEC 2023 for the second consecutive year.

The event is a comprehensive trade and service exhibition and industrial solutions event held in the Eastern Economic Corridor (EEC) comprising leading brands who work in the Maintenance, Industrial Robotics, Automation, and Subcontracting sectors.

The event will also display industrial parts and the most comprehensive business matching forum in the eastern region being built to support the Thai manufacturing and service sectors to be ready for their transition into future industries, in particular industries that are key to the eastern region’s wealth, such as electric vehicles, electronics, and intelligent manufacturing systems, he said.

More than 150 companies will participate in the exhibition, and the event is expected to also draw in over 100 large buyers and achieve 600 pairs of business matchings. The event is also expected to draw in around 5,000 visitors, he said.

“The BOI foresees that the support of domestic subcontracting producers entering into the global supply chain is a key strategy to promote Thai entrepreneurs to global markets, especially for Thai SMEs that execute with quality and in accordance with international standards in new industries such as electric vehicles (EV), electronics, automation, and robotics.

The BOI has continuously joined forces with such alliances to organise activities that link each industry in the EEC area for the second consecutive year, seeing the zone as the main industrial area of the country.

“This event will increase opportunities for Thai entrepreneurs to co-operate with leading foreign companies in sourcing, technology transfer, and subcontracting, as well as to create joint ventures between Thai and foreign countries, thus strengthening the supply chain of the targeted industries,” Mr Narit said.

Mr Kiattisak Jirakajonvong, President of SUBCON, said that following many investment projects in the EEC area, this is an important opportunity for Thai entrepreneurs to connect with foreign business partners and new investors in the targeted industries.

Home to over 400 members in the international trade arena, the Thai SUBCON association is ready to be a bridge that connects Thai entrepreneurs by helping them participate in important international exhibitions to create new trade opportunities, he said.

“We have also been a part of the SUBCON Thailand event that has been held continuously for more than 17 years and became a part of the SUBCON EEC for the first time last year. The event received a very good response from our members, as more than 90% of our members agreed to join the event again this year.

“This is a guarantee of confidence in doing business with suppliers and Thai partners. The association is confident that organising SUBCON EEC 2023 will be another way to create new opportunities for Thai entrepreneurs to move further toward the transitional industries, in particular, the targeted industries which will be key to upgrading the EEC to become the economic centre of the region,” he said.

Mr Sanchai Noombunnam, General Manager of Informa Markets, said that since Informa Markets has been working with the BOI and receiving great support from various alliances such as SUBCON, Informa foresees an opportunity to further expand the achievement of SUBCON Thailand — which is normally held in Bangkok — to a new important economic area such as the EEC.

He said Informa Markets initiated organising MIRA and SUBCON EEC in the past year to create an opportunity for entrepreneurs in the area to meet with large manufacturers who have high purchasing power to invest in the area, as well as to bring technology and innovation that corresponds to the industry of leading manufacturers to the exhibition.

The event is also happening to promote knowledge exchanges, such as in the field of electric vehicles, electric appliances, and mechanical and future industries as well, namely aircraft maintenance, medical equipment, robotics, and automation.

The previous event had been well received and was considered a great success, he said.

“This time, Informa Markets is ready to again organise MIRA and SUBCON EEC 2023 for the second year. There will be opportunities to witness modern technology and innovation in industrial maintenance and automation, including the advanced robotic system that today has become an important component of the Thai manufacturing sector,” he said.

At the same time, system integrator service providers from Thailand and Japan have also been invited to share their experiences and exchange information.

Last but not least, an important highlight that is regarded as the strength of the SUBCON EEC event is the business matching forum organised by BOI.

Moreover, what can’t be missed is a seminar giving an update on trends and new knowledge in the industry from experts sharing their direct experiences through various topics, all with the aim to connect major buyers from around the world, he said.

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Board of Investment event set to strengthen alliances, networks for EEC

Board of Investment event set to strengthen alliances, networks for EEC
From left: Kiattisak Jirakajonvong, Narit Therdsteerasukdi, and Sanchai Noombunnam.

The Board of Investment (BOI) has joined forces with the Thai Subcontracting Promotion Association (SUBCON) and Informa Markets to organise the “MIRA and SUBCON EEC 2023” event from Sept 6-8 at Nongnooch Pattaya International Convention & Exhibition Center (NICE), Chon Buri.

The aims of the event are to strengthen entrepreneurs in the eastern part of the country, a zone underlining the region as “Asean’s sourcing and manufacturing excellence and subcontracting centre”, and be a step towards a Thai industry transition to the future, which is aligned with the strategy to transform the country into a new economy.

The event is targeted to match over 600 businesses and to generate over 2 billion baht in business value.

Mr Narit Therdsteerasukdi, BOI Secretary-General, said that the BOI, in collaboration with SUBCON and Informa Markets — a world-leading international exhibitions organiser — is organising MIRA (Maintenance, Industrial Robotics and Automation) and SUBCON EEC 2023 for the second consecutive year.

The event is a comprehensive trade and service exhibition and industrial solutions event held in the Eastern Economic Corridor (EEC) comprising leading brands who work in the Maintenance, Industrial Robotics, Automation, and Subcontracting sectors.

(Photo: EEC Facebook fanpage)

The event will also display industrial parts and the most comprehensive business matching forum in the eastern region being built to support the Thai manufacturing and service sectors to be ready for their transition into future industries, in particular industries that are key to the eastern region’s wealth, such as electric vehicles, electronics, and intelligent manufacturing systems, he said.

More than 150 companies will participate in the exhibition, and the event is expected to also draw in over 100 large buyers and achieve 600 pairs of business matchings. The event is also expected to draw in around 5,000 visitors, he said.

“The BOI foresees that the support of domestic subcontracting producers entering into the global supply chain is a key strategy to promote Thai entrepreneurs to global markets, especially for Thai SMEs that execute with quality and in accordance with international standards in new industries such as electric vehicles (EV), electronics, automation, and robotics.

The BOI has continuously joined forces with such alliances to organise activities that link each industry in the EEC area for the second consecutive year, seeing the zone as the main industrial area of the country.

“This event will increase opportunities for Thai entrepreneurs to co-operate with leading foreign companies in sourcing, technology transfer, and subcontracting, as well as to create joint ventures between Thai and foreign countries, thus strengthening the supply chain of the targeted industries,” Mr Narit said.

Mr Kiattisak Jirakajonvong, President of SUBCON, said that following many investment projects in the EEC area, this is an important opportunity for Thai entrepreneurs to connect with foreign business partners and new investors in the targeted industries.

Home to over 400 members in the international trade arena, the Thai SUBCON association is ready to be a bridge that connects Thai entrepreneurs by helping them participate in important international exhibitions to create new trade opportunities, he said.

(Photo: EEC Facebook fanpage)

“We have also been a part of the SUBCON Thailand event that has been held continuously for more than 17 years and became a part of the SUBCON EEC for the first time last year. The event received a very good response from our members, as more than 90% of our members agreed to join the event again this year.

“This is a guarantee of confidence in doing business with suppliers and Thai partners. The association is confident that organising SUBCON EEC 2023 will be another way to create new opportunities for Thai entrepreneurs to move further toward the transitional industries, in particular, the targeted industries which will be key to upgrading the EEC to become the economic centre of the region,” he said.

Mr Sanchai Noombunnam, General Manager of Informa Markets, said that since Informa Markets has been working with the BOI and receiving great support from various alliances such as SUBCON, Informa foresees an opportunity to further expand the achievement of SUBCON Thailand — which is normally held in Bangkok — to a new important economic area such as the EEC.

He said Informa Markets initiated organising MIRA and SUBCON EEC in the past year to create an opportunity for entrepreneurs in the area to meet with large manufacturers who have high purchasing power to invest in the area, as well as to bring technology and innovation that corresponds to the industry of leading manufacturers to the exhibition.

The event is also happening to promote knowledge exchanges, such as in the field of electric vehicles, electric appliances, and mechanical and future industries as well, namely aircraft maintenance, medical equipment, robotics, and automation.

The previous event had been well received and was considered a great success, he said.

“This time, Informa Markets is ready to again organise MIRA and SUBCON EEC 2023 for the second year. There will be opportunities to witness modern technology and innovation in industrial maintenance and automation, including the advanced robotic system that today has become an important component of the Thai manufacturing sector,” he said.

At the same time, system integrator service providers from Thailand and Japan have also been invited to share their experiences and exchange information.

Last but not least, an important highlight that is regarded as the strength of the SUBCON EEC event is the business matching forum organised by BOI.

Moreover, what can’t be missed is a seminar giving an update on trends and new knowledge in the industry from experts sharing their direct experiences through various topics, all with the aim to connect major buyers from around the world, he said.


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