Written reply to PQ on Ukraine Crisis

Question

Mr Zhulkarnain Abdul Rahim: To ask the Minister for Trade and Industry in view of the escalation of tension and the situation in Ukraine and the neighbouring regions (a) what is the potential impact on Singapore’s investments in Ukraine and the region; and (b) what are the measures taken to alleviate the impact of any potential disruption to essential supplies from the region due to the situation.

Written Answer by Minister for Trade and Industry Gan Kim Yong

1. The Government is closely monitoring the rapidly evolving situation in Ukraine. The immediate and direct impact on our economy and firms has been manageable, for now. Singapore companies have a limited presence in Ukraine, and we do not import many essential supplies from Ukraine and the region.

2. However, the longer-term and indirect impact of the Ukraine conflict on Singapore will be significant. One key area we will be significantly impacted by is energy cost, as we import most of our energy needs. We have already seen a spike in the global prices of oil and natural gas, which Russia is a major exporter of.  The crisis will also further strain global supply chains, as Russia and Ukraine are major exporters of commodities such as wheat, and metals like nickel and palladium. Supply disruptions for these commodities will raise the prices of goods that use these commodities as intermediate input. For example, a global disruption in the supply of nickel could affect the production of stainless steel, which is used in the manufacturing and construction sectors. Disruptions to palladium supply will affect the semiconductor industry, and consequently the wider technology goods market. We are working with our key companies to review their business continuity plans, to minimise disruptions to their business operations.

3. Singapore has adopted a multi-pronged strategy to manage supply chain risks, especially for essential goods, which we had enhanced during the COVID-19 pandemic. This includes diversifying our imports, stockpiling and producing locally where viable, as well as working with major importers and retailers to ramp up supply from alternative sources if necessary. Support measures have been announced at the Budget to help our businesses and households. We will continue to monitor the situation closely and if necessary, introduce additional measures to help them cope with the challenges.