Singapore has been ranked third out of 30 economies for the sustainability of its global trade practices, up two places from fifth in the same study conducted last year by Asia-based philanthropy Hinrich Foundation and Swiss academic institution IMD.
The study, known as the Hinrich-IMD Sustainable Trade Index (STI), found that Singapore ranked first place in its economic pillar, fifth for the environmental pillar and eighth for societal, bringing its overall score to 94.1.
The Hinrich-IMD STI, launched on Oct 24, measures 30 economies’ readiness and capacity to participate in the global trading system in a way that supports the long-term goals of economic growth, environmental protection, and societal development.
This year’s edition is outlined by a key shift in a post-pandemic world marred by geopolitical turmoil: towards the so-called “slowbalization”, according to the study. This refers to the slowdown in trade reform and weakening political and policy support for measures that open trade amid rising geopolitical tensions.
The STI finds that the world’s largest economies, which should be leading efforts to reverse “slowbalization”, are instead among the key countries that are raising tariffs, non-tariff barriers, and slowing trade liberalisation. This has posed challenges to how states can properly use trade to manage and promote their economic, societal, and environmental sustainability.
Of the 30 major trading economies studied by the STI 2023, the two that excelled in achieving such a balance were, for the second year in a row, New Zealand, and the UK. Meanwhile, Singapore jumped from 5th to 3rd place, and Japan dropped four positions, from 4th to 8th place.
See also: CPTPP gains momentum as Malaysia turns member
The STI notes that high-ranking economies mostly shared the same traits: under the economic pillar, those with robust infrastructure and a strong inclination towards technological innovation stand out.
In the societal pillar, the index rewards economies characterised by political stability, economic equality, high educational attainment, and social mobility. In the environmental pillar, the top ranks are occupied by economies that uphold high environmental standards and effectively address challenges related to wastewater, air pollution, carbon, and energy intensity.
Professor Arturo Bris, director of IMD’s world competitiveness centre, says: “Economies that balance trade and sustainability well tend to be the more developed ones, in which the cost of making trade more aligned to the Sustainable Development Goals is lower.”
See also: The inflationary consequences of deglobalisation
But Kathryn Dioth, CEO of the Hinrich Foundation points out a worrying trend of an increasing number of protectionist trade policies being implemented in recent times. She notes that these are put in place under the guise of responding to the headwinds of post-pandemic inflation and geopolitical tensions.
“And while global trade continues to expand in value, that is mainly due to higher commodity prices. The global trade system is experiencing fragmentation that threatens to erode the achievements of 70 years of globalisation,” she warns.
“With global trade challenged by geopolitical and health issues, the work of streamlining supply chains and reducing costs has become paramount, even at the expense of social or environmental considerations in global trade. Our index sheds light on how this trade-off is being played out,” explains Bris.
