Singapore can provide and flourish in a fragmented global economy

While much of the world is recalibrating in the face of US President Donald Trump’s renewed assault on globalisation, Singapore is making a different kind of move. Where others are scrambling to shield themselves from policy shocks, the Republic is actively using the disruption to reinforce its credentials as one of the few reliable safe havens in a fragmented economic order.

Morgan Stanley’s latest “Singapore At 60: Unlocking Wealth Creation” report doesn’t read like a mere birthday tribute. It is a thesis for capital allocation, arguing that Singapore offers rare visibility on growth potential, political stability, and governance quality. Derrick Kam, the bank’s Asia economist, frames it in terms of adaptation discipline—Singapore’s ability to spot macro shifts early, navigate through them, and position ahead of the curve. This isn’t about weathering storms. It’s about steering toward the most navigable waters before others even see the change in tide.

The backdrop is unambiguous. Globalisation’s political consensus is fraying, and tariff reciprocity—reintroduced to the geopolitical stage via Trump’s April 2 policy—is injecting uncertainty into global trade routes. In this climate, a market that can still present predictable policymaking, targeted growth strategies, and credible execution attracts a disproportionate share of long-term capital. That is the gap Singapore is leaning into.

Over the past decade, the Republic has systematically reinforced its hub economy architecture. Financial markets reforms, energy trading expansion, and digital infrastructure upgrades are not piecemeal initiatives—they are parallel investments in resilience and relevance. The MAS-backed Equities Market Review Group has already put $5 billion into an Equity Market Development Programme aimed at lifting returns on equity and doubling stock market capitalisation by 2030. In a region where capital markets are often deep but fragmented, such reforms create a singular point of liquidity that institutional investors can treat as a gateway.

The energy and carbon trading push is another strategic lever. Already a key node in the global commodities chain—hosting 400 traders and handling 20 per cent of the world’s energy and metals trade—Singapore is positioning to capture value in the carbon credit ecosystem. The Economic Development Board projects carbon trading could contribute US$5.6 billion in gross value by 2050, a figure that speaks less to short-term revenue and more to locking in future relevance in a decarbonising world economy.

Currency markets remain another underappreciated pillar. Singapore is the third-largest FX hub globally, behind only London and New York, with nearly US$1 trillion traded daily. As Asian currencies expand their share of global turnover, the city-state’s infrastructure and legal clarity make it a natural settlement and trading hub. This is not a claim to unseat established leaders—it is a calculation to increase indispensability in a shifting reserve currency mix.

Tourism and transport are being treated with the same long-range logic. Changi Airport’s $3 billion service upgrade plan, Terminal 5 construction, and a tourism strategy aiming for $50 billion in receipts by 2040 are not short-term demand plays—they are capacity bets in anticipation of a more multipolar travel market. By expanding now, Singapore positions itself to capture routes and flows that may permanently bypass less reliable hubs.

Perhaps the most forward-loaded element of the strategy lies in data and AI. In a region competing for hyperscale infrastructure, Singapore’s connectivity advantage—26 subsea cables and planned domestic broadband upgrades to 10 Gbps—has put it in the investment shortlist for AWS, Microsoft, and GDS. AI adoption, according to Morgan Stanley, could sustain medium-term GDP growth at around 3 per cent, an enviable rate for a mature economy. This is growth not from demographic expansion, but from productivity gains—a far rarer and more defensible driver.

None of this is to say the trajectory is risk-free. Ageing demographics, exposure to external demand cycles, and the potential concentration risk of over-relying on hub status are legitimate concerns. Yet Singapore’s policy posture—exemplified by the formation of the Economic Resilience Taskforce within days of Trump’s tariff announcement and the launch of the Economic Strategy Review with broad public-private participation—suggests that it treats risk as a constant, not a surprise.

The ESR’s five committees will produce recommendations by mid-2026, but their mandate—ensuring the Republic thrives in the new global landscape—signals that policy recalibration is not reactive firefighting but structured anticipation. The approach mirrors the playbook used during the Asian Financial Crisis and Covid-19 downturn: act early, convene expertise, and implement with speed.

In an era where many economies are forced into defensive crouches, Singapore is effectively using volatility as a catalyst to upgrade its economic chassis. It is telling that Morgan Stanley’s projection of household net assets doubling to US$4 trillion by 2030 is not based on speculative financial engineering, but on incremental reinforcement of structural advantages already in play.

Singapore’s safe haven status is not an accident of geography—it is a product of sustained policy agility, disciplined capital allocation, and sectoral foresight. In a multipolar world where policy shocks are the norm, the Republic’s strategy shows that the real safe haven is not just where capital parks during crises, but where it compounds through them.