Business

Qatar crisis unlikely to hurt S'pore businesses

Trade boycott of Qatar to have little effect on S'pore, unless other nations join

The diplomatic crisis between Qatar and its neighbours is unlikely to have much effect on Singapore businesses. The tiny Middle East country is not a major trading partner, while its port is expected to carry on with operations as normal.

The biggest risk comes from the trade boycott of Qatar launched by fellow Gulf Cooperation Council (GCC) members Saudi Arabia, Bahrain and the United Arab Emirates (UAE).

While this is unlikely to significantly affect Singapore businesses exporting or importing from Qatar, the situation could deteriorate if other nations, such as Egypt, join the boycott.

Singapore businesses may then need to re-route goods and passenger travel through Kuwait or Oman, Singapore Business Federation chief executive officer Ho Meng Kit told The Straits Times yesterday.

Kuwait and Oman are the two remaining members in the GCC that still have ties to Qatar.

Most of the Singapore business community serving the Middle East is based in the UAE.
Direct flights to and from Doha have been suspended by UAE-based airlines such as Dubai's Emirates and Abu Dhabi's Etihad Airways.

Qatar Airways has in turn suspended flights to Saudi Arabia, the UAE, Egypt and Bahrain.

Both moves will likely inconvenience Singapore companies headquartered in the UAE for their Qatar subsidiaries, Mr Ho added.

MONITORING

Keppel Group, which operates a waste management plant, a sewage treatment plant and a shipyard in Qatar, said they are "proceeding as normal" and "monitoring the developments closely".

Keppel has 1,800 workers in Qatar, including 40 Singaporeans and Singapore permanent residents.

Singapore has a free-trade agreement with the GCC. It is the Republic's fourth-largest trading partner after China, Malaysia and the European Union, accounting for 8.9 per cent of its total trade.

Singapore's exports to Qatar are less than 0.1 per cent of total domestic shipments, although oil imports from Qatar comprise about 5.5 per cent of total oil imports here.

If there are disruptions, Singapore can readily secure supplies from other oil-producing countries, Maybank Kim Eng economist Chua Hak Bin said.

Saudi Arabia accounts for 11.3 per cent of the Republic's oil imports and the UAE supplies 10.9 per cent.

Liquefied natural gas (LNG) supplies are another concern as Qatar supplies about a third of the global total production.

Said OCBC Bank economist Selena Ling: "Fortunately, the LNG market is well-supplied.

"Singapore also imports natural gas from diverse sources - Indonesia, Malaysia, US, Australia, Norway, Russia and Brunei."

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