entrepôt Singapore’s foreign trade in the 19th century can be divided into three categories. Firstly, there was international trade which involved the import of commodities for local consumption (such as rice and cotton piece goods) and the export of domestic produce (such as gambier and sugar). Secondly, there was the transshipment trade which included the transfer of goods from one ship to another while in transit. Thirdly, and most importantly, was entrepôt trade, the international distribution of imported manufactures, foodstuffs and ‘Straits produce’— the name given collectively to the produce of the Malay archipelago. These imports were subsequently re- exported after processing, grading, packaging, other services and profit mark- up. Thus, the export value of these commodities was always greater than their import value due to the value- added services performed in the colony. Since Singapore had no significant agriculture or industrial exports of its own, it had to finance its consumption of imported goods through the profits made from entrepôt trade.

There were several reasons why Singapore was popular as an entrepôt. One was the free- port status that had been offered in Singapore since the settlement was founded in 1819. Ships were exempted from the payment of import and export duties, tonnage and port dues, wharfage and anchorage dues, port clearance fees and stamp duties. This proved attractive to Chinese merchants, who had been paying high duties in Dutch- controlled ports. In fact, this status was fiercely guarded by the merchant community, as evidenced by the failure of the Calcutta government in the 1850s to impose port charges in Singapore to subsidize the cost of new shipping facilities. Although some have argued that the trade of the colony was not completely ‘free’ because taxes were still levied on goods such as opium, toddy and petroleum, taxes were only imposed on consumption and not re- export, thus keeping the entrepôt free. In this way, both Western and Asian goods could be collected and exchanged without taxes being paid.

Another reason for Singapore’s success as an entrepôt was its strategic location. Situated at the southern end of the Malay Peninsula, the port attracted traders from Southeast Asia, China, India and Europe. Singapore was also easily accessible to small boats from Siam (present- day Thailand), the Dutch East Indies (present- day Indonesia) and elsewhere in the region. With the advent of steamships and the opening of the Suez Canal in 1869, Singapore became the port of call for both sailing ships and steamships.

The seasonal trade winds brought traders from various countries to the settlement and then back again, particularly during two main trading periods— the junk season and the Bugis season. The junk season, which brought junks from China, Cochin China (now northern Vietnam) and Siam, was regulated by the northeast monsoon in November. With the help of the southwest monsoon in April, these traders departed for home. The Bugis season saw the entrance of traders from the Celebes, Bali, southern Borneo and other ports south of the equator. They normally reached Singapore in September or October, leaving again in November with the onset of the northeast monsoon. Thus, Singapore became a market place in which goods from all over the world could be exchanged.

Singapore’s position as an entrepôt was further enhanced by the additional services it provided to traders. In May 1848, New Harbour (present- day Keppel Harbour) was established to cope with congested marine traffic at Boat Quay. Located west of the Singapore River, this new harbour had deep water close to the shore, and provided safe anchorage to large vessels, square riggers and steamers which were becoming a frequent sight in Singapore, especially after the 1840s. After congested marine traffic was diverted away from Boat Quay, the smaller coasting vessels, dominated by the Chinese, could continue to use roads and the river for intra- Asia trade. In addition, docking facilities sprang up with the opening of New Harbour. Wharves and coal sheds were built. Ship- repairing facilities were provided by companies such as the Tanjong Pagar Dock Company (1864). With the opening of the Suez Canal in 1869, Singapore became a coal depot, for the new route could only be navigated by steamships; and so the island acquired a new strategic and economic significance in the trade between Europe and the Pacific.

Singapore also ensured that it set up a network of communications that could access trading information all over the world. In December 1870, the Singapore– Madras submarine cable was laid, placing the colony in direct communication with India, Europe and North America. From Singapore, the line branched off to Java, Australia and China.

Another attraction of Singapore was the creation of special services to meet the new demands of trade. In conjunction with the development of tin as the most important single commodity in the colony’s entrepôt trade, smelting facilities were offered by the Straits Trading Company (1887) on Pulau Brani, off Singapore. As a result, Singapore became the largest centre of tin smelting in the world.

The success of Singapore as an entrepôt can be attributed to many factors. However, only one— a strategic location— was permanent, while others were government policies and initiatives taken by private companies.

The first container terminal was built by the Port of Singapore Authority in 1966. This signalled the beginning of the growth of the container industry in Singapore. By the 1980s, Singapore had become the world’s third- largest petroleum- refining centre as well as the third- largest oil- trading centre, serving the needs of oil- rich Indonesia and Malaysia. By 1988, it had overtaken Rotterdam to become the world’s busiest port in terms of tonnage.

In 2000, however, Singapore faced new challenges posed by the opening of the Port of Tanjung Pelepas in the Malaysian state of Johor. This new port became a strong contender for Singapore’s entrepôt trade and the patronage of international shipping lines, offering modern port facilities, information technology infrastructure and a free- port status.

Singapore’s role as an entrepôt has continued to drive economic growth. Singapore re- exports approximately half of what it imports. In 2004, imports were more than $293 billion while re- exports totalled $144.4 billion. Although oil continues to be an important re- export product, its contribution at $3.4 billion is significantly smaller than the re- export of non- oil goods such as machinery, transport equipment and electrical and electronic products, which contributed $276.8 billion.

Photo credit: John Falconer