Singapore's sand shortage: the hourglass effect

My piece from this week's edition of The Economist:

Seven maids with seven mops might fail, but Singapore gets close

“LOOKING for sea-sand for reclamation project in Singapore. Prompt reply is greatly appreciated.” Many such pleas can be found on Alibaba.com, a popular Chinese trading-website. Malaysia banned sand exports as long ago as 1997. Indonesia followed suit in 2007 on environmental and, some say, political grounds. Ever since, it has become harder for Singapore to secure supplies for its booming construction industry and sea-fill plans.

The ban by Indonesia, its biggest supplier, led to a surge in the price of sand, used in both concrete and land-reclamation. The government averted a short-term crisis by releasing sand from its stockpile and helping contractors find new sources. However, Indonesia’s embargo, followed swiftly by a Chinese ban on sales of sand to Taiwan, set in train a domino effect.

Environmentalists argue that large-scale sand-dredging can deplete fish stocks and cause erosion, risking landslides and flooding. So Singaporean contractors turned to Cambodia, where prices are low and environmental standards almost non-existent. But this May Hun Sen, Cambodia’s prime minister, outlawed exports of sand. Again, environmental pressures were cited, but there may also have been a political motive.

After the Cambodian ban Vietnam’s sand exports surged, achieving volumes seven times as big as last year, with Singapore the main customer. Then last month Vietnam’s construction ministry called for a temporary halt to the trade, to assess its impact on the environment and the local building industry. NGOs in Thailand and Bangladesh have also pressed their governments to reject recent requests to allow sales of sand to Singapore.
 
Sand prices, which peaked at over S$60 ($43) a tonne in 2007, have fallen during the slowdown. Simon Lee, of the Singapore Contractors’ Association, believes a new regulation requiring sand importers to have alternative back-up supplies will help insulate his members from further turbulence.

A spokesman for Singapore’s national-development ministry adds that construction companies have been importing sand from “various” regional countries and claims that “recent restrictions on sand exports have not affected the supply of construction sand to Singapore.”

But global demand for dwindling supplies of sand and other materials is mounting. Critics say that Singapore needs to shift faster from building cheap but resource-intensive concrete structures towards more expensive construction techniques that use, say, more steel and glass.

Relying as it does on low-wage, low-skilled migrant workers from South Asia, Singapore’s construction industry is not yet ready for such a high-tech transformation.

And in the short term there are still plenty of willing suppliers. Tim Sintop, an American whose trading company wants to export sand from Myanmar and has already secured several contracts in Singapore, is upbeat: “The more bans there are elsewhere, the better for us.”