Int'l Cooperation

Last updated: Thursday, February 21, 2019


Leapfrog in Vietnam-Singapore Economic Cooperation

Posted: Monday, August 06, 2018

Vietnam - Singapore Industrial Park (VSIP) is a symbol of Singapore's investment efficiency
Vietnam - Singapore Industrial Park (VSIP) is a symbol of Singapore's investment efficiency

Singapore has achieved spectacular growth for more than 50 years. From a country formed in 1965 at the back of its separation from Malaysia and resided by immigrants, small merchants, prisoners and businessmen severely affected by economic and racial conflicts, Singapore has transformed itself into a country with the highest GDP per capita in the world. People live in a clean and green city.

Singapore economic model: Valuable lessons for Vietnam
Singapore is a small island state in Southeast Asia. Lying between Malaysia and Indonesia, Singapore has a population of 5.5 million and a land area of about 700 square kilometres. The nation has almost no natural resources while key commodities such as foods, foodstuffs, freshwater and raw materials are imported for domestic consumption and production.

However, the Lion City has risen to become the most competitive economy in the world for years. This assessment was made by the World Bank (WB) in cooperation with the International Finance Corporation (IFC) after analysing some key elements such as the time to start a business, the time of paying tax and the volume of exports and imports. Singapore's per capita income rose sharply from US$435 in 1959 to US$12,700 in 1990 and US$90,531 in 2017, ranked third in the world.

Singapore's gross domestic product (GDP) comes from two major sectors: Industry and service. Major industrial products of Singapore are electronics, chemicals, oil refining and drilling equipment, processed rubber, rubber products, processed foodstuffs and beverages, ship repairing, construction, biotechnology. Its machinery, electronic and telecom components, pharmaceuticals, chemicals and refined petroleum products have been exported to many countries.

In addition, Singapore has built a very convenient infrastructure system, including seaports, inland waterways and ground traffics to compete with neighbouring countries in trade, export and import. The port city of Singapore is among the busiest places in the world, far above Hong Kong and Shanghai.

Singapore has a highly developed and successful free-market economy. Singaporeans enjoy a healthy, open economic environment. Remarkably, Singapore has been consistently rated among the least corrupt countries in the world. The latest report by Transparency International (TI) shows that Singapore scores 84 points, ranked sixth out of 180 countries in administrative transparency. In Asia - Pacific, Singapore is second only to New Zealand.

Singapore is standing among the world's cleanest and greenest nations by adopting a sound environmental management strategy with a tough and persistent attitude. Bright spots in this long-term strategy are invaluable experiences for countries that are determined to strive for sustainable development in a healthy environment.

Singapore is taking the lead in transiting to a knowledge-based economy, with the goal of becoming the world's leader by 2018.

Leapfrog in Vietnam-Singapore economic cooperation
After 45 years of diplomatic relations establishment (August 1, 1973 - 2018) and five years of strategic partnership (September 2013 - 2018), the relationship between Vietnam and Singapore has leaped in quantity and quality. Singapore is now a major trading partner of Vietnam in the world, only after China, Japan, the United States and South Korea and the largest trading partner of Vietnam in ASEAN.

The Vietnam Trade Office in Singapore said that the bilateral trade between Vietnam and Singapore is substantial. In 2017, the two-way trade value amounted at US$8.3 billion.

The two nations trade in petroleum, computers, electronic devices and components, ad telephones. Besides, Vietnam exports seafood, coffee, pepper and vegetables to Singapore but the market shares are small.
Singapore’s direct investment in Vietnam has increased steadily since 1998. By 2017, Singapore continued to be a major investor in Vietnam, ranked third in 126 countries and territories investing in Vietnam, with over 1,927 projects and nearly US$42 billion of investment capital. Singapore mainly invests in real estate, processing, manufacturing and construction in Vietnam.

Vietnam - Singapore Industrial Park (VSIP) is a symbol of Singapore's investment efficiency. Starting its operations 11 years ago, Singapore now has seven VSIPs: VSIP 1 and VSIP 2 in Binh Duong province, VSIP 3 in Bac Ninh province, VSIP 4 in Hai Phong City, VSIP 5 in Quang Nam province, VSIP 6 in Hai Duong province and VSIP 7 in Nghe An province. VSIP 8 is being built in Quang Tri province. In particular, Singapore's investment projects are operated effectively, deployed quickly.

Dr Vu Minh Khuong from National University of Singapore said, in 2018, Vietnam has three major challenges. First, in investment attraction and development, Vietnam still prefers giving incentive policies to making an effort to upgrade its excellence to create strategic appeals.

Second, Vietnam’s economy features good growth but weak resilience. In the midst of intensive integration, with a weak banking system, Vietnam is highly vulnerable if regional and world economies encounter shocks in the next few years.

He noted that although Vietnam's business environment has been impressively improved in 2016-2017, its financial credit ratings remain low and have not progressed much while that of the Philippines and Indonesia is at a much higher level.

Third, the strategic planning and enforcement coordination capacity of the Vietnamese Government is low.

In the past time, Vietnam has been quite good at addressing specific tasks but strategic planning and enforcement coordination for a big intention lack consideration. The weakness of its recent offshore fishing programme is a typical example. Outcomes are still limited despite big challenges, strong willpower and abundant resources.

In order to create growth momentum, Vietnam should learn Singapore's MPH (Mile Per Hour) model in an effort to accelerate its development. M is meritocracy; P is pragmatism and H is honesty.

With meritocracy, more and more talents will come, especially to undertake difficult tasks.

With pragmatism, Vietnam will no longer have unrealistic projects and each project will bring in practical effects that every citizen can feel totally convinced.

With honesty, Vietnam will eliminate all rules and practices that are now forcing good people to tell a lie.

For civil servants, wages are not the key factor but the motive force must be strong enough.

Quynh Chi

Other news

Vietnam Export Gateway
Sunny World Property Development Corporation
Tong cu DL