Singapore Keen to Further Partner with Vietnam

International Enterprise (IE) Singapore is a government agency under the Ministry of Trade and Industry, promoting international trade and acting as the lead agency that helps Singapore-based enterprises expand their business overseas. To learn about Vietnam- Singapore relations and IE Singapore’s activities in Vietnam, Vietnam Business Forum reporter Doan Tien interviewed MrRaymond Lui, the Centre Director (Hanoi) of IE Singapore and Second Secretary (Commercial) in the Embassy of the Republic of Singapore in Vietnam.

 

Singapore and Vietnam share a close and mutually beneficial relationship. There have been frequent high-level bilateral exchanges, including the visit of Prime Minister Lee Hsien Loong to Vietnam in January 2010 and President Nguyen Minh Triet’s State Visit to Singapore in November 2009. The economic relationship between the countries has steadily strengthened. In January 2010, the groundbreaking for the 4th Vietnam-Singapore Industrial Park (VSIP) in Hai Phong city was witnessed by PM Lee and PM Nguyen Tan Dung. More recently, on the sidelines of the 17th ASEAN Summit in Hanoi, PM Lee and PM Dung jointly witnessed the signing of four commercial agreements involving Singaporean investments in Vietnam.

 

The Singapore-Vietnam Connectivity Framework Agreement was established in December 2005 as an overarching platform for enhancing bilateral economic cooperation. This has achieved good progress in many sectors of cooperation, facilitated several significant projects by Singapore companies that contribute to Vietnam’s economic development, and expanded to encompass urban development and cruise tourism. At the 6th Singapore-Vietnam Connectivity Ministerial Meeting in Singapore on 26 November 2010, Singapore Minister for Trade and Industry Lim Hng Kiang and Vietnam Minister of Planning and Investment Vo Hong Phuc reaffirmed both countries’ commitment to strengthen economic relations and explore further economic cooperation opportunities. Singapore companies remain upbeat about Vietnam’s economic prospects and are keen to further partner with Vietnam. There are opportunities for economic collaboration in areas such as hospitality and tourism services, transport and logistics, infocomm technology, banking and finance, and more.

 

Bilateral relations have steadily expanded to also include defence cooperation as well cooperation in urban planning and human resource development. Increasingly, we are seeing more Vietnamese students coming to Singapore to study in Singapore's educational institutions. These people to people exchanges, and other cultural exchanges, will help further deepen bilateral ties.

 

Vietnam has served as an effective Chair of ASEAN in 2010. Under its stewardship, it has organised the key ASEAN ministerial and Summit meetings well, including the recent 17th ASEAN Summit and related summits in Hanoi. Over the year, Singapore has worked closely with Vietnam to contribute towards key deliverables on a range of issues including the evolving regional architecture and the adoption of the Master Plan on ASEAN Connectivity. This plan aims to enhance road, rail, air, sea, IT and people-to-people linkages within ASEAN, and between ASEAN and its dialogue partners. This plan will support ASEAN centrality by making ASEAN the hub of the region. Vietnam has also continued to urge progress on ASEAN's Community building process to create an ASEAN Community by 2015, as an integrated and more united ASEAN would be in a better position to drive the regional architecture. Not only has Vietnam been effective in its consultations with the ASEAN member states on various issues and developments of the day, it has shown to be a strong representative for ASEAN in its capacity as ASEAN Chair at international meetings such as the recent G20 Summit in Seoul. Vietnam's efforts have reinforced the reputation of Vietnam as a reliable and efficient member of ASEAN and are much appreciated by Singapore and other ASEAN partners.

 

IE Singapore is a government agency under the Ministry of Trade and Industry and the lead agency that helps Singapore-based enterprises expand their business overseas, as well as promoting international trade. In this regard, we actively assist Singapore companies to explore potential partnerships in Vietnam, invest and participate in Vietnam’s growth.

 

We will continue to help Singapore companies better understand Vietnam and encourage them to invest in the market. Some of the promotional activities that IE Singapore engages in include organising outreach seminars in Singapore and business missions to Vietnam. In 2010, we worked with various trade associations to organise and support over 20 business events in Vietnam and Singapore. Most of these were industry-specific, including sectors like food manufacturing, water treatment and infocomm technology. We saw strong participation in these activities, which reflects the strong interest of both Singapore and Vietnamese companies in partnering with each other.

 

Through our two overseas centres located in Hanoi and Ho Chi Minh City, we also help provide market information, facilitate projects for Singapore companies, as well as link them up with potential Vietnamese business partners.

 

In the long term, we hope to foster stronger economic relations through various business exchanges, and deepen collaboration in wide ranging sectors. Most importantly, through investments and other project cooperation in Vietnam, we hope that Singapore companies can share their experience, partake and add value to the needs of the market.

 

Our largest sector has been in urban and industrial development, such as industrial zones and townships, developments of residential and commercial properties and serviced apartments. As Vietnam develops, we are also keen to partner with each other in hospitality and tourism services, transport and logistics, infocomm technology (such as e-Government and financial services), engineering solutions for energy and water, as well as banking and finance.

 

One key area that Singapore can share is our public-private partnership model adopted in our development years. This approach has allowed Singapore companies to gain valuable experience and expertise in Singapore’s urban development, which has been shared with other markets around the world, including Vietnam.

 

In urban solutions, for example, Singapore took on a long-term integrated planning approach to manage competing land uses, taking into consideration economic needs and environmental sustainability to create commercially viable solutions. The private sector worked closely with the public sector to design, develop, implement and integrate the solutions that Singapore needed, such as in water and wastewater management, waste management, housing, transport and more. Singapore-based companies have since built a strong reputation and track record in providing such urban solutions to clients around the world. The companies’ experience in implementation and integration can help other countries in charting long term strategies for sustainable development. Examples of significant overseas projects include the Sino-Singapore Tianjin Eco-city in China, and the International Tech Park Bangalore in India.

 

In this aspect, Singapore has been sharing our development experience with Vietnam. Under the auspice of the Connectivity Framework, an Urban Development Training (UDT) programme has been put in place. The UDT allows Vietnamese leaders and officials to learn more about Singapore’s approach and experience in urban planning and development through visits to Singapore. IE Singapore has facilitated eight runs of the UDT programme since 2008, which has benefited about 120 officials from Vietnam.

The Vietnam market possesses tremendous potential, as can be seen through its strong growth.  It is one of Asia’s fastest growing economies with a young and industrious population of over 86 million. According to the World Bank, Vietnam registered real GDP growth of 5.3 percent in 2009, and enjoys growth of 6.78 percent in 2010.

 

As with many other markets, there will be challenges to overcome when expanding overseas. Some common challenges faced by Singapore companies in Vietnam include language barriers, differences in cultural and business practices, as well as complexities in the regulatory environment. On top of these, companies need to take into account factors such as risks and costs, and decide on the commercial viability of doing business in Vietnam.

 

It will take time to understand the market and it is key to do due diligence and weigh the odds before venturing into Vietnam. Companies could participate in market familiarisation trips to build up their business network and seek like-minded business partners to work together.

 

One way in which we help Singapore companies to become more familiar with Vietnam’s business environment is through our International Business Fellowship (iBF) programme. The iBF programme is a short-term market immersion programme to help Singapore-based companies train their company executives to acquire business knowledge and build networks in overseas markets. In 2010, IE Singapore conducted the iBF programme in May and September, where we brought 52 executives to Vietnam. The programme provided a comprehensive overview of Vietnam’s business systems, practices and business opportunities, as well as culture and human resource matters.