Vietnam- Singapore Strategic Partnership Expected to Further Bolster Strong Ties

“The Strategic Partnership also builds on the growing political and security cooperation between the two countries both bilaterally and multilaterally. This includes the promotion of good governance, exchanges in the fields of education and health, culture, arts and sports. The Strategic Partnership will also list out ways to further strengthen our close collaboration in ASEAN and other international fora,” said Mr Ng Teck Hean, Singapore Ambassador to Vietnam in an interview with Vietnam Business Forum. Nam Pham reports.

 

 

 

The diplomatic relations between Singapore and Vietnam have indeed come a long way over the last 40 years. Our bilateral relationship today is characterised by mutual trust and cooperation, as evinced by the frequent exchanges of visits between the leaders of the two countries, as well as the close political cooperation between the two countries both bilaterally and at multilateral fora. The visit by General Secretary of the Communist Party of Vietnam Nguyen Phu Trong to Singapore in September last year and the upcoming visit by Prime Minister Lee Hsien Loong to Vietnam this year are testament to the warm and friendly ties between the two countries. 

 

Apart from regular high-level bilateral exchanges, our relations are underpinned by strong economic, investment and trade linkages. The development of the Vietnam-Singapore Industrial Park (VSIP) in a way epitomises the success of the economic cooperation as well as the fast-growing ties between the two countries. In less than two decades, the VSIP has expanded from one to five locations, in the northern, central and southern regions of Vietnam – in Binh Duong, Hai Phong, Bac Ninh and Quang Ngai. I am proud to say that the VSIPs have now become a tangible symbol of our bilateral economic cooperation, and a number of provinces where VSIPs are located have done well in terms of economic growth and attraction of foreign direct investments. 

 

We will commemorate the 40th Anniversary of the establishment of diplomatic relations between the two countries with an elevation of bilateral relations to a Strategic Partnership. This will be formalised during my Prime Minister’s visit to Vietnam later this year. The Vietnam-Singapore Business Forum (VSBF) 2013, jointly organized by the Vietnam Chambers of Commerce and Industry and the Singapore Business Federation from 17 to 19 April 2013 in Ho Chi Minh City, is a timely platform to explore further business opportunities between the two countries. The Singapore Embassy in Hanoi will continue to facilitate such events in the future as part of our efforts to promote business networking and people-to-people exchanges.

 

The Strategic Partnership agreement is a milestone document which consolidates the 40 years of bilateral relations, and at the same time, sets the future direction of our close relationship. The document sets out how both countries can strengthen economic cooperation, including in key sectors such as Finance, Information and Communications Technology, Education and Training, Investment, Transportation and Trade and Services.

The Strategic Partnership also builds on the growing political and security cooperation between the two countries both bilaterally and multilaterally. This includes the promotion of good governance, exchanges in the fields of education and health, culture, arts and sports. The Strategic Partnership will also list out ways to further strengthen our close collaboration in ASEAN and other international fora. 

The Strategic Partnership will serve as a guide to further bolster the strong ties between Singapore and Vietnam.

 

ASEAN Member States (AMS) are working towards realising the ASEAN Economic Community (AEC) by 2015.  The AEC seeks to achieve deeper economic integration within ASEAN as well as for ASEAN to integrate into the global economy.  It is an endeavour that requires AMS to work together in partnership and common purpose to achieve its realisation.  This is not easy as individual AMS have different economic priorities and constraints.  However, we all strive to find common ground and move forward together.  The strong bilateral relations between Vietnam and Singapore, as well with the other AMS, will contribute to this process as we are able to have open discussions about our priorities, challenges faced, and the way forward, which are essential to reach a consensus acceptable for all AMS.

 

How would you characterise the current status of Vietnam – Singapore economic relations, and where do you see it heading over the next two to three years?

 

Singapore companies have a long history of investing and doing business in Vietnam, often taking a long term view of the market. As I have mentioned earlier, the first VSIP in Binh Duong is a successful partnership between Sembcorp and Becamex IDC Corporation, which has been replicated in four other locations across Vietnam.  Despite the global economic uncertainties, sentiments among Singapore companies towards Vietnam remain strong. Bilateral trade between both countries grew from S$3.4 billion in 2000 to S$15.8 billion in 2012.  In the first quarter of 2013, Singapore was the second-largest foreign investor in Vietnam, bringing in newly registered capital of S$606.07 million. Vietnam’s proximity to Singapore, its 46 million-strong workforce and progress towards a market economy are factors that will continue to encourage Singapore companies to invest here. 

 

What are the specific economic sectors that Singapore will focus on to develop with Vietnam over the longer term?

 

As Vietnam continues to undertake measures to liberalise and develop its economy, there will be growing demand for quality products and services among its growing middle class. In particular, there will be strong demand for modern services such as finance, logistics, info-communication, telecommunications, education, healthcare, retail, hospitality and tourism services. Rising disposable incomes and growing consumer brand awareness also offer promising prospects for Vietnam’s consumer sector.  Many Singapore companies have expertise in these fields and experience in operating in this region, and will be able to value-add and contribute to the growth of Vietnam’s economy. There are potential synergies to be unlocked through collaborations with Singapore companies experienced in international trade, branding and selling to overseas markets.

 

With the populations of Vietnam’s three largest cities Hanoi, Ho Chi Minh City and Hai Phong expected to triple by 2020, we foresee an increase in the demand for urban solutions such as water and waste water management solutions. Singapore could share our development experience in urban solutions and work with local Vietnamese partners and authorities to overcome the challenges of urbanisation faced by the larger Vietnamese cities.  Vietnam could also leverage on Singapore’s geographic position as a major trade and finance hub to grow its trade and services sector. For example, Singapore companies can contribute to the upstream areas of food safety, quality management and R&D, and the downstream areas of supply chain, retail and distribution.

 

In 2013, what are some of the advantages that business-centric events such as VSBF and official bilateral meetings between Singapore and Vietnam could bring to businesses of both countries?

 

Events such as the VSBF provide the platform for Vietnam and Singapore businesses to network and explore potential partnership opportunities in various sectors including hospitality and tourism, manufacturing and logistics, and healthcare services.  The VSBF also allows Vietnam and Singapore business associations to work together to provide information on the investment climate and economic situation in their respective countries so as to reach out to potential investors and business communities from both countries.

 

Another important overarching platform for bilateral economic cooperation is the Singapore-Vietnam Connectivity Framework Agreement, which was established in 2005 to build on the strengths and competencies of both countries to accelerate mutual growth. Since its implementation, the Connectivity Framework has achieved good progress in facilitating several significant investment projects by Singapore companies into Vietnam. The Connectivity Framework will continue to strengthen bilateral trade and investment linkages between Vietnam and Singapore.

Are there plans for such bilateral business fora to be held in Singapore and if so, what type of companies from Vietnam would you hope to see participate?

 

We welcome collaborations between the business chambers and associations from Vietnam with their counterparts in Singapore to hold events such as the VSBF in Singapore. International Enterprise Singapore (IE-Singapore), as the Singapore government agency promoting the internationalisation efforts of Singapore companies, will continue to work with its Vietnamese counterparts to hold information sessions and business forums on business opportunities in Vietnam.

 

Given the rapid urbanisation and the growth of the Vietnamese middle class, Singapore companies would be keen to explore collaborations with Vietnamese companies in a broad range of sectors including urban solutions, consumer-related retail and food services, food processing and hospitality industries. With Vietnam’s strength in agriculture and fisheries, there is certainly room to explore business partnerships in areas such as food sourcing, food manufacturing and food distribution. Tourism and hospitality also play a key role in Vietnam’s economy, and Singapore companies are keen to partner their Vietnamese counterparts in areas such as master planning, hospitality management and training. The Embassy is happy to work with the relevant partners to facilitate such win-win collaborative efforts.