Vietnam, Singapore Working Closely together to Build on Existing Bilateral and Regional Cooperation

Since then, both countries have continued to work closely together to build on our existing bilateral and regional cooperation.  We have also continued our frequent exchange of visits by leaders and officials from both sides, and have further deepened people-to-people ties through the various technical assistance programmes, as well as scholarships offered by the Singapore Government. Singapore and Vietnam will continue to strengthen bilateral economic ties, as reaffirmed during the 10th Singapore-Vietnam Connectivity Ministerial Meeting which was held in Singapore in April 2014.  

However, we were deeply concerned during the recent outbreak of protests in Vietnam, especially with the violence and damage caused at the Vietnam-Singapore Industrial Parks (VSIPs) I and II in Binh Duong province.  We expressed our serious concerns over the violence as well as the burning of the Singapore flag by protesters, as our state flag is a sacred national symbol and should be treated with respect. 

The VSIPs are not just a flagship project between the governments of Singapore and Vietnam, but also strong evidence of Singapore’s belief in Vietnam’s economic potential, as well as our intentions to invest for the long-term.  Since the outbreak of the riots, the Vietnamese government has deployed more resources and implemented measures in order to regain investor confidence after the unrest.  We hope it will continue steps to restore investor confidence in Vietnam.  As a key investor in Vietnam and a Strategic Partner, we will continue to work with the Vietnamese authorities to facilitate investments into Vietnam and create the best conditions for our investors. 

Could you share some of the success stories and models from Singaporean businesses that Vietnamese businesses might learn from and apply to further develop their own projects?
Singapore businesses take a long term approach when investing abroad and look beyond the immediate challenges to assess the potential of the market in the long-run.  For example, our companies acknowledge Vietnam’s strong economic fundamentals, including a demographic advantage provided by its young and sizeable work force and rich endowment of natural resources.

Singapore companies such as Capitaland, Keppel Land, Mapletree, and Sembcorp have been operating in Vietnam for many years, and have created many jobs for locals and helped shape the urban and industrial landscape of Vietnam’s growing cities.  Our companies seek out win-win partnerships and strive to contribute to the local economy through job creation and sustainable development.

Today, Singapore is Vietnam’s third largest investor with over US$30 billion invested across more than 1,200 projects.  In particular, the VSIPs, a cornerstone of our bilateral economic relations, have created more than 140,000 jobs to date.  The strong VSIP brand name has been successful in attracting foreign investments to Vietnam and has served as a reassuring presence for many Singapore and foreign firms based in Vietnam.  To ensure that this continues, it is critical for the government to provide a stable investment climate and protection to foreign investments.

Vietnam is currently negotiating the Trans-Pacific Partnership (TPP). What are the related advantages and challenges for Vietnam?
The TPP will benefit businesses from all countries involved, including Vietnam. Businesses today increasingly operate across regional supply chains, in both the manufacturing and services industries. The TPP will push the boundaries to address both longer-standing and newer challenges that businesses face in trading and operating across borders.   For instance, the TPP goes beyond market access in goods to other areas such as services liberalisation, investment protection and regulatory improvement in technical barriers to trade and e-commerce.

The TPP will allow Vietnam to better integrate into regional value chains, allowing it to capture a larger portion of regional trade and investment flows. Vietnamese companies will be able to operate more effectively across the region, become more competitive and as a result, raise the competitiveness of the region as a whole.  The TPP will also unlock the potential of new markets for Vietnam’s key exports, including textiles and footwear, that still face certain barriers.  This is especially important since the TPP covers nearly 40 percent of global GDP and about one-third of international trade.  Overall, the TPP will promote growth and development for Vietnam, and bring about opportunities for the Vietnamese people.

These benefits can only be realised if all TPP countries, including Vietnam, make certain trade-offs.  For Vietnam, this could mean implementing certain reforms that better align its policies to further promote market liberalisation and integration into the global economy.  At this stage of the negotiations, TPP parties must also come together to strike meaningful compromises that deliver win-win packages for all, including in tough areas such as market access.

Singapore and Vietnam have cooperated on issues of common interests, and we look forward to further collaboration and working with regional countries to advance negotiations on the TPP. All TPP parties have their respective sensitivities. As we seek to move towards the conclusion of TPP negotiations, we hope that all TPP parties will also commit to working together to devise solutions to address these concerns.

Vietnam is in the process of restructuring the economy, covering multiple areas including administrative reform, public investment, banking and finance, manufacturing and service sectors across several economic regions. How would you characterize this process and what are some of the advantages that it will create for Singaporean businesses investing in Vietnam?
Vietnam has taken some steps towards restructuring its economy, including reforming the banking, real estate and state-owned sectors.  Such reforms, when implemented fully, will boost Vietnam’s competitiveness and further increase the attractiveness of Vietnam as an investment destination.  If Vietnam can successfully push through economic reforms in addition to maintaining stability following the recent unrest, this will be an added boost for Singapore companies keen to participate in a broad range of sectors, including the financial sector.  

Vietnam’s rapid urbanisation provides opportunities for Singapore companies in the engineering, construction, energy and utilities sectors.  Singapore companies are able to provide end-to-end urban solutions and project management expertise in areas ranging from townships and industrial parks to waste and water treatment.  Singapore industrial park players – Sembcorp, Ascendas, Mapletree – have established their long-standing presence in Vietnam. Vietnam’s 90 million strong population and rapidly growing middle class is also driving demand for new, modern food and retail concepts and Singapore companies can share our expertise in the consumer sector.  Vietnam’s large workforce and abundance of land also present opportunities for firms focusing on labour intensive and mid-tech sectors in manufacturing.  In addition, Vietnam’s strength in agriculture and fisheries, and the government’s commitment to developing this sector, could translate into potential partnerships in areas such as food sourcing, food manufacturing and food distribution.  

What do you think about the role of VSBF in fostering business relations between the two countries?
The VSBF is a platform for businessmen from Vietnam and Singapore to foster closer linkages and explore opportunities for collaboration.  It brings together the Singaporean and Vietnamese business communities by providing an avenue to candidly discuss both common challenges as well as areas of mutual interest. Our business groupings like Singapore Business Federation and economic agencies, including IE Singapore, facilitate investments from Singapore to Vietnam, and tap platforms such as the VSBF to meet with more Singaporean and Vietnamese companies to explore opportunities and forge closer business partnerships.