Good Prospects for Vietnam-Singapore Trade Relations

According to the Singapore-based Vietnamese trade mission, on November 17, 2005, Singapore’s major export turnover was down for the first time in three years. This has resulted in an increased worry about the country’s dependence on international trade and a possible recession if its export turnover continues to fall. However, the Vietnam-Singapore trade relations still have a good prospect after the Vietnamese Ministry of Trade said that two-way trade exchange turnover between Vietnam and Singapore in nine months of 2005 reached over SGD 7.479 million.

 

With 32 years of diplomatic ties, Vietnam and Singapore have boosted their trade relations, which can be seen via an increase in the two countries’ increased trade exchange value. According to the Ministry of Trade, Singapore is the second largest trade partner of Vietnam, behind the US, with their two-way trade value reaching over SDG 7.479 billion in the first nine months of 2005, up by 34 per cent against the same period last year. The figure was equal to 1.57 per cent of Singapore import and export turnover in the first nine months. Of the figure, SDG 2.165 billion went to Vietnam’s export value, up by 28 per cent over that of one year ago and equal to 0.95 per cent of Singapore’s total import turnover in nine months and the remaining SGD 5.314 million went to Vietnam’s import, increasing by 37.4% per cent against the same period of 2004 and accounting for 2.19 per cent of Singapore’s export turnover.

 

Export value of 20 major export items of Vietnam, including crude oil, footwear, fresh fish, electronic accessories and woodworks, to Singapore was put at around SGD 2.005 million, up by 32.1 per cent against the same period of 2004 and equal to 92.63 per cent of Vietnam’s total export turnover to Singapore in nine months of 2005. At the same time, the import turnover of Vietnam’s 20 major items from Singapore stood at SGD 4.105 million, up by 48.4 per cent against the same period of 2004 and equal to 77.26 per cent of Vietnam’s total import value from Singapore.

 

In October 2005, Vietnam’s export turnover was estimated at US$2.85 billion, increasing by 4.5 per cent over September 2005, bringing the country’s total export value in the first ten months of 2005 to US$26.447 billion, or an increase of 21.9 per cent against the same period of 2004. Vietnam’s export value, including that of crude oil and coal, increased by 21.9 per cent, or US$4.754 billion. The figure without turnover of crude oil and coal rose by 17.7 per cent, or US$2.969 billion against that of the same period of 2004. According to economic experts, foreign direct investment (FDI) enterprises, including those from Singapore, made a significant contribution to the growth rate.

 

Officials from the Singaporean Government said that Vietnam was developing with its own strength. However, if the country co-operates with Singapore, Vietnam will be able to promote its development. In a long run, it is a situation of mutual benefit as Singapore has seen great benefits from developing its co-operative relations with a developed Vietnam. At present, Singapore and Vietnam are major trade partners. Vietnam exports rice, coffee, seafood, rubber, crude oil and some light industry’s products to Singapore, and import from Singapore hi-tech machines and equipment, petrol and petrochemical products, and chemicals. The two countries’ trade exchange value has seen a high year-on-year increase, reaching US$2 billion per year on average. According to the statistics by the Vietnamese Ministry of Trade, Vietnam’s import and export turnover with Singapore increased from US$1.224 million in 1992 to US$3.5 billion in 2001, of which Vietnam’s export turnover was put at US$961 million and import value, US$2.534 million. With its great economic potential and purchasing power, as a major trade centre in the region, Singapore has attracted a lot of attention from Vietnamese enterprises, which have set up representative offices to tap the market’s potential.

 

Luong Van Tu, deputy minister of trade, said that Singapore was the largest market of Vietnam in ASEAN, in particular in imports, Vietnam had taken advantage of close relations with Singapore although its transportation infrastructure facilities remained underdeveloped.