To mark Singapore’s National Day on August 9, the island state’s Ambassador to Vietnam Simon Wong offers VIR readers a unique snapshot of how Singaporean companies are prospering in Vietnam.
Vietnam and Singapore will be celebrating 40 years of bilateral relations next year, and I am very pleased to note that our relationship has never been stronger.
Trade and investment links between both countries are close and long-standing. In addition to being one of Vietnam’s main trading partners, Singapore was also the fourth largest foreign investor in Vietnam as of April 2012, with registered cumulative investments of US$23 billion in more than 1,000 projects. This would not have been possible without the strong support that the Vietnamese government has shown our companies over the years.
Vietnam’s attractiveness as an FDI destination
Vietnam is one of the main FDI destinations for Singapore companies for many reasons, such as its political stability, proximity to Singapore, and dynamic 46 million-strong workforce. Vietnam is also committed in its drive towards a market economy, as seen in their involvement in the Trans-Pacific Partnership (TPP) negotiations. While the country faces macroeconomic challenges, the Vietnamese Government has also taken firm and concrete steps to stabilise its economy.
Inflation rates have eased, while exchange rates and the budget deficit have shown signs of improvement. In this regard, our companies remain confident of Vietnam’s economic prospects, and will continue to invest in Vietnam based on their commercial calculations and as long as there are good returns.
Notable Singapore private sector initiatives in Vietnam include the development of the five Vietnam-Singapore Industrial Parks (VSIP) projects, Ascenda-Protrade Technology Park in Binh Duong, Port of Singapore (PSA)’s deep-sea container terminal in the Ba Ria-Vung Tau province, and the establishment of branch offices by our banks (DBS, UOB and OCBC) in Vietnam.
We also have key investments such as Keppel Land’s Saigon Centre II, CapitaLand Mulberry Condominium project, Mapletree’s SC VivioCity project, Thomson Medical Center’s project for Protrade’s Hanh Phuc International Women and Children Hospital, Kinderworld’s International Schools, Banyan Tree’s investment in a world-class resort project in Thua Thien-Hue, the design of Phu Quoc’s international airport, and the master-planning of Binh Duong New City.
Apart from Vietnam’s strong economic potential, the success of these Singapore projects in Vietnam have been crucial in generating greater awareness and encouraging further investments from other companies in Singapore and the region. It is thus imperative for the Vietnamese government to continue fostering favourable business environment and conditions (such as less red tape, better tax incentives and political & macroeconomic stability) to encourage the private sector to increase their investments in the country.
Singapore-Vietnam Connectivity Framework
Although economic relations between our two countries are primarily driven by the private sector, the Singapore Government also works closely with the Vietnamese Government to promote bilateral trade and investments. We established the Singapore-Vietnam Connectivity Framework Agreement in 2005 to build on the strengths and competencies of both countries to facilitate closer business links and attain mutual growth. I am sure that the Connectivity Framework will continue to serve Singapore and Vietnam well in deepening and broadening our bilateral economic cooperation.
I am confident that economic links between our two countries will continue to flourish under the strong Vietnamese leadership. As Vietnam continues to liberalise and develop its economy, there will be growing demand for quality products and services.
In particular, to enable the Vietnamese economy to be more globally and regionally integrated, and to provide for the needs of a growing middle-class, there will be strong demand for modern services such as finance, logistics, infocommunications, tele-communications, education, healthcare, urban solutions and tourism services. Many Singaporean 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.
I am also convinced that there are many more opportunities for businesses in emerging regions within Vietnam beyond the more familiar Hanoi and Ho Chih Minh City. I have had the opportunity to visit some of these provinces and am sure that the Vietnamese Government will be able to develop these areas to their full potential. For example, central Vietnam has become more attractive to foreign investors due to its strong tourist potential and proximity to other countries in the region. In view of central Vietnam’s potential, Singapore conglomerate Sembcorp recently announced that it would build a fifth Vietnam-Singapore Industrial Park in Quang Ngai province in central Vietnam.
More generally, as the Vietnamese government maintains its political and economic stability, and continues to encourage foreign investments into the country, our private sector players will further contribute to Vietnam’s growth and development in the coming years. I look forward to more avenues for bilateral cooperation with the elevation of our relations to a strategic partnership.
The strengthening of bilateral relations and improvement of “connectivity” between Singapore and Vietnam does not only benefit the two countries but also the region as a whole. I am confident that Singapore and Vietnam will continue to work closely bilaterally, as well as within ASEAN, to further the interests of the peoples of our two countries as well as the region.