Building on Singaporean good will
Building on Singaporean good will
On the eve of Singaporean National Day on August 9, Singaporean Ambassador to Vietnam Ng Teck Hean spoke to VIR’s Thanh Tung about prospects for Vietnam-Singapore economic co-operation in the coming time.
Vietnam and Singapore forged a strategic partnership last September. How has this relationship been fostered in terms of trade and investment?
Singapore and Vietnam raised relations to a strategic partnership during Prime Minister Lee Hsien Loong’s visit to Vietnam in September last year. We enjoy strong and long-standing trade and investment ties, underpinned by the Connectivity Framework Agreement. The 10th Vietnam-Singapore Connectivity Ministerial Meeting, which was concluded in April this year, has further deepened economic collaboration between our two countries.
As of July 2014, Singapore was the third largest foreign investor in Vietnam with over $30.5 billion in cumulative investments across 1,300 projects. Our companies such as Mapletree, Keppel Land, CapitaLand and Sembcorp have longstanding investments in Vietnam, creating jobs and helping to shape the urban and industrial landscape of Vietnam’s growing cities. The Vietnam Singapore Industrial Park (VSIP) is a particularly good example of our partnership. There are now five VSIPs across Vietnam, providing more than 140,000 jobs.
Under the strategic partnership, we will continue to work closely with Vietnam to ensure that the investment climate remains conducive to Singaporean investors. Our companies take a long-term view towards investments in Vietnam and value a stable business climate with investor-friendly laws. We also hope that Vietnam can continue to provide certainty and protection to foreign investments.
Should Vietnam’s government develop incentives to attract more Singapore businesses into Vietnam?
When making investments abroad, Singaporean companies look beyond the immediate challenges or short-term incentives to assess the potential of the market in the long-run. They recognise Vietnam’s economic fundamentals, which include a strong demographic advantage given its young growing labour force, and a rich endowment of resources. At the same time, companies from Singapore are cognisant of the challenges on both the domestic and political fronts. For example, the protests in Vietnam in May this year raised concerns among foreign investors. As such, while investment incentives may create short-term interest in Vietnam, the key issue remains Vietnam’s ability to convince companies that it can, and will continue, to provide a stable and conducive investment environment.
The ASEAN Economic Community (AEC) is expected to be officially established by late 2015, creating a single market and production base in the region. How will this affect bilateral trade and investment ties?
Through the establishment of the AEC in 2015, we hope that more foreign companies will look at the value proposition offered by ASEAN as a whole, and consider locating their operations and supply chains across Southeast Asia. For instance, a multinational company could decide to set up their regional headquarters or research and development arm in Singapore, and locate their manufacturing plant in Vietnam to capitalise on Vietnam’s competitive and productive labour force, as well as its abundant supply of natural resources. This creates synergy between both countries.
The Trans-Pacific Partnership Agreement (TPP) is expected to be inked next year. Together with the establishment of the AEC and the Vietnam-Singapore Connectivity Framework Agreement inked in 2005, what are the prospects for Vietnam-Singapore economic collaboration?
The TPP holds much promise for Vietnam, Singapore and all negotiating parties. It will facilitate the integration of member countries into regional value chains, allowing them to capture a larger portion of regional trade and investment flows. Together with the AEC’s initiatives to bring about the free flow of goods, services and investment among ASEAN member states, Vietnam and Singapore companies will be able to operate more effectively across the region and become more competitive. This will, in turn, raise the competitiveness of the region. As Vietnam moves up the value chain, the integration of ASEAN as well as the linking of Asia and the Pacific through the TPP will present new opportunities for collaboration. The Vietnam-Singapore Connectivity Framework Agreement is a useful platform to explore such new opportunities for collaboration between companies from Vietnam and Singapore.
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