Boosting economic cooperation between Singapore and Vietnam
Singapore’s Minister for Trade and Industry, Brigadier-General George Yeo said that Vietnam’s economy had been the fastest growing economy in ASEAN and the second in Asia, after China. The new market reform policies have also contributed to the strong gross domestic product growth in the country. BG Yeo also outlined Singapore’s trade relationship with Vietnam.
GY: Vietnam and Singapore have long enjoyed close economic ties. Last year, our total bilateral trade rose to S$6 billion. This represents a doubling of our bilateral trade within a short time frame of 7 years. In the area of investments, we have been Vietnam’s top foreign investor in terms of registered capital, with cumulative investments of US$7.4 billion in 288 projects as at the end of last year. This accounted for 18 percent of Vietnam’s total foreign investments that has been approved to date.
Singaporean investments into Vietnam are also growing steadily, with several projects already underway there, including those by Asia Pacific Breweries and SembCorp Industries’ Vietnam-Singapore Industrial Park.
BG Yeo also said that the Vietnam-Singapore Joint Steering Committee had also been set up to promote and facilitate foreign investment into both Singapore and Vietnam.
GY: Essentially, Singapore and Vietnam will jointly attract projects from foreign companies that are partly located in Singapore and partly in Vietnam. These are two-legged investments that maximise the complementary advantages of the two countries. To reduce friction and minimise the hassle to investors of operating in two countries, EDB and Vietnam’s MPI will work together as one virtual entity to service them. If we can do this well, Singapore and Vietnam together can present a very attractive value proposition to investors compared to other locations in the world.
In this sense of presenting attractive propositions to potential investors, one company that’s been in Vietnam for sometime now is SembCorp Industries in Singapore. Group Chief Operating Officer, Ms Low Sin Leng described the nature of SembCorp’s presence there.
LSL: We’ve invested in Vietnam since 1996. The big project was the Vietnam-Singapore Industrial Park, which has, over the last 8 years, contributed quite significantly to the province where the Park is located. Total committed investment has been more than US$600 million. What we did was to develop the infrastructure of the industrial park, and did very aggressive marketing, to attract foreign companies, multinational companies and Singaporean companies to invest in Vietnam. We provide a hassle-free operating environment, and that has been, I think, quite a significant success.
SembCorp Logistics, or SembLog, has signed a joint venture with another logistics firm in Vietnam. This will leverage on SembLog’s established logistics operation in Asia. Ms Low elaborated on the partnership.
LSL: Certainly that will enhance SembLog’s globalisation and regionalisation, in expanding their network into Vietnam, SembLog has a successful and extensive network in China and India, and now they are penetrating Vietnam, which is a good sign. We at SembCorp, are confident about Vietnam’s development and future, so we want to seize this business opportunity, to grow along with Vietnam’s own economic growth.
Another company poised to enter the Vietnam market is PSB Corporation, a Singaporean company involved in integrated business services in education, consultancy, technology and testing. Henry Heng is PSB’s Chief Executive Officer.
HH: We are going into Vietnam on a total basis, together with Cetana Vietnam Company, which is headed by Mohan Kumarasamy, who is our partner there. He and his team will be based there. And what we plan to do is to have a total replica, a replication of the PSB Academy in Singapore, in Vietnam, starting with Ho Chi Minh City. The school is a full-fledged school, which has already got the approval of the Vietnamese government, with an education license to run a complete suite of diploma and advanced diploma programmes that we offer. We have a total of more than 18 different disciplines. The difference between what we’re attempting to do in Vietnam, as opposed to other education providers there, is that we’re going to go there with a long-term view.
Having had economic ties with Vietnam for several years now, I asked Ms Low Sin Leng, Group COO of SembCorp Industries what the business environment was like over in Vietnam.
LSL: Overall, there is a government-to-government relationship. And I’ve found that the Vietnamese government, by and large, are pro-business in their mindset. They need to react, in my view, a bit faster, to the speed of development and changes. But they are very willing to listen to feedback, and prepared to adapt and change some of their policies to cater for a better business environment, and increasing globalisation and competition, which is a good sign. And for the people there, they are hungry to learn, eager, and very quick to learn. Basically, they are intelligent and committed. And I think it’s just a matter of exposure and training, and upgrading. They have developed a global mindset very quickly. So generally, the investment environment on the whole, is positive.
When penetrating foreign markets, a business-friendly environment is vital. But a similar business culture to one’s own can also very helpful. Ms Low doesn’t see a problem in this regard, when it comes to Vietnam.
LSL: Culturally, I don’t think there’s a big gap, because they are also Asian and a lot of their customs, traditions and beliefs are quite close to the Chinese ones, in my view. And therefore, there hasn’t been any major culture shock. But of course, because of their historical background, it will take them a little bit of time to gel with our Singaporean style. But on the other hand, I feel that we should take advantage and leverage on their strengths so we can complement one another. The Singaporean style also has its weaknessess, so being able to complement each other seems the best way to move forward.
So it looks like the economic relationship between Singapore and Vietnam is set to get stronger, since looking ahead, Singapore’s Trade and Industry Minister,
Brigadier-General George Yeo believes that Vietnam’s future prospects are very good.
GY: For the next 2 years, Vietnam is projecting an annual growth rate of 8 percent. This is an achievable target. We in Singapore are optimistic about the improving business, trade and investment prospects in Vietnam. With abundant natural resources, a large population of 80 million people who are hardworking and frugal, and many who are young and literate, Vietnam’s future is very bright. When Prime Minister Goh visited Vietnam in March last year, he saw Vietnam becoming an important engine for ASEAN’s growth in the future.
Henry Heng of Singapore-based PSB Corporation, is also optimistic about the joint futures of Singapore and Vietnam, and also attributes a greater part of this to the eager Vietnamese population.
HH: Vietnam is at a stage of development, where they are mirroring what Singapore went through, in the 80s, in particular. And Vietnam is growing at about 7% on average, looking at 8% in the future. We are excited about the growth in Vietnam. What makes Vietnam outstanding in our view, is the energy level of the people. If you walk the streets of Ho Chi Minh City, you can see its vibrancy. The people are determined, and they are there to learn. There is a hunger for learning. And that’s where we feel PSB can fit into the growth and development of the workforce in Vietnam.
And finally, BG Yeo summed up the areas in which he sees greater cooperation between the two countries.
GY: With strong political will on both sides, the economic relationship between Vietnam and Singapore will become stronger in the coming years, covering a whole range from trade and investment to tourism and human resource development.
Radio Singapore International - March 11, 2004
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