Vietnam & Singapore Establish Strategic Partnership
By Dezan Shira & Associates
Posted: 4th February 2015 08:40SINGAPORE – As investment and trading partners, Singapore and Vietnam have proven to be an unstoppable combination – with 2014 bilateral trade up 20.3 percent year on year. Vietnam’s strategic location, low-cost labor, burgeoning consumer class, and incentives to foreign investors have made Vietnam an attractive destination for Singaporean foreign direct investment (FDI). While Singapore, with the highest GDP per capita in ASEAN, remains a prime market for Vietnamese exporters. What follows below is a detailed account of the recent progress made in Singapore-Vietnam relations.
Singapore’s Department of Statistics has released data showing that bilateral trade between Singapore and Vietnam reached SGD20.4bn (US$16.3bn) in 2014, up 20.3 percent on 2013 levels. Trade between the two countries has tripled from 2003 levels, reaching SGD17.4bn (US$13.9bn) in 2013. Bilateral trade has continued to grow strongly – by October 2014, trade levels were already over the total for 2013.
Commodities exports from Vietnam to Singapore rose 22.4 percent in 2014 to reach SGD4.05bn ($US3.2bn). Secondary sector exports reached SGD1.32bn ($US1bn), including electronic goods and components and telephones. Other important exports from Vietnam include coffee, crude oil, footwear, machinery, minerals, and tea.
Exports from Singapore to Vietnam rose 20.1 percent to SGD16.34bn (US$12.75bn). Of these exports, products produced in Singapore rose 18.7 percent to SGD7.3bn ($US5.46bn), and re-exports rose 21.2 percent. The bulk of these exports were books and photographs, electronic goods and components, plastic and plastic products, and telephones.
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Singapore is currently ASEAN’s largest investor in Vietnam by capital, with US$32.7bn invested in over 1,350 projects. The next largest ASEAN investors are Malaysia, with US$10bn investment in 484 projects, and Thailand with US$6.7bn invested in 371 projects. The total investment of ASEAN countries into Vietnam reached US$53bn in over 2,507 projects by the end of 2014, accounting for a fifth of Vietnam’s total FDI and 14 percent of total FDI projects.
The five Vietnam-Singapore Industrial Parks (VSIP) are a testament to the fruits of close cooperation between the two countries. The parks in Binh Duong, Hai Phong, Bac Ninh and Quang Ngai have attracted close to 500 tenants from 23 countries and territories, reaching a total of US$6.4bn in investments and US$8bn in export value, and creating over 140,000 jobs in Vietnam.
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Singapore and Vietnam’s relationship was formally elevated in a strategic partnership agreement in September 2013, bringing deeper economic, defense, international, and political cooperation. The agreement promotes bilateral high-level exchanges.
Following the 10th Singapore-Vietnam Connectivity Ministerial Meeting in 2014, Singapore’s Trade and Industry Minister Lim Hng Kiang called the two countries “long-term trade and investment partners”, encouraging companies to explore investment opportunities in Vietnam in a range of sectors. The year 2015 marks the tenth anniversary of the signing of the Singapore-Vietnam Connectivity Framework Agreement, which focuses on bilateral cooperation in finance, education and training, transportation, investment, information and communications technology, and trade and services.
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Cooperation between the judicial systems of Singapore and Vietnam was enshrined in a memorandum of understanding between the two countries’ supreme courts signed this January 2015. The MoU, signed by Trung Hoa Binh and Singaporean Sundaresh Menon, covers international conference organisation, delegation exchanges, IT in court, and personnel training. Groups of Singaporean and Vietnamese judges will be established to devise areas of cooperation for the upcoming ASEAN Chief Justices’ Meeting, facilitating cross-border arbitration.
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This article was first published on ASEAN Briefing
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