Connecting Vietnam-Singapore economies

Relations between Vietnam and Singapore have developed constantly since the two countries established diplomatic ties on August 1, 1973. Singapore attaches importance to strengthening cooperation with Vietnam and Vietnam is one of Singapore’s major trade and investment partners in Southeast Asia.

In 2004, the two countries’ leaders signed a joint statement on the framework of comprehensive cooperation in the 21^st century and agreed to implement an initiative to connect the two economies. The initiative is a comprehensive cooperation programme aimed at connecting all Vietnamese processes of production, trade, investment and consumption with those of Singapore to support the two economies and creating a favourable environment and orientations for their business communities to expand their cooperation as well as with the third countries.

Besides bilateral cooperation in education and culture, Singapore has provided assistance to Vietnam in such areas as science, technology, human resource development, finance, tourism, banking, and shared experience in developing the market economy, as well as in regional and international integration.

Investment is considered the most effective cooperation area between Vietnam and Singapore. Despite fluctuations in ASEAN investment flows into Vietnam in recent times, Singapore has taken the lead in terms of the number of projects, capital and scale of investment. In the past seven months, 44 Singaporean-invested projects were licensed in Vietnam with a total registered capital of US$1.3 billion. Meanwhile, eight other Singaporean-invested projects were approved to increase their capital totalling more than US$13.3 million. As a result, by July 2007, Singapore has had 503 projects licensed, capitalised at US$9.6 billion, ranking second among 79 foreign investors in the country. Singaporean investors have got involved in all economic sectors, from oil and gas exploration and exploitation and industrial production to agro-forestry and fisheries processing. The service sector alone has attracted more than US$5.5 billion in investment capital from Singapore.

Recently, Singaporean investors have invested a huge amount of capital in Vietnam’s housing, office and hotel construction projects.

Currently, Vietnam is trying to lift barriers to speed up the disbursement of capital for projects and continue to attract investors from Singapore. The two countries are revising a mechanism signed by the Vietnam Ministry of Planning and Investment and the Singapore Economic Development Board to simplify licensing procedures.  

Promoting cooperation between Vietnam and Myanmar

After Singapore, PM Dung will visit Myanmar from August 14-15.

Vietnam established relations with Myanmar very early as it opened its representative agency in Yangon in 1947 and upgraded their bilateral ties to the ambassadorial level on May 28, 1975.

Over the past years, bilateral relations of traditional friendship and multifaceted cooperation have been strengthened through the exchange of high-level visits. The two countries celebrated 30 years of their diplomacy on May 28, 2005, and have since conducted annual political consultations between their Ministries of Foreign Affairs.

Vietnam supports Myanmar’s regional and international integration and is known as the place where Myanmar was admitted to ASEAN and the Asia-Europe Meeting (ASEM) in the most difficult times.

Bilateral economic and trade ties have also grown and flourished over the years, with two-way trade reaching US$70 million in 2006, up 21.1 percent against 2005. Their trade value rose to US$23 million in the first four months of this year and is expected to hit US$100 million by the end of the year. The two countries’ Sub-committees on Trade met last January to identify measures to promote bilateral trade.

In the past six months, several delegations of Vietnamese enterprises visited Myanmar to explore the possibility of economic and trade cooperation between the two countries. Myanmar handed Vietnam a draft programme on caged fishing and asked Vietnam to help Myanmar plant and process medicinal herbs. Myanmar also proposed the opening of a direct air route between Hanoi and Yangon and other countries in the region in the framework of the Ayeyawady - Chao Phraya - Mekong Economic Cooperation Strategy (ACMECS). The air route is due to open in November 2007.

The two countries have conducted five sessions of the Vietnam-Myanmar Joint Committee, outlining areas of special cooperation in trade, agro-forestry and fisheries, industry, healthcare, tourism, post and telecommunications and aviation. They have also coordinated closely at regional and international forums such as the Greater Sub-Mekong region, and the ACMECS. 

Developing Vietnam-Brunei cooperation potential

Brunei will be Mr Dung’s last stopover from August 15-16.

Vietnam and Brunei established diplomatic ties on February 29, 1992. They have conducted many exchanges of high-level visits to map out orientations for bilateral cooperation. The two Ministries of Foreign Affairs signed a memorandum of understanding on the establishment of the Vietnam-Brunei Joint Committee in 2000, which is expected to convene its first session this year.

Though the two countries signed bilateral trade agreement in November 2001, two-way trade has remained modest, standing at merely US$4.5 million in 2005. By June 2007, Brunei had 37 projects in Vietnam with a total investment capital of US$125.8 million, ranking 29^th among countries and territories investing in the country.

However, Vietnam and Brunei have great potential for investment cooperation given their good political and diplomatic ties. Besides oil and gas, several Vietnamese businesses are seeking to invest in agriculture, aquaculture and livestock breeding for sales in Brunei and for export.

The two countries have strengthened cooperation in education, training, national defence, security and culture. They have also coordinated closely in regional and international forums such as the United Nations, ASEAN, the ASEAN Regional Forum (ARF), the East-Asia Region, the Asia-Pacific Cooperation Forum (APEC) and the Asia-Europe Meeting (ASEM).