A fresh space for Vietnamese-Singaporean businesses

What are the opportunities for Vietnam and Singapore to expand cooperation in the digital economy and green economy in the context that the two countries are striving to meet net-zero commitments by 2050?

Kenneth Loh, vice president of the Singapore Chamber of Commerce’s Hanoi office

The recent signing of the Green-Digital Economic Partnership between Vietnam and Singapore has presented a significant opportunity for both countries to expand their cooperation in the digital and green economies.

In term of digital economy cooperation, businesses can explore the digital infrastructure development, fintech innovation, e-commerce, digital services and cybersecurity.

As for the green economy sector collaboration, areas such as renewable energy, energy efficiency, circular economy, carbon markets and green finance potentially could be considered favourably. Further, the synergistic effect of the digital and green economy would yield significant result in areas such as digitalisation of green initiatives, green fintech and smart cities.

Singapore and Vietnam signed an MoU on areas like the green-digital economic partnership and maritime cooperation in 2023. How has bilateral cooperation in the fields developed since then?

The MoU was for bilateral cooperation in green and digital economies, as well as maritime sectors. This agreement marked a significant step in deepening bilateral cooperation, and there have been encouraging signs of progress and mutual benefits for businesses in both countries.

In the energy sector, both Vietnam and Singapore have been collaborating on renewable energy projects, exploring opportunities in areas like liquefied natural gas, and sharing knowledge on sustainable energy practices. On the digital front, Singapore, with its advanced digital infrastructure and expertise, has been actively assisting Vietnam in building its digital ecosystem.

This includes developing digital platforms for sectors like banking, finance, e-commerce, and land management. In terms of innovation initiatives, Singaporean companies are increasingly setting up research and development centres in Vietnam, leveraging the country’s talent pool and market potential.

The MoU can potentially benefit businesses of both countries through increased investments from Singaporean businesses, particularly in the technology, renewable energy, and infrastructure sectors. On the other hand, Vietnamese businesses can gain better access to the Singaporean market and beyond.

Last year, Vietnam and Singapore signed an upgraded connectivity framework agreement, which expands bilateral cooperation in energy cooperation and sustainable development. How has the expansion made impacts on investment trends among Singaporean businesses in Vietnam?

The upgraded connectivity framework agreement between Vietnam and Singapore, with its focus on energy cooperation and sustainable development, has indeed resulted in a shift in investment trends.

The likely impact would be increased investment in energy and sustainability due to Vietnam’s growing energy demands, coupled with its renewables potential, thus making it an attractive market for Singaporean investors. The focus of investments is likely to be in solar, wind and hydropower generation. In the areas of sustainable development such as green infrastructure, waste management and circular economy are similarly attracting increased funding from the Singaporean businesses.

The agreement would also be likely to have a broader impact on the bilateral trade and investment between Singaporean and Vietnamese businesses that may result in the diversification of investment portfolios beyond the traditional sectors such as manufacturing and real estate.

In addition, it may strengthen bilateral trade in energy resources, equipment and services. Furthermore, the agreement may encourage the knowledge and technology transfer of Singapore’s expertise in sustainable development and clean energy, thereby fostering Vietnam’s innovation and capacity building.

Ultimately, the upgraded framework positions Vietnam as a more attractive destination for foreign investment.

What are the new opportunities for businesses and investors of the two countries in areas such as carbon credits, renewable energy, and the digital economy in the months to come?

The upgraded connectivity framework between Singapore and Vietnam presents a wealth of opportunities for businesses and investors in these burgeoning sectors.

In carbon credits. Both Vietnam and Singapore can collaborate on developing a robust carbon market framework, including standards, verification, and trading platforms. In addition, Vietnam’s rich biodiversity offers significant potential for carbon sequestration projects, such as reforestation, mangrove restoration, and sustainable agriculture.

Further, as demand for carbon offsets grows globally, Singapore and Vietnam can facilitate cross-border trading, with Singapore acting as a hub for carbon credit finance and trading.

In renewable energy. Vietnam’s abundant solar and wind resources, coupled with Singapore’s financial and technological capabilities, create a promising partnership in generating solar and wind power. In addition, Singapore’s expertise in energy storage technologies can be transferred to Vietnam to support the integration of renewable energy into the grid.

Further, both countries can collaborate on green hydrogen production and utilisation, leveraging Singapore’s advanced industrial capabilities and Vietnam’s renewable energy potential.

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