Fresh connections reinforce trade facilitation in ASEAN

Registered foreign direct investment in Vietnam was flat at $15.7 billion in 2021. Investment from two major economies (Singapore and South Korea) was unchanged, but inflows from Japan increased 3.5 times to $2 billion, from Hong Kong by 5 per cent to $1.2 billion, and from mainland China by 8 per cent to $1.5 billion. These five economies accounted for 80 per cent of inflows, with Singapore alone accounting for nearly half of that share.

The level of investment was sustained by strong overseas investment in manufacturing and in electricity production and distribution – the two largest recipients, accounting for 77 per cent of inflows.

Investment in real estate continued to grow – up 41 per cent to $1.4 billion – reflecting the continued economic growth and industrial development in the country during the pandemic years.

Some big-ticket projects in 2021 have helped sustain the high level of registered investment. They included a $3.1 billion liquefied natural gas power plant in the Mekong Delta province of Long An with participation from companies from Singapore; LG Display of South Korea, which is expanding production facilities in the northern port city of Haiphong involved an increase in capital by $2.1 billion; Maruben of Japan, which together with Vietnam Trading Engineering is developing the $1.3 billion O Mon II gas-fired power plant; and Samsung of South Korea, which invested further in the country with an electronics production facility estimated to be worth $952 million.Source: ASEAN Investment Report 2022

Ha Kim Ngoc - Deputy Minister of Foreign Affairs

Over the past two years, ASEAN has demonstrated its bravery and resilience, promptly and effectively responding to the challenges.

The outbreak of the COVID-19 pandemic has disrupted the activities of international life. However, under the guidance of Vietnam during the country’s 2020 chairmanship, ASEAN has shown the initiative to adapt and promptly switch meetings and activities to the online format, thereby maintaining the momentum of regional cooperation and linkages and community-building efforts, responding to the pandemic together.

ASEAN has quickly approved and deployed initiatives such as the establishment of the COVID-19 ASEAN Response Fund, the establishment of the Regional Reserve of Medical Supplies for Public Health Emergencies, and the proposal to establish the ASEAN Centre for Public Health Emergencies and Emerging Diseases, thereby promptly mobilising ASEAN’s resources and the support of partners for pandemic prevention and control.

ASEAN has shrewdly and effectively handled the competition among major countries through a balanced and harmonised approach on the basis of ensuring the operating principles as well as procedures of the mechanisms/forums initiated by ASEAN and with the participation of major countries such as ASEAN Regional Forum, East Asia Summit, and ASEAN Defence Ministers’ Meeting Plus. At the same time, ASEAN has also expressed an independent and neutral stance, wishing major countries to compete in a fair and responsible manner and contribute to the region’s peace, stability, and prosperity. This is clearly reflected in the ASEAN Foreign Ministers’ Statement on the Importance of Maintaining Peace and Stability in Southeast Asia in August 2020.

Along with efforts to fight against COVID-19, ASEAN soon promoted post-pandemic recovery measures, including the development of the ASEAN Comprehensive Recovery Framework and an implementation plan to minimise the impacts of the pandemic and boost comprehensive recovery in ASEAN. The bloc also signed an agreement on the ASEAN Travel Corridor Arrangement Framework which is an initiative to facilitate essential official and business travels among ASEAN member states while the pandemic is still not completely brought under control.

These measures have brought about positive effects, contributing to helping ASEAN countries to both control the pandemic and gradually reopen their economies, promoting cooperation in socioeconomic development and recovery.

Denny Abdi - Indonesian Ambassador to Vietnam

The trade and investment between Indonesia and Vietnam continue to grow progressively. In 2019, the total trade of Indonesia and Vietnam had reached $9.07 billion, while in 2020 it decreased to $8.21 billion due to the pandemic. In 2021 bilateral trade between two countries reached $115 billion, up 40 per cent compared to 2020. In the first eight months of 2022, the figure reached $9.3 billion, up 25.3 per cent compared to the same period in 2021 of $7.49 billion.

Furthermore, more than 30 Indonesian companies have been operating in Vietnam. According to records in June, accumulatively Indonesian investors had 101 projects in Vietnam, with total investment value at $618 million. With strong determination to further collaborate and promote economic cooperation, in 2022 both countries agreed to set up new target of bilateral trade, which is to reach $15 billion by 2028.

Indonesia and Vietnam represent 55 per cent of ASEAN’s population and 45 per cent of its economy. Both countries are among the most promising economies among ASEAN countries, which carries great future potential as a driving force for economic growth.

There are many potential areas of common interest that could be explored to further boost trade and investment of both countries, such as fisheries and agriculture, high tech industries, digital economy, electric vehicle, and renewable energy.

In order to strengthen economic cooperation, both countries are committed to facilitate trade and investment exchanges. The Indonesian Embassy in Hanoi regularly organise business forums to explore the opportunities for mutual benefit and promote cooperation for the business community.

The embassy also actively facilitates Indonesian business to join trade and business expos in Vietnam, including to gather its businesses to participate at the upcoming Vietnam Medipharm Expo 2022, a conference on promoting export of agriculture and aquaculture products of the Mekong Delta province of Ben Tre, an international exhibition of food industry in Ho Chi Minh City, the third Vietnam International Supporting Industry and Manufacturing Exhibition, and the 20th Vietnam International Trade Fair.

This year, Indonesia’s biggest annual exhibition, the 37th Trade Expo Indonesia that covers trade, tourism, and investment will be held on October 19-23 in Tangerang of Indonesia and online from October 19 to December 19, under the theme of strengthening global trade for stronger Recovery.

The embassy organised a business consultation on October 5 to attract potential participants to the expo in order to reinvigorate trade connection and ties between the two countries to recover together.

Jaya Ratnam - Singaporean Ambassador to Vietnam

Singapore and Vietnam’s strong economic, trade, and investment ties are underpinned by decades of consistent and meaningful engagements between our governments and peoples. During President Nguyen Xuan Phuc’s state visit to Singapore earlier this year, President Phuc and President Halimah Yacob reaffirmed these ties and committed to further collaboration.

Our leaders also oversaw the signing of an MoU on economic and trade cooperation between our two countries. We continued to build on this momentum with further high-level visits by Singaporean Deputy Prime Minister and Coordinating Minister for Economic Policies Heng Swee Keat in September, and Singaporean Minister for Manpower and Second Minister for Trade and Industry Dr. Tan See Leng in August.

We are starting from a very strong base. Singapore has been the leading source of foreign direct investment in Vietnam for the past two years. This demonstrates the confidence that Singapore investors have in Vietnam’s economic potential and the Vietnamese government’s efforts to boost the ease of doing business here. Despite the disruptions of the pandemic and the current global economic downturn, Singaporean companies continue to seek new opportunities to diversify and expand their presence in Vietnam. I would like to highlight three sectors.

The first sector is supply chains and logistics. Recent global supply chain shocks have shown everyone the importance of this sector. Singapore companies look forward to contributing further expertise, human resources training, and digital solutions to develop the logistics sector in Vietnam. To cite just one example, when completed, the multimodal Vinh Phuc ICD Logistics Centre established by Singapore’s YCH Group and Vietnam’s T&T Group will strengthen trade connectivity and supply chain resilience in our region.

The second sector is the green economy. Singapore is keen to work with Vietnam as it increases investments in sustainable infrastructure and renewable energy, with the ambitious goal of achieving net-zero carbon emissions by 2050.

The collaboration between Sembcorp and Vietnam Electricity is one promising partnership in this area. Sembcorp is also working hard to upgrade its network of Vietnam-Singapore Industrial Parks to integrate sustainability and innovation.

The third sector is the digital economy. Growing the digital economy will be a key priority for both our countries in the coming decades. Vietnam has identified the digital economy as one of the key drivers of growth that will propel Vietnam towards its ambition of becoming a high-income country by 2045. Vietnam’s fast-growing middle class and young population make this sector particularly attractive to Singapore companies in e-commerce, digital payments, smart cities, and digital trade.

Nikorndej - Balankura Thai Ambassador to Vietnam

Our world is rapidly changing and constantly marked with uncertainty. No-one anticipated the COVID-19 pandemic and that, as a result, we would enter a global disruption and a new normal lasting over two years. Our geopolitical landscape has also changed in that time, influenced by geoeconomic volatility.

As we are transiting into a multipolar environment, power is being diffused to middle power countries. Consequently, I believe that regionalism is once again becoming more and more important as middle power countries come together to empower themselves through coalition-building and agenda-setting for more relevance in shaping the new and emerging international system.

This is why ASEAN and its mechanisms and agreements, including the ATIGA, are so vital. Not only do they provide standardised ways to increase intra-ASEAN trade, but it also sets the tone for trade between ASEAN and other countries, allowing the bloc to increase its strategic maneuver with collective voice and a stronger leverage.

It is my conviction that Thailand and Vietnam can work together to help increase ASEAN centrality and its relevance, as well as its strategic positioning.

Bilaterally, our trade and cooperation in all areas has continued to grow in tangible and meaningful ways. Last year, marking the 45th anniversary of the establishment of our diplomatic relations, the Thai side established the Thai Chamber of Commerce and Industry in Vietnam. In all hope and likelihood, by 2026 – our Golden Jubilee anniversary of diplomatic relations, our trade will reach $25 billion, a goal set by our leaders.

Internationally, Thailand and Vietnam are cooperating on issues of common interest. This year, as Thailand will host the APEC Summit in November, and Thailand and Vietnam are very much aligned on issues such as bio-circular-green economy, free trade area of the Asia-Pacific, and safe passage agenda, with a view to fostering relevance and leverage.

Together, we can work to ensure a more prosperous and sustainable future for our countries.