Much to celebrate with 50 years of Singaporean ties

We were delighted to see regular exchanges of high-level visits between Singapore and Vietnam resume in 2022. Vietnam’s President Nguyen Xuan Phuc visited Singapore in February, while Singaporean President Halimah Yacob visited Vietnam in October.

Jaya Ratnam, Singaporean Ambassador to Vietnam

Through government-level MoUs signed at the two state visits, Singapore and Vietnam strengthened our multi-faceted cooperation and expanded cooperation to include new areas such as digital economy, regional and global supply chain connectivity, energy, and carbon credits. These MoUs have enabled Singapore and Vietnam to seize new opportunities in the digital and green economy as the world recovers from the pandemic.

Singapore and Vietnam share strong trade and investment ties. Bilateral trade has grown steadily over the past decade, reaching SGD26.9 billion ($20 billion) in 2021, an 18.7 per cent increase on-year. Singapore was also Vietnam’s second-largest cumulative foreign investor, with around $70.8 billion invested in around 3,097 projects as of December 20, 2022.

Further exemplifying our strong economic ties are ongoing joint projects. In 1996, Singapore’s Sembcorp Industries and Vietnam’s Becamex established the first Vietnam-Singapore Industrial Park (VSIP) in the southern province of Binh Duong. Today, there are 12 VSIPs across Vietnam, attracting $17 billion worth of capital, and creating more than 300,000 jobs.

In August, Singapore’s NCS Group and FPT Software also launched a Strategic Delivery Centre in Hanoi, which is expected to employ a team of over 3,000 by 2025.

At the regional level, Singapore and Vietnam are also like-minded partners in free trade agreements. Through the Connectivity Framework Agreement signed in 2005, Singapore and Vietnam meet annually for connectivity ministerial meetings (CMMs) to discuss new and ongoing collaborations in the areas of education, finance, ICT, investment and trade, and transportation.

At the 16th Singapore-Vietnam CMM held in Singapore in December, Singapore and Vietnam broadened discussions to include innovation and energy. An MoU on formation of an Innovation Work Group was signed by Singapore’s Ministry of Trade and Industry and Vietnam’s National Innovation Centre, to connect the startup ecosystems from both sides.

Looking forward

The MoUs signed in 2022 have highlighted how both countries are taking important steps in new and forward-looking areas to elevate Singapore-Vietnam bilateral cooperation. As we look forward to 2023 and beyond, Singapore and Vietnam can deepen our economic cooperation in five key areas:

First is in digital economy and innovation. Singapore and Vietnam are among the top three startup ecosystems in Southeast Asia. As of December 2021, Vietnam had more than 3,800 startups and is home to four unicorns. The total startup funding to Vietnam in 2021 reached a new high of over $1.3 billion, with Singapore as the top source. Our collaboration in innovation has gained momentum through BLOCK71 Saigon, a joint collaboration between the National University of Singapore and Vietnam’s Becamex IDC; and the Global Innovation Alliance where Enterprise Singapore has partnered with Quest Ventures to facilitate two-way exchanges of startups between both countries. With our common goal of driving further economic growth through technology and innovation, there is scope for Singapore and Vietnam to tap on each other’s innovation ecosystems for partners, funding, and talent.

Second, arising from Vietnam’s rapid urbanisation, Vietnam’s infrastructure sector is expected to grow at a compound annual growth rate of approximately 4 per cent between 2020 and 2025. It is projected that Vietnam’s sustainable infrastructure will require investments of up to $25 billion per year to develop ports, expressways, urban areas, and green energy.

There is potential for Singapore-based companies to work with Vietnamese corporates to provide financing, technology, and operating expertise for projects in the areas of green energy, smart cities, waste management, and wastewater treatment infrastructure.

Regional connections

Thirdly, Singapore and Vietnam share a common vision of achieving net-zero emissions by 2050. The scaling up of renewable energy and development of regional power grids will not only support our decarbonisation efforts, but also promote greater infrastructural connectivity to help advance the region’s sustainable energy goals.

Like the Laos-Thailand-Malaysia-Singapore Power Integration Project, which serves as an important pathfinder project to advance regional energy interconnectivity, collaborations between Vietnam and Singapore can contribute to the ASEAN Power Grid vision.

The energy cooperation MoU signed in October 2022 has paved the way both countries to explore closer collaboration in areas such as renewable energy development, cross-border electricity trading, liquefied natural gas and electricity, low-carbon solutions, and demand-side management, including energy efficiency.

Next, we urgently need to accelerate climate action to meet the goals of the Paris Agreement. Singapore is committed to doing our part. In 2021, we rolled out the Singapore Green Plan 2030 to advance Singapore’s national agenda on sustainable development and position us to achieve our long-term net-zero emissions aspiration as soon as viable.

To advance global climate action and ambition to achieve the goals of the Paris Agreement, countries must play their part and work together. Carbon markets can play a critical role in supporting countries to decarbonise, particularly in hard-to-abate sectors.

In October last year, Singapore and Vietnam signed an MoU to collaborate on carbon markets, aligned with Article 6 of the Paris Agreement. This puts both Singapore and Vietnam in excellent positions to capture the opportunities generated by carbon markets. We look forward to jointly implementing carbon credit generating projects in the coming year and our projects can help spur a more vibrant carbon market in the region.

Finally, Singapore and Vietnam must continue to deepen our multi-faceted connectivity in trade and investment, finance, transport, and tourism. As we seek out new opportunities in emerging fields like innovation, energy, and sustainability, we must continue the good progress we have achieved in these areas and deepen people-to-people connections.

As we commemorate this special year, I am extremely confident that Singapore and Vietnam will continue the positive momentum established in 2022. This year will see the exchange of visits between Singapore and Vietnam’s prime ministers. We look forward to the successful exchange of visits, celebration of milestones, and stronger bilateral ties with Vietnam in the years ahead.+

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