Vietnam-Singapore: a model for economic integration

Shanmuga Retnam, partner, Market Access and Regulatory Affairs

Vietnam lags in research and development (R&D) and attracting the best talent, which Singapore has. The creating of hub and spoke models at provincial level could allow talent to cross over and innovate to stimulate the launch of solutions and products.

A so-called R&D visa could accelerate business creation for business owners from Singapore to tap into Vietnam’s fast-growing enterprises and pro-business local governments, who are prepared to craft deals and develop new economic clusters.

The business community from both countries is eager to exploit the low-hanging fruits of the comprehensive strategic partnership. It took 50 years for Singapore to propel from the Third World to the First World, but Vietnam is already on the fast lane of the highway and in the next 10 years will likely achieve this. The country will transform at an accelerated pace to create new global cities from Danang and Ho Chi Minh City to Haiphong and Quang Ninh.

African states have started to send young Africans to Vietnam for internships and employment in local conglomerates. The logic of this move is to establish a core team of people to support the ease of execution of African investments into Vietnam with locals who understand the culture.

Singapore’s Economic Development Board and Ministry of Education should consider a similar future talent creation strategy to build Singapore’s external economic wings as part of the bilateral strategic upgrade.

A distinct advantage are the Vietnam-Singapore Industrial Parks, which has an influence that spans all provinces in this country, and which has to be exploited more.

These parks will need to transform into innovation parks to capture a larger market share. It is time for bold and radical decision-making by both countries to uncover new possibilities instead of exploring conventional capacity building and small-scale infrastructure projects. YCH’s SuperPort is also a strong model of ASEAN integration, leveraging Vietnam’s availability of land in the north and exploiting the China+1 strategy.

Lao Cai, Haiphong, and Van Don in Quang Ninh, plus Hung Yen province, are receiving increasing interest in serving semiconductor and high-tech demands, in which Singapore has developed global connectivity.

Both governments should plan for a Vietnam-Singapore economic zone (VSEZ) in central Vietnam, based on the recent success of the Johore Singapore zone, to deepen and accelerate integration between both countries during this favourable political and business climate.

Meanwhile Danang has the ideal attributes to serve as a central hub of the VSEZ for Vietnam’s fast-growing affluent consumer segments in both the north and south. This kind of bold thinking is essential to stay competitive and generate innovative ideas – just as Singapore demonstrated with the development of Jurong Island.

Meanwhile, the mountainous provinces of northern Vietnam are home to high-demand agricultural products that remain underrepresented in global markets due to limited branding and access. Cinnamon from Lao Cai province is one such example – processed into perfumes and food ingredients, it currently serves the wholesale market, primarily in China. These products require professional branding and merchandising to reach new international markets.

Singapore, as a global trading hub, offers streamlined financing for trade. Vietnam’s processes remain more cumbersome, though they are expected to improve. However, time is of the essence.

Businesses are not inclined to wait for governments to implement new policies – they must move quickly to seize cross-border opportunities. Entry barriers remain low in Vietnam’s major cities, and local conglomerates are increasingly hiring international talent as they prepare for the next phase of growth.

PM hosts official welcome ceremony for Singaporean counterpart Prime Minister Pham Minh Chinh hosted an official welcome ceremony for visiting Singaporean PM Lawrence Wong and his spouse at the Presidential Palace in Hanoi on March 26 morning.