What Vietnam could learn from Singapore

Which fields should be prioritised for development by the two nations?

Michele Wee, CEO at Standard Chartered Bank Vietnam

I do see strong potential for cooperation between Singapore and Vietnam in the field of digitalisation and sustainability, continuing from themes discussed by leaders of the two nations in 2022.

The city-state can assist with the development of digital infrastructure, from data centres that store and manage digital assets to networks connecting people and businesses online. Singapore companies can also help nurture Vietnam’s talent pool, especially in roles involving science, technology, engineering, and mathematics, and instil good governance in talent management.

In return, the digitally savvy workforce can add competitive advantage for Singapore businesses operating in Vietnam. At the same time, Vietnam’s increasingly skilled workforce can help advance the nation’s manufacturing transformation, supporting Singapore manufacturers and retailers’ supply chains diversification.

Vietnam aims to become a high-income country by 2045. What can the country learn from Singapore to avoid the risk of falling into the middle-income trap?

Avoiding this trap is an ambitious target that we are fully committed to helping the government with. Vietnam’s forward-looking ambitions are noteworthy, and Singapore’s story can be something Vietnam can take reference.

As Vietnam seeks to transition to upper-middle-income status and beyond, it is imperative that its workforce gains the know-how to operate in high-value-added goods and services industries. The ability to innovate will become increasingly important as the low-hanging fruit of basic manufacturing industries is exhausted and is no longer able to continue raising the income of Vietnam’s workforce. Higher wages can be sustained only via productive activity.

In the long run, building a resilient, independent and strategically autonomous economy will be the key to Vietnam’s goal of achieving high-income status. This will require upgrading domestic manufacturing capacity to enable the country to move beyond its role as a contract manufacturer.

Vietnam also needs to fully aware of the major structural trends, bolster domestic capacity and build the resilience to meet the challenges, including climate change and geopolitics.

The signing of the Just Energy Transition Partnership has set Vietnam on a conscious and meaningful path for green growth and strengthen its important role in the global supply chain. The partnership with Singapore can value add to this agenda. Building an efficient and productive digital economy will be something which Singapore and Vietnam can partner on.

Singapore is well-known as a leading financial centre in Asia. How do you think Vietnam should develop and what can be learned from Singapore?

I think a progressive government and monetary authority will be critical. That is what we have seen in Singapore and have been seeing in Vietnam as well. The State Bank of Vietnam has been making efforts to accelerate the banking reforms over the years.

We appreciate the system stability and the effective management of the macroeconomic conditions, that helps to facilitate investment decisions, boost public’s confidence and support growth. I see the potential for partnership between Vietnam and Singapore in various financial aspects, such as anti-money laundering, green finance, digital transformation of the banking industry, capital market development, and digital asset development as Vietnam continues its banking reforms.

Singapore is one of the four tigers of Asia in economic development. Can Vietnam add to that list in the future?

There is little doubt that Vietnam has strong potential in many areas. Certainly, the opportunities for both countries to outperform in ASEAN is there. Vietnam is now a rising star in the region.

Indeed, its forward-looking aspirations as well as the government’s push for economic reform are noteworthy. From its ambitious digital transformation plan to the National Green Growth Strategy, there is no doubt that the country’s economic priorities will dovetail to new business opportunities.

For Vietnam’s agendas to succeed, financing will of course be a non-negotiable prerequisite. According to the United Nations, there is a global shortfall of $100 trillion in funding sustainable development. As a result, that is why we continue to work with governments and businesses to support sustainable economic growth and boost financial inclusion through digital solutions.