Singapore-Vietnam Economic Ties Growing Stronger Thanks to Connectivity Agreement

SINGAPORE-VIETNAM ECONOMIC TIES GROWING STRONGER THANKS TO CONNECTIVITY AGREEMENT

Singapore’s economic ties with Vietnam are growing from strength to strength. Singapore's Minister for Trade and Industry, Lim Hng Kiang, met with Vietnam’s Minister for Planning and Investment, Vo Hong Phuc, today in Ho Chi Minh City to review the Framework Agreement on Singapore-Vietnam Connectivity. The ministers expressed satisfaction with the implementation of the Agreement, with numerous initiatives being pursued across a range of areas since the Agreement was signed in Singapore last December.

The Connectivity initiative is part of a strategy by both countries to build upon each other’s strengths and competencies. Singapore and Vietnam aim to create conditions that will help accelerate Vietnam’s growth, while ensuring that Singapore is an active participant in that growth. The Agreement has spurred developments in several key areas, including:

Enhancing Private Sector Linkages

-Connectivity has set in motion collaborations between Singapore and Vietnam on mutually beneficial projects, such as the development of the Vietnam-Singapore Industrial Park II.

-Connectivity has also facilitated the approval of licenses for Neptune Orient Lines to establish a wholly-owned subsidiary providing shipping and logistics services; for Giant South Investment Pte Ltd to set up retail operations in Vietnam; and for CapitaLand Vista Joint Venture CoLtdto develop a high-rise residential estate in Ho Chi Minh City.

-With effect from September 2006, Singapore banks will enjoy an increase in Vietnamese Dong (VND) deposit taking privileges.

-To raise awareness of the economic potential in Vietnam, this year has seen four business missions by International Enterprise Singapore, two exploratory visits by the Agri-Food and Veterinary Authority, two familiarization trips by the Singapore Tourism Board for tour operators from third countries, and several seminars organized by Singapore’s agencies on the capital and healthcare markets of Vietnam.

Sharing of Public Sector Expertise

-Through Connectivity, Singapore agencies have organized various technical training and capacity building programmes for the Vietnamese in areas such as food safety and civil aviation.

-In the works are study visits for Singapore agencies to share with Vietnam our experience in developing and regulating the ICT sector, and knowledge transfer in areas such as monetary policy and reserves management.

Boosting People Flows

-Singapore’s Nanyang Technological University has signed Memorandums of Understanding with the Hanoi University of Technology and the Ho Chi Minh City University of Technology to facilitate the exchange of staff, students, information, and joint research activities.

-Singapore and Vietnam has identified ten schools each for twinning in collaborative activities, such as teacher and student exchange, joint projects and sharing of best practices.

Highlighting that Connectivity is an important platform for both countries to strengthen economic cooperation, Minister Lim urged the private sector to make use of this platform to develop and facilitate a greater flow of projects between the two countries.

Minister Lim also acknowledged that strong commitment from both sides has played a key role in the initiative’s success thus far, and added that Connectivity also shows how ASEAN economies are taking concrete steps towards closer economic integration.

With over 400 projects in Vietnam, Singapore is Vietnam’s largest investor, with more than S$12 billion in registered capital. Vietnam was Singapore's 16th largest trading partner in 2005, while Singapore was Vietnam’s 5th largest. Bilateral trade was $11 billion last year, an increase of 34% over 2004's performance. In 2005, Singapore visitor arrivals into Vietnam reached 78,000, a 50% increase from 2004, while Singapore received about 151,000 visitor arrivals from Vietnam, a 42% increase from the previous year.

Ministry of Trade and Industry
25 September 200