Friday 13 September 2013

S'pore and Vietnam take ties to new heights

Strategic partnership to pave way for deeper economic relations: PM Lee
By Terrence Voon, The Straits Times, 12 Sep 2013

SINGAPORE and Vietnam are now strategic partners, a move that paves the way for deeper economic ties in areas such as air traffic and financial services, Prime Minister Lee Hsien Loong said yesterday.

He said Singapore banks are already keen to expand into Vietnam's finance sector, long dominated by state-owned banks.

PM Lee, who arrived here on an official visit yesterday, formally upgraded bilateral ties to a strategic partnership with his Vietnamese counterpart Nguyen Tan Dung. This is only the Republic's third such partnership following similar agreements with the United States and France.

Following an hour-long discussion between the two leaders at the Grand Hall in Hanoi's Office of Government, Mr Lee spoke of how the strategic partnership will "provide the framework for continued high-level exchanges".

These cover broad areas such as political ties, international relations, defence, security and training. But economic links, characterised by the four existing Vietnam-Singapore Industrial Parks (VSIPs), are still the cornerstone of bilateral ties.

Singapore is Vietnam's second-largest investor, and with a fifth VSIP to be launched tomorrow, Mr Lee said there is potential to do more.

"We have envisaged progress in air services, we can increase air traffic between our countries, and also from our countries to the rest of the world," Mr Lee told the media. On the cards are a further liberalisation of air services, in order to support growing links in tourism, trade and investment.

In financial services, Mr Lee said "Singapore will be happy to provide technical assistance to Vietnamese officials, while Singapore banks hope to set up subsidiaries here and contribute to Vietnam's financial sector".

Vietnam's banking system has recently been battered by bad loans that have curbed lending. But there is still much promise for the country with more than half of its 88 million population under the age of 30.

PM Dung, who noted that his government would support the expansion of Singapore banks here, paid tribute to the Republic's contributions in trade and investment. "The effective economic cooperation with Singapore has contributed remarkably to the achievements recorded in Vietnam's economic reform," he said during an official dinner he hosted for Mr Lee last night.

In the area of defence, both countries have agreed to step up military and training exchanges. For a start, both navies signed a memorandum of understanding on submarine rescue last week.

In politics, direct communications between the two leaders will be established, while there will also be increased exchanges between government agencies.

On the ongoing territorial dispute in the South China Sea between China and four Asean member states including Vietnam, Mr Lee said it "should be handled with restraint, peacefully in accordance with international law", and that Asean should "exert a constructive influence".

Mr Lee, who will be here until tomorrow, was greeted at the Presidential Palace by Mr Dung yesterday, with 200 personnel from Vietnam's armed forces forming an honour guard.

S'pore seeks to be part of Vietnam's growth: PM
Joint industrial parks reflect S'pore's confidence in country's economy
By Terrence Voon, The Straits Times, 14 Sep 2013

VIETNAM is a country on the move, and Singapore wants to be part of its growth, Prime Minister Lee Hsien Loong said yesterday, as he put a spade in the sand for the fifth industrial park by both countries.

The Vietnam-Singapore Industrial Parks (VSIPs) are a "concrete symbol" of ties between the two countries, he added, and they have attracted over US$6 billion (S$7.6 billion) worth of investments from nearly 500 companies since the first one was launched in 1996.

The parks are a joint venture between a Singapore consortium led by Sembcorp Development and state-owned Vietnamese enterprise Becamex. They are seen as growth drivers in Vietnam, having reeled in about US$6 million a hectare - nearly double the national average.

"We have confidence in the economy, in the country - it's got a lot of energy and drive," PM Lee told reporters after the ground- breaking ceremony.

"You can sense it in the cities, even in the rural areas. We've talked to the officials, you see the people - they are hungry, they are bright, their country is on the move."

The fifth VSIP is in Quang Ngai province in central Vietnam.

It comprises a 600ha industrial park and a nearby 520ha site zoned for commercial and residential purposes. More than US$337 million will be spent on the project, which already has three companies pledging to invest US$115 million.

The VSIPs "have played a small part in Vietnam's growth and transformation", Mr Lee said yesterday.

They also showcase the natural synergy between Singapore and Vietnam, bringing together Vietnam's vast industrial land and manpower resources, and the Republic's experience with industrial park management and integrated urban infrastructure solutions.

There are plans to explore a sixth and even a seventh VSIP, said Sembcorp Development's chief executive Kelvin Teo.

Quang Ngai, an hour's flight from the capital Hanoi, was the last stop of Mr Lee's three-day visit to Vietnam. His trip, which coincided with the 40th anniversary of diplomatic ties, made front-page news in Vietnam over several days.

PM Lee formally launched a strategic partnership agreement with his Vietnamese counterpart Nguyen Tan Dung on Wednesday, and held talks with other top leaders, including President Truong Tan Sang and Communist Party of Vietnam General Secretary Nguyen Phu Trong.

The discussions were fruitful, said Mr Lee, who saw first-hand the potential which Vietnam offers.

"The Vietnam economy is growing steadily, their middle class is expanding, their purchasing power is growing," he added.

Supermarket chain FairPrice recently entered the market, while shoe retailer Charles and Keith has a presence, along with Singapore hoteliers and logistics companies.

There are also investment opportunities in sectors such as water, power and environmental management, said Mr Lee. Singapore is looking into partnerships in these areas with other Vietnamese state-owned enterprises.

Some of these firms could be restructured under Vietnam's plan to reform its economy, which is experiencing slower growth as a result of its ailing banks.

But opportunities abound in a country which could soon join the Trans-Pacific Partnership, a multilateral free trade deal involving players such as the United States and Singapore.

Said Mr Lee: "I think (Vietnam) will grow, and I think we should be part of that growth."

Singapore in good position to tap Vietnam's industries: Grace Fu
By S Ramesh, Channel NewsAsia, 12 Sep 2013

Singapore sees challenges and opportunities in moving forward the Strategic Partnership Agreement with Vietnam.

These are in the areas of political, economic and people-to-people ties, said Ms Grace Fu, Minister in the Prime Minister's Office and Second Minister for Foreign Affairs.

Ms Fu, who is in Prime Minister Lee Hsien Loong's delegation to Vietnam, added that Singapore is in a good position to tap Vietnam's industries especially as Vietnam has links to other countries through its various free trade agreements.

There have been many high-level exchanges between Singapore and Vietnam at the leaders' level.

And Ms Fu said Singapore would like to keep up the momentum under the strategic partnership, an agreement that paves the way for new areas of economic cooperation including in the banking sector.

She said: "They would like to seek our help in having a more robust regulatory framework. They recognise that's our strength. We are very happy to share whatever experiences we have.

"That is a good starting point for us to help build a stronger banking system that would be important to the health of the Vietnamese economy."

The minister notes that Vietnam has gone through a difficult period of time with its fiscal policies as well as its currency management.

"They have recognised the problem. They want to arrest and rectify the problem and they are taking concrete steps to build a stronger governance structure," said Ms Fu.

Singapore is Vietnam's second largest investor.

As for trade, Singapore is Vietnam's seventh largest trading partner.

Prime Minister Lee noted during his bilateral discussions with Vietnamese leaders that two-way trade has tripled over the past decade to almost US$12 billion last year.

Another area of cooperation that is set to grow under the Singapore-Vietnam Strategic Partnership is people-to-people ties, through growth in the aviation and education sectors.

Ms Fu said Vietnam is a very important country involved in the Singapore Cooperation Programme since it started in 1992.

Close to 14,000 Vietnamese officials have received different forms of training under this programme.

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