Ample room for Vietnam, Singapore to boost economic ties: experts

In 1996, Singapore's Sembcorp Industries and Vietnam's Becamex Group established the first Vietnam-Singapore Industrial Park (VSIP) on an area of 2,500 ha in the southern province of Binh Duong. (Photo:congthuong.vn)

Vietnam is still a magnet to Singaporean investors thanks to the two countries' similarities in market openness, their same direction for sustainable development, and their joining in free trade agreements (FTA), experts have said.

They said that there is huge potential for the two countries to further expand economic cooperation in the coming time.

With over 3,600 projects worth over 70 billion USD by the end of 2022, Singapore remained the largest foreign investor in Vietnam for three consecutive years, and the largest Southeast Asian investor.

In 2022, Singapore’s total investment in Vietnam reached 6.46 billion USD, accounting for 23.3% of the total amount of foreign direct investment (FDI) poured into the country.

Notably, in the first month of 2023, while FDI into Vietnam decreased by nearly 20%, Singaporean investors promptly poured 767.6 million USD into Vietnam, accounting for nearly 64% of the total newly registered capital, becoming the largest investor among 28 countries and territories that have projects licensed in Vietnam in January.

Singapore has invested in thousands of projects in Vietnam over the last 50 years. In 1996, Singapore's Sembcorp Industries and Vietnam's Becamex Group established the first Vietnam-Singapore Industrial Park (VSIP) on an area of 2,500 ha in the southern province of Binh Duong. This is an IP project that was started based on the cooperation idea of the governments of Vietnam and Singapore. So far, as many as 12 VSIPs have been taken shaped across the country, attracting a total investment of about 17 billion USD and creating more than 300,000 jobs.

With over 3,600 projects worth over 70 billion USD by the end of 2022, Singapore remains the largest foreign investor in Vietnam for three consecutive years. (Photo: VNA)

Singaporean enterprises’ investment projects in Vietnam mainly focus on processing industry, real estate, and electricity production. Most of the Singaporean projects have large-scale, including three "super projects": Bac Lieu LNG-fueled power plant project in the Mekong Delta province of Bac Lieu and Nam Hoi An resort in the central province of Quang Nam worth 4 billion USD each, and Long An I and II LNG-fueled power plant projects with a combined investment capital of 3.12 billion USD.

Vietnam is among the top 10 countries exporting goods to Singapore, with a double-digit turnover growth rate per year.

According to the Vietnam Trade Office in Singapore, the city-state is the world’s transshipment market with a total trade turnover of up to 1.2 trillion SGD (over 905 billion USD) in 2021, doubling its GDP.

Vietnam has mainly exported garments, iron, steel, copper, boilers, glass, tobacco, salt, quartz, lime, and cement to Singapore. The largest foreign currency eaners include machinery, equipment, mobile phones, components and spare parts.

Singapore is also a major crude oil importer of Vietnam. In December 2022, Vietnam’s exports of petroleum and petroleum products to Singapore increased by seven times compared to the previous month.

According to General Director of IME Vietnam Do Hoa, Singapore is a potential market for Vietnamese businesses, especially in terms of wholesale. As many experienced wholesalers around the world have headquarters in the country, Vietnamese firms should seek ways to connect and partner with wholesalers in the market.

In an article on Vietnam-Singaporean relations published recently, Singaporean Ambassador to Vietnam Jaya Ratnam highlighted the strong and sustainable development, and stable growth of the bilateral trade over the past decade.

At the regional level, Singapore and Vietnam are also like-minded partners in free trade agreements (FTA) such as the Regional Comprehensive Economic Partnership (RCEP), and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTTP), Ratnam said.

In 2023 and the following years, the two countries can strengthen economic cooperation in the digital economy and innovation, infrastructure, energy, and sustainable development, and urgently accelerate actions to meet goals related to climate change, and further strengthen cooperation in trade, investment, finance, transportation and tourism, he stressed.

According to Dr. Vo Tri Thanh, former Deputy Director of the Central Institute for Economic Management, many small businesses and entrepreneurs of Singapore are paying attention to Vietnam as an ideal launch pad for their businesses.

The average scale of Singaporean projects in Vietnam is over 23.5 million USD a project, much higher than the average size of FDI projects in Vietnam. This shows the confidence of Singaporean investors in Vietnam's macro policies, business environment and development prospects, Thanh said./.