Nov. 8 – Vietnam’s Deputy Prime Minister Vu Van Ninh has concluded his four day visit to Singapore to discuss economic and strategic co-operation between the two countries. During his visit, Deputy PM Ninh expressed his desire for Singapore to assist Vietnam with long-term economic planning, and converting Phu Quoc Island into a special economic zone.
Discussing a broad range of issues including finance, trade and investment, transportation, defense, and education, both parties sought to bolster cooperation after elevating their bilateral ties to a strategic partnership. Singapore recently became the third ASEAN country to establish a strategic partnership with Vietnam during PM Lee Hsien Loong’s visit to the country this September.
During a working session on November 6, Singaporean Minister at the Prime Minister’s Office Grace Fu vocalized Singapore’s willingness to share its experiences with Vietnam regarding attracting, planning, and managing foreign investments in addition to developing trade. Citing the success of Singapore’s Economic Development Agency, she highlighted Singapore’s unparalleled provision of information, assistance, and incentives to foreign investors and domestic companies investing overseas.
While Singapore again ranked first in the World Banks’s “Doing Business 2014” report, Vietnam slid one spot this year to 99th place. Intended to measure the “ease of doing business” for small and medium-size enterprises, Vietnam lost ground in almost all categories besides “protecting investors” in which it improved 12 points from 169th to 157th place.
This jump is likely attributable to Vietnam’s recent improvements to its credit information system, increased investor protection through greater disclosure requirements for publicly held companies, increased minimum wage, and abolition of priority rules for redundancy dismissals or layoffs.
Minister Fu also mentioned that she believed Vietnam’s abundant natural resources and labor force would be a distinct advantage in its aspiration to diversify regional trade ties and further develop export markets. Singapore’s willingness to work closely with Vietnam during Trans-Pacific Partnership (TPP) negotiations was also discussed.
Expanding Joint Industrial Parks
Also on the agenda was the success and intended expansion of the Vietnam-Singapore Industrial Parks (VSIPs) model. Since the first park was created in 1996, VSIPs have created jobs for more than 140,000 people and attracted 490 investors from 22 countries and territories. Total investments in VSIPs are estimated to exceed US$6 billion.
This September the two countries broke ground on the fifth and newest park in Quang Ngai province, in which Singaporean Sembcorp Development Ltd owns a 92.9 percent stake. Similar to the VSIP model, Vietnam’s coastal economic zones have also allowed Vietnam to more efficiently allocate its resources and have attracted more than $30 billion from foreign and direct investment. Deputy PM Ninh’s suggestion that Singapore invest in Phu Quoc island, a popular tourist destination scheduled to become a special economic zone by 2020, may be an attempt to diversify its economic cooperation with Singapore beyond the VSIP model.
During his visit, Deputy PM Ninh was also scheduled to receive briefings from the Finance Ministry, Monetary Authority of Singapore, Casino Regulatory Authority, Temasek Holdings, and call on Prime Minister Lee Hsien Loong and Second Minister for Trade and Industry S Iswaran.
Deputy PM Ninh’s visit was facilitated by the S R Nathan Fellowship, launched in 2012 by Singapore’s former President S R Nathan to enable foreign leaders to “exchange ideas and experiences on current and long-term challenges with Singapore leaders and senior government officials.”
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.
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