Vietnam and Singapore are intensifying their bilateral ties in new fields with focus set on innovation, energy, and sustainability. Jaya Ratnam, Singaporean Ambassador to Vietnam, provides analysis on how this cooperation has been implemented and benefited the two countries.

As we celebrate Singapore’s 58th National Day this month, we also commemorate two important milestones for our relations. August 1 marks 50 years since Singapore and Vietnam established diplomatic relations, and 10 years since we established our strategic partnership. Over the course of these decades, our bilateral relations have grown tremendously, and I have every confidence that they will continue to grow into the future.

The foundations of the relationship were built on strong mutual trust between our leaders, beginning in 1991 when the late Prime Minister Vo Van Kiet asked Lee Kuan Yew to advise Vietnam on opening up its economy. This marked the beginning of close personal relationships between successive generations of our leaders.

Today, our leaders meet regularly and enjoy excellent rapport. Prime Minister Pham Minh Chinh made a successful official visit to Singapore in February this year, and we look forward to reciprocating with a visit by Prime Minister Lee Hsien Loong to Vietnam very soon. We exchanged state visits in 2022, and Singaporean President Halimah Yacob also had an excellent introductory meeting with Vietnamese State President Vo Van Thuong recently in London.

Ties intensified

Deep economic cooperation has made our relationship mutually beneficial and will remain the cornerstone of our bilateral relations. The Vietnam-Singapore Industrial Parks (VSIPs) across Vietnam are emblematic symbols of this cooperation. There are now 14 VSIPs across 10 provinces, attracting $18.4 billion of capital and creating around 300,000 jobs. They have contributed substantially to Vietnam’s manufacturing and export sectors.

More broadly, we have developed longstanding and unique institutionalised frameworks for cooperation. The Singapore-Vietnam Connectivity Framework Agreement, which was launched in 2006, provides a platform where our economic ministries, and their associated agencies, coordinate positions, give direction and monitor progress on strengthening our cooperation further.

In keeping with our broadening bilateral agenda, the agreement has expanded to include discussions in new growth areas of innovation, energy, and digitalisation. Underpinning these developments is Vietnam’s consistent strong economic performance and rapid growth since the mid-1980s, which has made Singaporean businesses confident in Vietnam’s long-term economic prospects.

As a signal of this confidence in Vietnam’s future, Singapore has become Vietnam’s top source of foreign investment since 2020. As of December 2022, Singapore was Vietnam’s second-largest foreign investor, with cumulative investment of $70.8 billion. The seventh Singapore Regional Business Forum was held in Hanoi in July. This was the first time it had been held outside Singapore and reflects Vietnam’s immense economic potential and our long-term partnership.

The choice also reflects the sentiments of the Singapore Business Federation’s National Business Survey, where Vietnam was ranked one of the top three countries for overseas expansion by Singapore companies in the short term.

The forum was a tremendous success, attended by over 800 business leaders, senior government officials, and diplomats from more than 500 companies and organisations across over 30 countries and economies.

Wider prospects

There are many opportunities to work together, particularly in the digital economy, renewable energy, carbon credits, cybersecurity, and sustainable infrastructure. When PM Chinh visited Singapore in February, both countries agreed to embark on the Green-Digital Economic Partnership. This is an umbrella framework which upgrades our bilateral relationship to focus on energy, sustainability, infrastructure, digital economy, and innovation. This will not only support the green and digital aspirations of both our countries, but also allow our cooperation to serve as a pathfinder in ASEAN.

There are three areas where Singapore and Vietnam are looking to work together to seize the opportunities of the next decade and deepen our cooperation. The first area is innovation. Singapore and Vietnam are among the top three startup ecosystems in Southeast Asia. With our common goal of driving growth through tech and innovation, there is scope for Singapore and Vietnam to tap on each other’s innovation ecosystems for partnerships, funding, and talent.

Innovation has gained momentum through two areas. First is BLOCK71 Saigon, a collaboration between the National University of Singapore Enterprise and Vietnam’s Becamex IDC, which has nurtured more than 1,000 startups, incubators, and accelerators since 2011. The second is the Global Innovation Alliance node in Ho Chi Minh City, where Enterprise Singapore partnered with Saigon Innovation Hub and Quest Ventures to facilitate the exchange of startups between both countries.

In December 2022, Singapore’s Ministry of Trade and Industry and Vietnam’s National Innovation Centre (NIC) signed an MoU on the establishment of the Singapore-Vietnam Innovation Workgroup to connect innovation ecosystems between Singapore and Vietnam. The NIC has also signed MoUs with several Singapore Institutes of Higher Learning and corporates like UOB and Keppel to foster closer partnerships.

The second general aspect is energy connectivity. Singapore and Vietnam share a common vision of achieving net-zero by 2050. The scaling up of renewable energy and development of regional power grids will not only support our individual decarbonisation efforts, but also promote greater infrastructural connectivity to help advance the region’s sustainable energy goals.

Together with a power integration project involving Laos, Thailand, Malaysia, and Singapore, collaborations with Vietnam will contribute to the greater ASEAN Power Grid vision. The energy cooperation MoU signed in October 2022 between Singapore and Vietnam has paved the way for both sides to explore closer collaboration in areas such as renewable energy development, cross-border electricity trading, liquefied natural gas and electricity markets, low-carbon as well as energy efficiency solutions. This will open up more platforms and opportunities for businesses to form partnerships.

The final area is sustainability. We urgently need to accelerate climate action to meet the goals of the Paris Agreement. Carbon markets can play a critical role in supporting countries’ decarbonisation, particularly in hard-to-abate sectors. In October 2022, Singapore and Vietnam signed an MoU to collaborate on carbon credits, aligned with Article 6 of the Paris Agreement. This puts both Singapore and Vietnam in an excellent position to capture the opportunities generated by carbon markets.

As we look forward, the future for Singapore-Vietnam relations is bright and full of promise. But, to ensure this, we will need to continue building strong people-to-people relations. It is for this reason that we will conclude our celebrations this year with an event called Spotlight Singapore in Vietnam. This will bring more than 200 artists and young entrepreneurs from Singapore to Hanoi and Ho Chi Minh City to participate in a series of cultural, sports, and business events on October 19-25.

It is only through such networks of friendship that we will continue to sustain and grow our relations in the coming decades.

Vietnam Investment Review