Singapore, Vietnam Team Up on Third-Party Projects

SINGAPORE and Vietnam have made progress on a new initiative to bring investments from third countries into their two economies, Acting Second Minister for Finance and Senior Minister of State for Foreign Affairs Raymond Lim said yesterday.

The two countries have snared four logistics projects from Japanese investors who are sold on the idea of tapping into the respective strengths of Vietnam and Singapore.

With this initial success, the partners intend to expand the initiative to target European and American investments, Mr Lim told reporters on the sidelines of the Investing In Vietnam conference.

The joint investment initiative is one of five proposals to enhance business and investment ties that Singapore and Vietnam had agreed to in March.

Under these proposals, Singapore will tap into Vietnam's rapid economic growth while Vietnam takes advantage of the Republic's connectivity to the global economy to accelerate its economic development.

For example, third-country investors could place some parts of their supply chain in Singapore and manufacture other products in Vietnam.

'We leave it to the Japanese to see how they want to distribute the value chain, but to play on the strengths of both countries, this will be the preferred approach,' Mr Lim said. By working together, both Singapore and Vietnam can offer a more comprehensive and compelling business proposition to investors in a broad range of areas, he said.

Companies which invest in Vietnam under the Singapore-Vietnam initiative may also be accorded an additional benefit: fast-tracking of their investment licences.

Singapore has suggested to Vietnam that it set up a one-stop shop to fast-track investment and business licences, Mr Lim said.

This is because red tape has been one of the problems for investors in Vietnam as they have to navigate not just national but provincial bureaucracies as well, he said.

'They are aware of this problem, but we suggested that for this particular initiative, let's try to fast-track things,' he said.

The other four areas both countries have agreed to work on are financial, information, services as well as air and sea connectivity.

Work on these areas has also begun. For example, a team from the Monetary Authority of Singapore was due to arrive in Vietnam last night to brief local officials on how the financial industry is supervised, regulated and promoted in Singapore.

In the services area, Singapore firms are also very keen on exploring opportunities in tourism, health care and education, said Mr Lim.

Singapore businessmen see many emerging opportunities in Vietnam and they want to be among the early players, he said.

This enthusiasm was apparent from the 500-strong turnout at the investment conference organised by Keppel Corp and Temasek Holdings yesterday.

Around half of the participants were from overseas, with Singaporean delegates accounting for the majority of foreign participants.

Besides Mr Lim, Minister for National Development Mah Bow Tan is also attending the two-day event.

Other high-profile participants include Temasek Holdings executive director Ho Ching, DBS Group Holdings chief executive Jackson Tai and HDB Corp chairman Ngiam Tong Dow.

In his keynote address to the conference, Vietnamese Prime Minister Phan Van Khai reaffirmed the government's commitment to economic reform and integration into the regional and global economy.

Vietnam intends to double the size of its economy in the 10 years from 2000 to 2010, he said. It is also actively negotiating to enter the World Trade Organisation, he added.

Mr Tony Chew, chairman of Del Monte Pacific, said that businessmen are looking forward to new opportunities as Vietnam opens its markets to foreign investors.

'It's a very interesting market, fast growing, and they are confident of sustaining over 7 per cent growth,' he said.

Singapore is the largest foreign investor in Vietnam, with cumulative investments of US$7.4 billion (S$12.7 billion) in 288 projects as at the end of last year.