Vietnam PM’s visit to Singapore: Forging a new partnership of mutual prosperity

The 50th anniversary of the establishment of diplomatic relations between Vietnam and Singapore, major players in ASEAN, is poised to further elevate Vietnam-Singapore relations during the February 8-10 visit of Vietnamese Prime Minister Pham Minh Chinh to the island state. The visit, which also marks the 10th anniversary of the Vietnam-Singapore Strategic Partnership, will be keenly watched in the region as closer relations between two member countries of the Association of Southeast Asian Nations will have a positive impact on the region’s economic fortunes and stability.

The talks between the leaders of Singapore and Vietnam will usher in a new phase of partnership in which technology, innovation, green growth and sustainable development will play a bigger role. In an interview ahead of the visit, Singaporean Ambassador to Vietnam Jaya Ratnam underlined that the Vietnam PM’s visit will help in developing “a green and digital partnership.”

“Collaboration in renewable energy, sustainable infrastructure, carbon credits and green financing will enable us both to achieve our goals in the upcoming green energy transition,” he stressed. “The new areas of collaboration provide the basis for developing a green and digital partnership that will shape up our bilateral relations for the coming decades,” he added. In days to come, technology and innovation will propel Vietnam-Singapore relations to new heights.

Trade and investment

The Vietnamese PM’s visit is also expected to culminate in new steps to scale up trade and investment between the two key economies of ASEAN. Singapore has been Vietnam’s top source of foreign investment since 2020. “This reflected investors’ strong confidence in Vietnam’s strong economic fundamentals and prospects. Despite the tense geopolitical context and economic headwinds, Vietnam is recording impressive post-pandemic recovery,” said Singaporean Ambassador to Vietnam Jaya Ratnam “It is a partnership wherein Vietnam and Singapore companies complement each other and constantly seek to improve so that they meet the evolving needs of both sides”, he added.

The growing economic relationship is underpinned by Vietnam-Singapore Industrial Parks (VSIPs), which has attracted 16.2 billion USD in investments and created over 300,000 jobs in Vietnam so far. Industrial parks across the country have attracted 588 projects by Singaporean investors with total registered capital of about 19.3 billion USD as of the end of 2021.

Bilateral trade is on an upward trajectory. The pandemic has failed to dampen enthusiasm for trade: total trade between the two countries reached 8.3 billion USD in 2021.

Singapore is currently Vietnam’s largest investor in ASEAN. As of February 2022, Singapore has 2,860 valid projects in Vietnam with a total registered capital of 66 billion USD. Singapore has investment projects in 51 provinces and cities across Vietnam, focusing on the processing, manufacturing, real estate, production and distribution of electricity, gas, water, and air conditioners. Singaporean investors also invested in building infrastructure for 13 industrial parks in Vietnam

Vietnam has 118 investment projects in Singapore, with total registered capital of 498 million USD. Investments are concentrated in areas of science and technology, wholesale and retail, repair of cars and motorbikes, information and communication, manufacturing and processing industry, and administrative activities and services in support of real estate business activities.

South China Sea/Freedom of Navigation

Besides boosting economic partnership, the visit of Vietnam’s PM to Singapore is also expected to enhance strategic coordination in promoting freedom of navigation in South China Sea against the backdrop of Chinese activities in the disputed water body. In this regard, Singapore should join like-minded countries like India to support Vietnam’s concerns over South China Sea and pressure China to comply with international law, not to use force, or threaten to use force to settle disputes in the East Sea. Looking ahead, ASEAN should unite and strengthen cooperation with its partners, including India, to maintain and ensure freedom of navigation and overflight in the East Sea, and to promote peace and stability in the region.

On the East Sea issue, PM Chinh has underlined that Singapore work closely with Vietnam and ASEAN member states to maintain peace and stability in the region. PM Chinh has pitched for closer cooperation with Singapore to ensure peace, safety, maritime and aviation freedom in the East Sea, strive to fully abide by the Declaration on the Conduct of Parties in the East Sea (DOC) while promoting the finalization of an effective, efficient and practical Code of Conduct in the East Sea (COC) in line with international law, including the 1982 United Nations Convention on the Law of the Sea. Earlier this month, former Singaporean foreign minister George Yeo said, “We are … in a great transition to a multipolar world which will define this century. This transition will not be smooth.”

Multilateral cooperation

Moving beyond trade and investment, Singapore and Vietnam, ardent proponents of multilateralism, are set to deepen their cooperation in the multilateral arena. Cooperation between the two countries helps in promoting ASEAN unity and solidarity. Enhancing Singapore-Vietnam cooperation will help boost economic recovery in ASEAN, which is on the brink of a recession. Prime Minister Chinh has underlined the importance of ASEAN solidarity in a conflicted international landscape. The more difficulties and challenges ASEAN faces, the more it needs to promote the spirit of “community thinking, community action,” standing shoulder to shoulder, self-reliant and proactive, to meet any challenge, said Prime Minister Chinh.

Vietnam and Singapore have closely coordinated and supported each other at regional and international organisations such as the United Nations, ASEAN and APEC. The two countries are proactively collaborating in building a strong and united ASEAN Community as well as promoting the association’s central role and common voice in regional and international issues.

The Road Ahead

As members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP), Vietnam and Singapore coordinating to reap the benefits from the new-generation free trade agreements, support the multilateral trading system, and contribute to the post-pandemic economic recovery of the region.
The visit of Vietnam’s PM to the vibrant island state will provide a new momentum to multi-dimensional partnership between the two countries. It will further consolidate Vietnam-Singapore relations, which have become a model of cooperation among ASEAN countries. In particular, Singapore and Vietnam are expected to promote the progress of digital transformation with the foundation of important technology deals.

(Manish Chand is CEO-Editor-in-Chief, India Writes Network, and India and The World magazine. He is Director, Centre for Global Insights India, a think tank focused on global affairs)

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Manish Chand

Manish Chand is Founder-CEO and Editor-in-Chief of India Writes Network (www.indiawrites.org) and India and World, a pioneering magazine focused on international affairs. He is CEO/Director of TGII Media Private Limited, an India-based media, publishing, research and consultancy company.