Opportunities for deeper collaboration between S'pore & Vietnam in clean energy, smart cities and digital economy

VIETNAM offers strong growth prospects for Singapore companies especially in the clean energy, smart cities and digital economy sectors, said Minister for National Development Lawrence Wong.

Mr Wong, who was speaking at the Vietnam-Singapore Business Dialogue held at the Fairmont Hotel, noted that Singapore's economic cooperation with Vietnam has traditionally focused on manufacturing but there are opportunities emerging in a number of new growth areas.

The forum celebrates 45 years of diplomatic relations and five years of strategic partnership between the two countries.

16 Memoranda of Understanding (MOUs) were signed at the forum to further enhance strategic partnerships between Singapore and Vietnam. The signings were witnessed by Vietnamese Prime Minister Nguyen Xuan Phuc and Mr Wong.

In his speech at the event on Thursday, Mr Wong said cooperation between the two countries is strong and growing.

Singapore is Vietnam's third-largest investor and the top Asean investor with US$43 billion cumulatively invested in over 1,800 projects.

Foreign direct investment from Vietnam into Singapore increased by almost five times to S$165 million from 2008 to 2014.

Bilateral trade between the countries has also doubled over the past decade to reach S$19.8 billion in 2016.

One successful example of bilateral economic collaboration is the VietnamSingapore Industrial Park (VSIP), noted Mr Wong. The first park was established in Binh Duong province 20 years ago.

There are now multiple VSIPs across Vietnam which have attracted about US$9 billion in investments and created more than 174,000 jobs in total.

"Many Singapore companies that are in the manufacturing sector or in manufacturing-related services like logistics are already in Vietnam, and many are operating out of the VSIPs that we have established in Vietnam," the minister added.

But "Vietnam's economic potential is more than just in manufacturing", he said, highlighting three other sectors which could be of interest to Singapore firms.

First, in the clean energy sector, in particular, Singapore has expertise in liquefied natural gas (LNG) as well as renewable energy technologies like solar.

The second area is smart cities and urban solutions, Mr Wong said.

"We understand that many Vietnam city governments are keen to adopt solutions for master planning, for connectivity and traffic management, flood management and for better security control.

"These are areas which Singapore companies have some expertise in, and we look forward to seeing how our companies can contribute to the development of these smart city and urban solutions together with their Vietnamese counterparts and also with the Vietnamese government."

Thirdly, the two countries can also cooperate in the area of the digital economy. The local startup scene in Vietnam, though nascent, is growing very rapidly, Mr Wong noted.

This has attracted foreign venture capital funds and co-working spaces providers to set up in the key cities of Ho Chi Minh and Hanoi.

For instance, the Hanoi's People's Committee has plans to introduce non-cash payments and put in place cashless payment devices or systems by 2020.

"Again, this presents opportunities for companies in the fintech, e-services and e-payment space. Singapore companies could collaborate and form partnerships with Vietnamese companies such as telcos and banks to address these growing demands," added Mr Wong.

Douglas Foo, the president of the Singapore Manufacturing Federation (SMF) which co-organised the forum, said: "As Vietnam grows and urbanises, Singapore's track record in urban planning and city management will be increasingly relevant to Vietnam's needs for urban solutions.

"New opportunities for collaboration between the business people of our two countries will also arise, as Vietnam moves up the value chain, and its industrialisation extends to higher-value add activities for which our Singapore business people would like to offer our partnership to work together with the Vietnamese business people to develop and grow."