Vietnam can look to Singapore as inspiration to develop its financial centres, say experts
The two countries’ leaderships have agreed in principle to deepen bilateral ties in the coming period to a comprehensive strategic partnership
[HO CHI MINH CITY] As Vietnam is gearing up for the establishment of its financial centres, experts suggested that the country can cooperate with Singapore, known as Asia’s top financial hub, to develop a strong supply of talent to realise the ambition.
The discussion was raised during the Vietnam–Singapore Trade and Investment promotion event, which was organised by the Vietnam-Singapore Friendship Association on Tuesday (Oct 1) in Ho Chi Minh City.
Dr Tran Ngoc Tho, a member of Vietnam’s National Financial and Monetary Policy Advisory Council, said: “The supply of a high-quality workforce in technology and finance is crucial to the success of Vietnam’s financial centres, creating opportunities for collaboration with Singapore in training and education to serve such a demand for talent.”
In a government meeting on Monday, Vietnam’s Prime Minister Pham Minh Chinh urged the completion of the national programme to develop regional and international financial centres in the two metropolises of Ho Chi Minh City and Da Nang.
He underlined that the country needs to develop its own model for these centres after learning from successful hubs around the world and adopting factors suitable to Vietnam’s conditions.
Speaking in the panel discussion at the Tuesday event, Wesley Chua, a senior manager of international tax and transaction services at EY and a board member at the Singapore Chamber of Commerce Vietnam, mentioned the challenges for Vietnam to build such centres amid competition with other hubs in the region such as Hong Kong, Singapore and emerging players such as Kuala Lumpur in Malaysia.
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“A financial hub also comes with a lot of risks. We really need the authority to come in to govern, to monitor and to control,” he added. “All these (legal) basics have to be formed first before we can really say that we are ready for a financial hub.”
Dr Truong Van Phuoc, a member of the Prime Minister’s Economic Advisory Group, also highlighted several crucial areas for Vietnam to strengthen in its quest to establish a financial hub, including the liberalisation of capital account for the free movement of capital in and out of the country, liberalisation of interest rate, the convertibility of local currency, the development of derivative products, and the adoption of a floating exchange rate.
“The establishment of a world-level financial infrastructure could enhance Vietnam’s resilience and adaptability to the global economy,” he said.
Diplomatic relations
Last year, Vietnam and Singapore celebrated the 50th anniversary of diplomatic relations and the 10th anniversary of their strategic partnership.
The two countries’ leaderships have agreed in principle to deepen bilateral ties in the coming period to a comprehensive strategic partnership – the highest diplomatic tier that Vietnam only has with seven countries in the world, including global powers such as the US, China, Japan and Russia.
“The next step is to make sure that there are concrete cooperation initiatives under every pillar of the partnership,” Pang Te Cheng, Consul General of Singapore in Ho Chi Minh City, said at the event on Tuesday, expecting that the partnership could reach a new height sometime next year.
He added that joint efforts are being made to enhance the connection between the two countries, particularly in promoting collaboration in the digital and green economy.
The city-state has remained the largest foreign investor in Vietnam since 2020, pouring about US$6.9 billion or 18 per cent of the total FDI capital registered in the country in 2023 alone.
In the first eight months of this year, Singapore led with a total investment of roughly US$6.8 billion into Vietnam, up 75.5 per cent from a year ago and accounting for nearly 33.1 per cent of the total.
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