Singapore – Market of 5,000 Economic Groups

Such is the remark on Singapore by Mr Dao Trong Nhan, Head of Asia-Pacific Department, Ministry of Industry and Trade, during an interview with Vietnam Business Forum concerning potential and strength of Singapore for economic cooperation with the Vietnam business community.

What do you mean by your remark?

Singapore is the most developed market economy among ASEAN. It has also the most developed infrastructure and industries in Asia and the world such as seaport, ship-building, oil refinery, processing and assembly of modern equipment. It is leading in computer discs and parts, oil refinery, maritime transport and is transforming into a knowledge-based economy. The advantage in location makes Singapore the bridge head for economic integration in the region and the Pacific. As a result, many economic groups have set up offices in Singapore including those of distant Nordic countries and America. In their economic cooperation with Singapore, Vietnamese businesses must consider it as a mainstay because through Singapore they can cooperate with big corporations of the world saving both time and money.

Is there any legal framework for the cooperation of the two business communities?

On October 23, 2009, Prime Minister Nguyen Tan Dung met with Prime Minister Lee Hsien Loong. The two sides were happy to take note of the fine development of friendship and all-round cooperation. The relationship between leaders of the two countries have been strengthened with the exchange of visits including the forthcoming visit of President Nguyen Minh Triet on the occasion of the APEC Summit and the visit of Prime Minister Lee Hsien Loong in early 2010. The two Prime Ministers also agreed on measures to deepen and enhance bilateral relations by a framework agreement on six areas: education, finance, IT and telecom, investment, trade and service, and transport. On the basis of the framework agreement, two governments and business communities can develop to their fullest potentials and advantages in trade and investment for their mutual interests.

How extensive will be the trade and investment of the two countries?

First, looking at the statistics, trade is quite big. In 2008, the two-way trade value was US$12 billion, up by 23 percent (Vietnamese export worth US$2.66 billion, up by 20.8 percent). In the first nine months of 2009, in spite of the world economic crisis, the two-way trade value remained significant.

According to world leading economists, Singapore has the most liberal trade policy namely:

- Paperless trading: By means of TradeNet, Singapore has revolutionized trade, import-export formalities, facilitating commercial activities.

- Automatic license system TDB in conjunction with other related authorities such as IDA (development agency) and RPI (radio-active inspection) operate automatic license system. Consequently, Singaporean traders can receive an import-export license in 1-3 minutes, day and night.

– Online certificate of origin (CO): Singaporean traders can get online CO from one of the four offices of electronic CO system (ECO). Businesses with good record can submit annual declaration instead of declaration for each CO, saving time and money.

– Online financing and trade insurance: Trade financial system (TFS) is initiated by TDB and related organizations to help businesses by means of Internet get letters of credits (LC) from banks.

However, in addition to those advantages, Vietnamese businesses must also be aware of the trade barriers of Singapore. Vietnamese exports are strong in agricultural produce such as fruit, seafood, rice, and wooden furniture. Those products are in fierce competition with those from Malaysia, a neighbour with a close relationship with Singapore. Singapore has a series of big supermarkets such as Cold Storage, Seven-Eleven, and Giant. Once Vietnamese products can get into Singapore with stringent standards on food safety, they can get to any market in the world.

Which areas will Singapore invest in Vietnam in the future?

Unlike other countries in the world, Singapore government acts as an advanced party, backing and opening up opportunities for their businesses. I believe that in the future, Singapore will invest in maritime transport, building seaports and storages, the strong points of Singapore. They will also invest in other areas as Tower Ship real estate project (modern urban area), finance and banking.

Posted by VBN on Nov 11 2009. Filed under Int'l Cooperation. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry