Why Vietnam highly values its relations with Singapore

In September 2011, Truong Tan Sang made Singapore and Malaysia the destinations of his maiden overseas trip as Vietnam’s Head of State.

Tran Dai Quang

Vietnamese President Tran Dai Quang (L) with Singaporean President Tony Tan Keng Yam during Quang’s recent visit to the Lion City

Five years later, incumbent president Tran Dai Quang followed suit by choosing to visit two fellow ASEAN members, Brunei and Singapore, (from August 26 to 30), on his first foreign trip. This shows how much Hanoi values its relations with Singapore.

Though smaller than Ho Chi Minh City in terms of area and population, Singapore is an important partner for Vietnam at bilateral and regional levels.

As underlined in a joint statement issued on Tuesday (August 30), the last day of Quang’s three-day visit to Singapore, Vietnam-Singapore trade has grown steadily over the last decade, amounting to $21.6 billion, with a 10.6% increase year-on-year, in 2015.

Singapore is Vietnam’s 6th largest trading partner and its 3rd largest investor, with a total registered investment capital of approximately $38 billion.

President Quang noted that Singapore’s investments have contributed to his country’s economic growth and development. As an example, he cited the success of Vietnam-Singapore Industrial Parks scheme, which has attracted about $9 billion of investments and employed over 170,000 people across Vietnam.

The two ASEAN (Association of Southeast Asian Nations) members signed a Defence Cooperation Agreement (DCA) in 2009. In 2013, they marked the 40thanniversary of the establishment of diplomatic ties by elevating their bilateral relationship to a strategic partnership.

Furthering their bilateral cooperation was one of the key objectives of Quang’s recent state visit. On the second day of his tour, Singapore sovereign wealth fund GIC signed a memorandum of agreement to buy a 7.7% stake in Vietcombank, one of Vietnam’s biggest banks.

The deal, reportedly worth some $400 million, is GIC’s first major direct investment in a Vietnamese commercial bank. The bank, which is the 93-million-people country’s largest lender by market capitalization, is valued at $6.9 billion.

Quang’s visit also witnessed the signing of a partnership between the Singapore Business Federation and the Vietnam Chamber of Commerce and Industry. The partnership is aimed at facilitating trade and investment between the two organizations’ member firms.

To foster greater cooperation, the two Southeast Asian neighbors sought to initiate  measures such as increasing mobility of people, goods and services and connectivity through expanding the bilateral Air Services Agreement.

With regard to security and defense, building on the 2009 DCA, they agreed to continue bilateral visits and dialogues between the two defense establishments, enhance cooperation on strategic studies between research institutes and strengthen military-to-military interactions.

For Quang and his high-level delegation, which included minister of planning and investment, minister of industry and trade, and minister of education and training, the trip provided another opportunity to witness and learn from Singapore’s achievements.

Speaking at the 38th Singapore Lecture organized by the Institute of Southeast Asian Studies-Yusof Ishak Institute on Tuesday, Quang said he had traveled to the island nation many times and after every visit, Singapore had left him “with great and deep impressions” of many things, e.g. its development of smart economy and respect for the rule of law.

In fact, Quang acknowledged that Singapore’s admirable development since its foundation “is a valuable lesson” for his country “in national construction and defense.”

The aspects of Singapore’s successes that his country highly regards and pays attention to learning from, include the island nation’s policy planning and implementation, prioritizing of investments in science, technology and education and its using high-quality workforce for rapid and sustainable development.

The Vietnamese people often compare their country’s development with that of Singapore and wonder why despite its lack of natural resources, Singapore has become one of the world’s richest countries in terms of GPD per capita. They hope Quang, who is one of the four most powerful persons in Vietnamese politics, and his high-ranking delegation have learnt something from Singapore after this trip.

Shared concern over South China Sea

Besides strong incentives for strengthening bilateral cooperation, Vietnam and Singapore fundamentally converge on key regional and international matters, notably the South China Sea issue, prompting them to improve their relations.

In their joint statement, they “reaffirmed the importance of maintaining regional peace and stability and upholding freedom of navigation in and overflight above the South China Sea.”

They also “emphasized the importance of resolving disputes peacefully, including full respect for legal and diplomatic processes, without resorting to the threat or use of force, in accordance with international law, including as reflected in the 1982 United Nations Convention on the Law of the Sea (UNCLOS).”

Though phrased slightly differently, these two sentences are similar to what was put in Paragraphs 2 and 175 of the joint communique of the ASEAN Foreign Ministers’ Meeting held in Laos in July.

This shows the communist-ruled country and the city state share the same posture vis-à-vis the South China Sea issue at regional meetings, e.g. ASEAN and the ASEAN Regional Forum.

It also means though their joint statement did not mention China or the South China Sea ruling by an international arbitral tribunal on July 12, they largely oppose China’s sea view.

For instance, China has already threatened to impose an air defense identification zone (ADIZ) over the South China Sea.

In his speech on Tuesday, the first Singapore Lecture by a Vietnamese leader, Quang said: “The South China Sea, located at the heart of Southeast Asia, not only brings about many important benefits to nations in the region but it is also a vital route to maritime and air transport of the world.”

For Singapore, such an ADIZ would put its existence and development in danger because trade flow in and above the South China Sea is an economically existential issue for the island state.

The joint statement’s emphasis on “the importance of resolving disputes peacefully, including full respect for legal and diplomatic processes”, in accordance with international law, including UNCLOS, also indicates that, like the Philippines and Vietnam, Singapore implicitly supports the legal resolution, e.g. the arbitration, to the maritime disputes.

Beijing has so far forcefully rejected the arbitration and its ruling.

The call by Vietnam and Singapore for a peaceful settlement of the disputes, “without resorting to the threat or use of force” can be equally seen as a rebuke to China’s recent call for a “people’s war at sea.”

Quang warned that all the warring parties would lose if they got into any armed conflict over territorial claims in the disputed waters.

For Vietnam, the support of Singapore, a non-claimant state in the South China Sea disputes, is essential. But Beijing opposes the involvement of non-claimant countries that seek resolution of such disputes based on international law. Last month, Chinese Vice-Foreign Minister Liu Zhenmin told Singapore to stay out of the disputes.

Vietnam and Singapore seek deepening relations with the United States and its engagement in the region. Both are members of the Trans-Pacific Partnership (TPP), a US-led Free Trade Agreement. But Beijing is opposed to the US pivot to Asia and displeased with regional countries that are receptive to this re-balancing.

For instance, during a trip to the US, Singapore Prime Minister Lee Hsien Loong told American President Barack Obama that his country hoped the US would remain actively engaged in the region. His remark drew stinging criticism from Chinese public, media and academics.

Overall, Singapore and Vietnam favor a rules-based solution in the sea dispute. This shared concern and objective is the key reason why they greatly value their cooperation.

Xuan Loc Doan is a research fellow at the Global Policy Institute. He completed a PhD in International Relations at Aston University, UK, in 2013. His areas of interest and research include Vietnam’s domestic and foreign policy, ASEAN’s relations with major powers and international politics in the Asia-Pacific region.

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