SINGAPORE - Singapore and Vietnam are now strategic partners, a move that paves the way for deeper economic ties in areas such as air traffic and financial services, Prime Minister Lee Hsien Loong said ON Wednesday.
He said Singapore banks are already keen to expand into Vietnam's finance sector, long dominated by state-owned banks.
PM Lee, who arrived here on an official visit on Wednesday, formally upgraded bilateral ties to a strategic partnership with his Vietnamese counterpart Nguyen Tan Dung. This is only the Republic's third such partnership following similar agreements with the United States and France.
Following an hour-long discussion between the two leaders at the Grand Hall in Hanoi's Office of Government, Mr Lee spoke of how the strategic partnership will "provide the framework for continued high-level exchanges".
These cover broad areas such as political ties, international relations, defence, security and training. But economic links, characterised by the four existing Vietnam-Singapore Industrial Parks (VSIPs), are still the cornerstone of bilateral ties.
Singapore is Vietnam's second-largest investor, and with a fifth VSIP to be launched tomorrow, Mr Lee said there is potential to do more.
"We have envisaged progress in air services, we can increase air traffic between our countries, and also from our countries to the rest of the world," Mr Lee told the media.
On the cards are a further liberalisation of air services, in order to support growing links in tourism, trade and investment.
In financial services, Mr Lee said "Singapore will be happy to provide technical assistance to Vietnamese officials, while Singapore banks hope to set up subsidiaries here and contribute to Vietnam's financial sector".
Vietnam's banking system has recently been battered by bad loans that have curbed lending. But there is still much promise for the country with more than half of its 88 million population under the age of 30.
PM Dung, who noted that his government would support the expansion of Singapore banks here, paid tribute to the Republic's contributions in trade and investment.
"The effective economic cooperation with Singapore has contributed remarkably to the achievements recorded in Vietnam's economic reform," he said during an official dinner he hosted for Mr Lee on Wednesday night.
In the area of defence, both countries have agreed to step up military and training exchanges. For a start, both navies signed a memorandum of understanding on submarine rescue last week.
In politics, direct communications between the two leaders will be established, while there will also be increased exchanges between government agencies.
On the ongoing territorial dispute in the South China Sea between China and four ASEAN member states including Vietnam, Mr Lee said it "should be handled with restraint, peacefully in accordance with international law", and that ASEAN should "exert a constructive influence".
Mr Lee, who would be here until Friday, was greeted at the Presidential Palace by Mr Dung on Wednesday, with 200 personnel from Vietnam's armed forces forming an honour guard.
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