Singapore, Vietnam to explore enhanced air services pact: PM Lee Hsien Loong

Prime Minister Lee Hsien Loong (right) meeting the Chairman of Hanoi's People Committee Nguyen Duc Chung, on March 24, 2017. ST PHOTO: JAMIE KOH

HANOI - Singapore and Vietnam will look at ways to strengthen air links between the two countries and beyond, and this will benefit business for both countries, Prime Minister Lee Hsien Loong said on Friday (March 24).

Mr Lee said he raised the issue of liberalising air services with his counterpart, Vietnam's Prime Minister Nguyen Xuan Phuc, because the volume of air traffic is growing rapidly in tandem with closer relations between the two countries.

"I made the pitch to him that we should enhance the air services agreement... because that will develop the traffic further and develop the business further. He was receptive, so we will talk to their officials. I hope we will make progress," he said.

Mr Lee was speaking to reporters on the last day of his official visit to Vietnam, which began on Tuesday.

Every year, about400,000 Vietnamese travel to Singapore and 250,000 Singaporeans travel to Vietnam, and flights between the two countries are often full. Beyond flights between both countries, he said, flights beyond the two countries - known as fifth and sixth freedom flights - should also be looked at as part of the agreement.

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The two PMs, who met on Thursday, also discussed the Trans-Pacific Partnership (TPP) and Regional Comprehensive Economic Partnership (RCEP) trade deals.

Both countries are part of the two agreements, and Mr Lee said he encouraged Vietnam to take a "forward-leaning approach" to the RCEP, which is being negotiated between the 10 Asean nations and China, India, Japan, South Korea, Australia and New Zealand.

The United States has withdrawn from the 12-nation TPP, effectively leaving the deal in limbo, but the remaining countries including Japan are trying to find a way forward for the pact.

"The TPP is important but it's not the only way of promoting trade liberalisation. The RCEP is another important path and we hope we will have a substantive RCEP," he said.

Singapore is proceeding with ratifying the TPP, while Vietnam has deferred its ratification but is watching other partners' actions, including America, he said.

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The two leaders also discussed other regional developments, including the South China Sea, which some media outlets had focused their reports on.

This was not the main focus of the visit, said Mr Lee, who added it was one of the items on the agenda that both sides covered.

Mr Lee also said there are many business opportunities in Vietnam, and economic cooperation is a major part of relations between Singapore and Vietnam. Six agreements were signed during Mr Lee's visit, including agreements to study the feasibility of an eighth Vietnam-Singapore Industrial Park and an innovation park.

Such parks make it easier for Singapore companies to do business in Vietnam, as they find the environment conducive because it is familiar and includes other Singapore companies with similar work styles, said Mr Lee. He highlighted the SC VivoCity mall in Ho Chi Minh City, which was developed by Mapletree Investments and Saigon Co.op and houses Singapore brands such as Charles and Keith, Xiao Ban - by the same company as Lao Ban beancurd, and a joint venture by NTUC FairPrice and Saigon Co.op.

"It's a way of going overseas as Singapore Inc, because it's the whole team," said Mr Lee.

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UOB was also given a in-principle approval letter from the State Bank of Vietnam to receive a banking license by June this year, and this will further promote investments from Singapore to Vietnam, he said.

Singapore and Vietnam are both moving towards digitalisation, and both PMs emphasised the importance of strengthening cooperation in the development of smart cities and applying IT in everyday life, in urban management, transport and the environment.

Mr Lee told reporters there are areas in which Singapore can can improve in, such as a digital identity, smart payments and using information technology for transport systems.

There is also a lot of room to strengthen and grow the systems the government uses to serve the public better, which is why various teams working on making Singapore a smart nation were brought together under the Prime Minister's Office this week to allow for tighter coordination between the various agencies, he added.

"You must have the right degree of centralisation to be able to make things happen and to be able to coordinate tightly," he said. "This way we'll be able to do it more efficiently and with greater results. Otherwise we are trying very hard, but we are not as tightly coordinated as we could be and it's frustrating."

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