SPEECH

17 Aug 2004

Vietnam Investment Conference

Gala Dinner Speech by Ms Ho Ching, Executive Director & CEO of Temasek Holdings

17 Aug 04 (Tuesday) 7.00 pm

Hotel Melia Hanoi

HANOI, VIETNAM

(Duration: 15 minutes)

Your Excellency Nguyen Tan Dung, Permanent Deputy Prime Minister of Vietnam, Distinguished guests, Friends, Ladies and Gentlemen,

  • On behalf of the principal sponsors and organisers, Temasek Holdings and Keppel Corporation, as well as our co-organisers, the Ministry of Planning and Investment of Vietnam and IE Singapore, I would like to extend a very warm welcome to all of you here this evening.
     
  • I would also like to take this opportunity to thank you for your strong support of this Conference and for making it a success.

Investing in Vietnam: Insights, Strategies and Prospects

  • Today, Asia is being transformed as she opens up her economies, engages the world and improves the lives of her people. China and India will be the 2 great engines in Asia, pulling the rest of us along, and adding to the growth of USA, Europe and Japan as well. Already, we have seen the recovery of Asian economies from the aftermath of the Asian financial crisis in 1997. From China to Indonesia, from Pakistan to Korea, we see a stabilisation of inflation and interest rates, and the strengthening of their currencies, alongside with record foreign reserves the last few years. Vietnam too is very much a part of this Asian growth story.
     
  • This 2-day Vietnam Investment Conference in Hanoi provides an excellent platform to foster closer cross-border business ties. We are honoured by the presence of about 500 delegates from Vietnam, Singapore and other third countries. This timely event certainly presents a rare opportunity for the various delegates to hear many Vietnamese leaders first hand, and to see the developments and changes in Vietnam for themselves. We are indeed privileged to hear from Prime Minister Khai and other senior leaders today.
     
  • We are also very pleased to have several distinguished speakers to elaborate on the economic prospects and investment environment in Vietnam. The speakers today have already given us valuable insights on how we may participate in and contribute to the country’s next phase of growth and development. Tomorrow’s discussions will centre on various investment issues and experiences.
     
  • Clearly, much networking has also been taking place among the delegates. I am also confident that the friendships fostered at this Conference will help pave the way for future co-operation and successful partnerships.

Vietnam – An Economy Poised for Lift-Off

  • You have heard from various speakers how Vietnam has been growing rapidly. With more than 7% GDP expansion last year, it is one of the fastest growing economies in Asia today. It is expected to repeat this impressive record of over 7% both this year and the next, underpinned by strong domestic and external demand. Vietnam is clearly picking up pace from the lull of the post 1997 crisis years.
     
  • With its transition from a centrally planned economy to a market-oriented socialist economy, Vietnam has seen its private sector grow rapidly too. She has also attracted about US$3 billion of foreign direct investment last year, equivalent to about 8% of GDP.
     
  • With clarity on its policy direction in support of a free market economy, Vietnam is getting more attractive, both as a market and as an investment destination. Apart from being a major exporter of commodities like rubber, rice, tea, coffee and pepper, Vietnam is also picking up momentum as an alternate manufacturing hub in Asia. For example, Japan’s “ China + 1” strategy of diversifying its manufacturing risks will benefit Vietnam. Opportunities in the domestic infrastructure and services sector, including telecoms and financial services, will continue to ride on the increasing urbanization and prosperity.
     
  • Vietnam also has a young population of 80 million, which is very literate and highly motivated. With a median age of 25, the majority of her people are now born after the Vietnam war, with more than 30% under 14 years old. This is a generational shift. Many of her young people are learning English and are well connected with the developments of the world. They are hungry for knowledge, and keen to build a future for themselves and their country.
     
  • Vietnam’s leadership has been very impressive too. They are serious, and earnest in their commitment to take Vietnam forward as a modern society and a thriving economy. They have been working hard on various fronts to double their GDP over the 10 years. They are focused on making the business environment even more conducive for companies, including foreign ones. Further administrative and market reforms such as the planned equitisation of key State-owned Enterprises and the drafting of new Enterprise and Investment Laws are in the works. These trends and reforms are welcomed by international investors. Vietnam can easily hit 8 –10% GDP growth rates, if she puts the right policy framework in place, and improve her market and administrative environment.
     
  • These factors, coupled with the commitment to the US-Vietnam Bilateral Trade Agreement and ASEAN Free Trade Area, provide a clear path for Vietnam’s successful integration into the world economy, and its accession to the World Trade Organisation.
     
  • It was for these reasons that Temasek has supported Keppel Corporation to work with the Vietnam MPI and IE Singapore to hold this Conference here in Hanoi.

Singapore – A Friend and Business Partner

  • When planning for this Conference, we were greatly encouraged by the warm friendship between Vietnam and Singapore, fostered by visits of both government and business people between the two countries.
     
  • Singapore is a very small state, with less than 4 million population, and no resources, except the wits and resilience of our people, and our hard won experiences. We have prospered through free trade and an open market economy. We are an experiment which worked, demonstrating clearly, that the benefits of open markets and free trade outweigh potential problems and other downside issues. We have very little else to offer, except honest friendship, and a strong commitment to a peaceful, prosperous world, where everyone has an opportunity to learn, to earn a living, to raise their families and to lead fulfilling lives. What we can share as a country are the lessons of our successes and failures of more than 40 years of economic development and nation-building.
     
  • I am pleased to note that Vietnam and Singapore have identified five areas where economic ties can be further strengthened. These include: (1) financial links; (2) air and sea links; (3) information links; (4) services links; and (5) investment links. Such bilateral economic linkages underscore the growing partnership between Vietnam and Singapore. More importantly, these can be the initial steps towards multilateral linkages in an interconnected world for both Vietnam and Singapore.
    Indeed, Vietnam is the fastest growing trading partner in Asean for Singapore, growing at more than 10% compounded annually over the last 5 years. Outside Asean, only China surpassed Vietnam as the fastest growing trading partner for Singapore over the last 5 years.
     
  • Temasek-linked companies, such as The Ascott, Keppel, NOL/APL and SembCorp, have been active in Vietnam for many years, in sectors such as property, industrial park, utilities, port, and logistics. Other major Singapore investors in Vietnam include companies like Centrepoint Properties, Asia Pacific Breweries and many others, including Singapore-based MNCs. Successful international investors include global names like Fujitsu, Unilever and Canon.
     
  • Through the years of doing business in Vietnam, Singapore-based companies have built good working relationships with their Vietnamese counterparts. I am sure such relationships will continue to grow, and the business partners will continue to do business not only in Vietnam, but also expand beyond – including to Singapore and other countries.

Temasek – A Long Term Asia Investor

  • Like Vietnam, Temasek too is undergoing a generational change. Started 30 years ago, Temasek is shifting its investment stance from a Singapore-centric portfolio to a balanced global portfolio of one-third Singapore, one-third Asia outside of Japan, and one-third in the developed economies, including Japan.
     
  • In Asia, Temasek will focus on investments which mirror the growth and opportunities of the various emerging economies. These include services for the emerging middle class, transport and logistic to tap on the rapidly growing Asia trade links, as well as infrastructure to ride on Asia’s long term development needs. In addition, Temasek will seek out companies with the distinct competitive edge to scale beyond their domestic markets to go into the region or the world. We may invest in companies, or co-invest with them in third countries as they seek to expand their markets or their capacities.
     
  • Through such investments, Temasek hopes to be a long-term partner for promising companies in Asia, contributing to Asia’s growth.
     
  • Within the Temasek Asia portfolio, we hope to increase our exposure to the 3 fast growing regions of China and East Asia, India and South Asia, as well as the Asean economies. Vietnam is clearly one of the promising economies in Asean.
     
  • We certainly hope to have the opportunity to partner some of you both in Vietnam and the region, as you seek to grow your business in Vietnam and Asia.

Conclusion

  • In conclusion, I would like to thank all of you once again for taking time off to join us for this Conference. I hope you have had the opportunity to make a pitch to the Vietnamese leaders, and also explore various opportunities.
     
  • Through business partnerships, through the sharing of our experiences, and through learning from each other, I hope this conference can play a part to contribute towards a vibrant and prosperous Asia, and a successful and confident Vietnam. I have no doubt too that you will take with you knowledge and opportunities for your Vietnam strategies.
     
  • As with other similar events, there is a group of dedicated people who worked tirelessly behind the scenes to make the Conference possible. I congratulate them for a job well done.
     
  • Last but not least, a very special thank you to the Vietnamese government and their leaders for their warm hospitality and invaluable support.
     
  • I wish you all a most fruitful time in Vietnam. Thank you.