Looking back at the steps of the Lion Island
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The key to Singapore’s transformation is that this country has created a leading financial center on the continent and the world. (10% of Singapore’s GDP comes from the financial sector). Because people stay awake in Singapore when financial markets The West is asleep from the time San Francisco turns off the lights to go to sleep until Zurich wakes up in the morning. Singapore has filled the gap and provides 24/7 banking and financial services.
After coming to power in 1960, the late Prime Minister Lee Kuan Yew focused on building the fundamentals of the economy – encouraging savings and investment. . Singapore’s breakthrough in attracting foreign investment came in 1968 when Texas Instruments began manufacturing semiconductor chips in Singapore. National Semiconductors followed soon after. Hewlett-Packard is another name attracted to Singapore and General Electric established up to 6 manufacturing facilities here. By the 1980s Singapore had become a major country in the electronics export market. By 1997, there were nearly 200 American companies located here with a total investment capital of up to 19 billion USD.
< p class="MsoNormal" style="MARGIN:0 0 0">Domestically, Singapore enforces its own policy with a one-party leadership system with strict rules (punishments for small things like discharge park garbage, pulling toilet water, meetings of 5 people or more must ask for permission…). This strictness has helped the Lion Island nation become one of the countries with the lowest crime rates in the world. It is the safety and prosperity of the island nation that has attracted people from many different countries around the globe. However, population growth does not put Singapore in economic trouble, but brings development to many industries in this country. Besides, the unemployment rate in this lion island nation is only about 2%.
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In addition, identifying education as a prerequisite for economic development, Prime Minister Lee Kuan Yew issued a series of educational policies including mandatory use of English in schools. study – an extremely sensitive decision in an ethnically diverse country like Singapore. Mr. Lee Kuan Yew is steadfast in his policy because he is clearly aware that English is the language to make money and help Singapore integrate into the global economy and a diverse business-sensitive economy.
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Even though there are different comments from outside the world The world must recognize them as a clean country. In a real sense it is a clean and green environment. In a broad sense, it is a civilized, disciplined life and the level of corruption ranks among the lowest in the world. Here in Singapore there are many ethnic groups (Chinese Indian Malay) many religions (Confucian Christian Hindu Muslim) but the society is stable, everyone coexists together and together brings the country to rapid development. span style=”mso-spacerun:yes”> become an Asian Dragon achieving the world’s leading living standards – longevity and income.
What Vietnam learns ?
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Journey to reach Singapore’s rise to become an Asian dragon in just 30 years has left many countries in the region with valuable lessons, including Vietnam. So how will we apply those lessons in this new period.
About banking activities
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To execute Successfully industrializing and modernizing the Government should soon have a healthy legal framework for the financial system, an effective legal framework and supervision mechanism to support the domestic banking system like Singapore.
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Building a banking system with great potential strong force to quickly diversify forms of capital mobilization along with promoting financial market development to clear domestic capital while attracting foreign capital to meet capital and technology for the industrialization process. . In addition, the Government needs to have measures to synchronously open up, reduce tariffs, and preferential credit policies… to improve credit quality.
Timely intervention of the Government is needed in the banking system to expand credit and implement preferential policies. preferential interest rates for priority export-oriented industrial products to create motivation for economic restructuring. The issue of interest rate support for credit requires an appropriate action program with specific targets and the experience of countries that need to have a strict credit control regime to avoid the risk of failure. capital exit.
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However, if the intervention Excessive government intervention in banking activities will become constrained and lacking in flexibility, causing difficulties for banks in the process of international integration. Synchronously combine the revision of the legal system with a series of adjustments in economic environment policies and administrative reforms to open the door for foreign banks to invest and remove all restrictions on ownership of the above mentioned forms of operations. both mobilize and transact with deposit partners in VND and establish bank branches in localities; Expand the provision of high-end services, customer care services, non-cash payment services… in which it is necessary to research to increase the ownership ratio of foreign shareholders investing in commercial banks. Vietnam trade (over 30%) to attract indirect investment capital from foreign countries into Vietnam’s financial market.
Main public finance book
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For public finance, Vietnam can learn some of the following lessons from Singapore: Fight against corruption, waste, and waste drastically and effectively in all areas of socio-economic activities and arbitrary spending of public funds. The state cannot help but be a measure to make the state budget healthy in the current conditions.
Focus more on the private economic sector instead of putting too much capital into SOEs. Singapore is a typical example of focusing on the private economy when their stimulus package worth 20,5 billion SGD spent up to 8,4 billion for this business sector. To properly use national assets, neighboring Singapore has established an investment company business Temasek state capital in 1974.
Recently, Vietnam has also established a state capital investment and business corporation (SCIC) with a charter capital of up to 15,000 billion. Looking at the success of Temasek, the “father” in Singapore’s development, there is a huge lesson for Vietnam. In his speech, Singapore’s Minister of Industry and Trade once said: “One of the fatal illusions that many third world countries harbor is the notion that politicians and bureaucrats can successfully undertake business roles. Even when faced with the exact opposite reality, it is even more strange that people still believe in that illusion.” Since then, an experience in Vietnam’s state capital management is that to effectively utilize this huge amount of money, it is necessary to have a team of leading experts, not politicians and officials with “civil servant” minds and their “orders” “MARGIN:0 0 0″>Foreign trade development policy
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Singapore already has a Very smart export strategy with a clear roadmap from exporting mineral raw materials to exporting products with large labor content and finally exporting products with high technology content. Vietnam is currently on the path of exporting raw materials (accounting for nearly 40% of GDP) and increasing the export of items with large labor content such as textiles and garments and agricultural and aquatic products.
However, Vietnamese textiles and garments are still mainly (accounting for more than 70%) while the export rate of FOB goods (purchase of raw materials for semi-finished products) is low, accounting for only 30% of exports. The issue of structural change in textile and garment exports is the top goal of the government and textile enterprises in Vietnam. To promote the growth of textile and garment exports, the first issue that the government needs to pay attention to is strengthening the construction of supporting industries and supporting the import of inputs to create conditions to gradually reduce costs for businesses. Improve the quantity and quality of FOB goods and reduce processing rates.
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In addition, it is necessary to mention the new direction in exporting which is software outsourcing. Although this is a field that uses high technology in Vietnam, it is still very young, but nonetheless it is the first step for us to have an appropriate development direction in the future.
Exchange rate policy
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Singapore’s journey to become an Asian dragon in just 30 years has left many countries in the region with valuable lessons, including Vietnam. |
With a tight monetary policy in the country, Vietnam can still avoid tensions. worthy of other countries to increase Vietnam’s position in the international arena. As for the need to promote exports to create capital for short-term economic growth, Vietnam can use a number of export subsidy policies to create conditions for domestic enterprises to develop. This is also the policy that Singapore has applied very successfully and achieved outstanding growth
Expanding the contact market commercial advancement
For many recent decades, Singapore has paid great attention to trade promotion to diversify markets and Singapore companies to expand into unexplored markets. The role of Singapore’s trade promotion belongs to the Singapore Trade Development Board (TDB), which is responsible for promoting international foreign trade while protecting the interests of this island nation.
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Vietnam needs to focus on strengthening trade relationships with other markets in the immediate future. Large markets such as America, Japan, Europe and China. These are partners that help Vietnam consume export products and bring basic benefits such as ODA FDI capital and technology transfer. Besides, finding other potential markets also needs attention.
It can be seen that Singapore has risen from a third world country to a first world country. During its development, Singapore has left behind many valuable lessons. These lessons are very useful and can be applied to Vietnamese practice because Vietnam and Singapore have many similarities.
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According to Bui Ngoc Son (World Institute of Political Economy)
Business Forum
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