photo source VGP
At last week’s international conference on “Prospects for economic co-operation between Vietnam and countries in the Middle East and Africa”, Mukhisa Kituyi, secretary general of the UN Conference on Trade and Development, said Vietnam’s joining many free trade agreements (FTAs), especially the Trans-Pacific Partnership (TPP), “has turned it into a magnet for foreign investors, including those from the Middle East and Africa.”
“Though the TPP’s details have yet to be revealed, foreign investors are rushing into Vietnam. The Middle Eastern and African investors are also keen on investment opportunities here,” he said.
The conference was attended by 22 big firms from these regions, including world-famous firms such as Kuwait Petroleum Corporation, Kuwait Petroleum International Limited, Atlantis Group Insurance, Qatar National Bank, International Golden Group, Mubadala Petroleum, and Falcon Group.
“Vietnam is an integral part of Asia’s manufacturing supply chain. Qatar has accumulated large savings that it invests abroad through its sovereign wealth fund, with a growing focus on Asia, including Vietnam,” said Rory Fyre, senior economic specialist from Qatar National Bank. “Vietnam is opening up and committed to improving the business environment as it has and will join many FTAs, notably the TPP. This will provide big opportunities to Qatari firms, thanks to the reduction of tariffs.”
Nam Sahasra, chief executive officer of Falcon Group, also sees Vietnam as a land full of investment potential, in addition to TPP benefits. He said Vietnam was an environment favourable for trade expansion, its economy was open, with a growth model based on trade as Vietnam had huge potential with various natural resources, especially minerals such as iron, ore, copper and gold, and energy like oil, natural gas, and coal.
“FTAs and the TPP will change Vietnam’s investment climate. Vietnam is shifting towards higher added value sectors such as electronics,” Shahasra said.
He noted that Vietnam’s fragile banking system represented “a market opportunity for Falcon,” which provided financial solutions for businesses. “Vietnam’s banking system remains opaque, with a high proportion of non-performing loans. Banks may need to raise provisioning, which could lead to a slowdown of lending to the private sector.”
Bakri Yousif Omer, secretary general of Sudanese Business and Employers Federation, also felt upbeat over African investments in Vietnam. “As a result of several reform measures, Vietnam’s become a major exporter of many agricultural products and electronics. We want to co-operate with Vietnamese partners in agricultural production and exports, textile and garments, oil and gas, and engineering technologies.”
According to Tran Quang Huy, head of the Ministry of Industry and Trade’s Department for African, Western Asian, and Northern Asian Markets, in order for the Middle Eastern and African investors to do business in Vietnam and benefit from upcoming FTAs, the governments should soon sign agreements on investment encouragement and protection, double taxation avoidance, banking, finance, aviation, sea transport, and energy.
The trade turnover between Vietnam and the Middle Eastern and African regions hit $15.7 billion last year. The figure reached $8.7 billion in this year’s first seven months. Vietnam currently has 158 valid investment projects from these regions, registered at $1.5 billion.
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