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Last updated: Thursday, December 13, 2018


40 Years of Vietnam-Spain Cooperation: Going from Strength to Strength

Posted: Thursday, November 09, 2017

“The 40th anniversary offers Vietnam and Spain an opportunity to reflect on the evolution of Spain-Vietnam relations and consider new ideas and initiatives to strengthen, enrich and deepen our future”, expressed Spanish Consul General in Ho Chi Minh City Alejandro Dominguez Herrera in an interview with Vietnam Business Forum. Le Phuong reports.

How do you evaluate trade and investment cooperation relations between Vietnam and Spain in the last 40 years?
First, I would like to convey my best wishes to Vietnam today’s readers for the recent 72nd Anniversary of Vietnam’s Independence. It is inspiring to see the successes of Vietnam in social and economic spheres. It has achieved impressive growth rates, reduced poverty level and now has a real prospect of becoming a middle-income country in the near future. I believe that further development of trade and economic ties between Spain and Vietnam will both contribute to economic progress of Vietnam and make a positive impact on Spain economy as well.

It was on May 23 1977 – two years after Vietnam's reunification - that diplomatic relations were established between us. Twenty years later, on December 1997, Spain opened the first embassy in Hanoi and the Economic and Trade Office in Ho Chi Minh City. Lastly, on June 2012, Vietnam opened their diplomatic office in Madrid, Spain.

Since then, bilateral ties between our two nations have been close, cordial and warm; encompassing political, trade, economy, defence and culture.

The signature of the agreement entitled - Forward Looking Strategic Partnership –on 2009 marked an important milestone in bilateral ties and helped enhancing mutual political trust, while created a comprehensive and specific framework to boost the multifaceted cooperation between Spain and Vietnam.

At the moment, despite the world economy’s slowdown, trade and investment between the two countries increase every year. Spain is currently the sixth biggest European trade partner of Vietnam, there are aprox. 50 businesses from Spain operating in the country, we are running 35 projects worth 36 million USD in Vietnam in infrastructure development, renewable energy, water supply, waste management, heritage conservation, tourism, and gender equality. The annual increase of 15-20 percent in two-way trade in recent years indicates the huge potential of Vietnam-Spain cooperation. Trade revenue has been surging, approximating 3 billion EUR in 2016. Meanwhile, nearly 60,000 Spanish tourists came to Vietnam last year, doubling the number in 2010. However, the figure is still modest and yet to match the potential and strength of Spain – the fourth biggest economy in the EU. Our Exports to Vietnam consisted mainly of pharmaceutical products, machinery, medical technology, chemicals mechanical appliances, plastic and plastic products, dyes, leather, machinery, electrical equipment and animal feed. Exports from Vietnam include machinery, electrical and electronic equipment, shoes and accessories, garments, coffee, machinery and mechanical appliances, seafood, handbags, wallets, suitcases and rubber.

Vietnam and Spain target US$5billion in two-way trade by 2020, do you think this is feasible? What should both sides do to achieve such an ambitious goal?
All these years, our relations have grown from strength to strength covering all fields and will be further upgraded.

As our countries representatives envisaged during the visit by Vietnam’s Deputy Prime Minister and Foreign Minister Pham Binh Minh on the occasion of 40 years of the countries’ diplomatic relations in July last year, bilateral trade volume will be increased to US$5 billion by 2020.

With the economic potentials of Spain and Vietnam, the future implementation of the EU-Vietnam FTA, which will have a positive impact on the business and investment environment in Vietnam, and the execution of the Fifth Financial Protocol and the memorandum of creation of the Vietnam-Spain Joint Commission, I am certain that this number is achievable.

In addition to things to be done by the governments, the private sectors of both sides should play active role in promoting trade and investment between our two nations. In this regard, an effort is being made this year to revive the Spanish Business Association in Vietnam. By amalgamating their strengths, our companies would be able to execute more complex projects than they are individually able to. In addition, Vietnam shall be ready to provide the best possible conditions for foreign enterprises, including Spanish ones, to do business and investment in the fields matching Spain’s strength.

The 40th Anniversary offered us an opportunity to reflect on the evolution of Spain-Vietnam relations and consider new ideas and initiatives to strengthen, enrich and deepen our future.

Spanish investment in Vietnam is still modest, which does not match potential and strength of the EU’s fourth biggest economy, could you please explain why and in what fields Spanish investors are showing their interest in Vietnam?
It is true that Spanish investments in Vietnam still have a big room for improvement; this is mainly due to historical reasons. In the last decade most Spanish companies focused on other areas such as Europe, Africa or Latin America, due to cultural and historical links which made it easier for them to invest there. But this is changing and will keep on changing in the coming years because of the growing awareness of the importance of Asia and Vietnam, in particular, for Spanish companies.

Many companies which have already started to work in China in the last few years are very much interested in investing in Vietnam, taking advantage of the forecast of growth in the area. And we shouldn’t forget that Spain’s infrastructure industry is the world’s second-largest in terms of turnover, one of the key sectors for Vietnam’s development at present. Interest in Asia in general and in Vietnam in particular is on the rise in Spain.

I think one of the sectors is retailing, very dynamic in the last few years, and where changes will take place soon. Tourism has always been a major sector for Spain and there are possibilities for Spanish companies to come to Vietnam. As I said before, IT firms also show a growing interest in Vietnam due to its qualified workers. Architecture and urban planning are other areas where our two countries are working together. And I want to point out that infrastructure, and in particular transport infrastructure, and renewable energies should be other key area for cooperation. Spain has become one of the most advanced countries in renewable energies and this should develop at a good pace in Vietnam in the next few years due to its climatic characteristics. One of the challenges for Vietnam will be to combine its economic and industrial growth with respect for the environment and fight against climatic change. In this field Spain can contribute, for example, with its knowledge in water treatment, another challenge for Vietnam.

Vietnam is now calling for investment in fields of renewable energy, infrastructure, tourism and hi-tech agriculture. I wonder if these are of Spanish investors’ interest?
Yes, indeed we have identified these sectors as those with high potential and we have companies ready to invest. There is vast untapped potential for Spanish companies, some of which are world class to participate in and contribute to Vietnam´s growth, especially in infrastructure, smart cities, renewable energy, railways, defence, ports, among others.

We have bilateral agreements on trade and economic cooperation, bilateral investment protection and promotion, double taxation avoidance. Additionally, there are sector specific MoU´s in the areas of defence, roads and road transport, high speed railways, civil aviation, ports, agriculture and tourism. It is for Spanish companies to take advantage of the immense opportunities that are opening up in Vietnam, where the projected market for just infrastructure projects is projected to reach US$572.2 billion by 2021. Some of them have been awarded contracts in important projects such as Dung Quat Refinery, Noi Bai – Lao Cai Expressway, Da Nang – Quang Ngai Expressway, Metro lines in Hanoi and Ho Chi Minh City, Secondary Cities Development Program.

Vietnam has become more business friendly. It is therefore no surprise that Vietnam became Southeast Asia’s top performer and an important recipient of capital investment in the region. Vietnam´s GDP is forecast to grow by 6.5 percent in 2017 and at 6.7 percent in 2018, according Asian Development Bank (ADB)’s Outlook report. Spanish competencies and Vietnam´s complementarities provide an attractive and winning combination.

Energy, mainly Green energy, is another potential sector where Spanish companies are ready to invest into green projects in Vietnam. In Spain, a country with no hydrocarbon deposits, the contribution from renewable energies to the generation mix has already reached close on 40 per cent. As a result, Spanish companies hold leading positions on the world rankings for the various energy types.

In May 2017, Vietnam and Spain signed the Fifth Financial Protocol and the memorandum of creation of the Vietnam-Spain Joint Commission: how do you expect economic relations between the two countries to proceed after the signing?
Spain and Vietnam took a major step recently to cement their economic relationship through the signing the Fifth Financial Protocol and the memorandum of creation of the Vietnam-Spain Joint Commission. Those agreements will have a positive impact and will enhance economic relations between the two countries, in particular trade in goods and services as well as investment.

I hope that the EVFTA will be ratified soon. It will be a great tool to attract more companies as they can benefit from tariff reductions and bring benefits to their customers on both markets. Both sides will benefit from this agreement. It will help trade and investment activities of both Spain and Vietnamese companies to strengthen the cooperation and lead to many new projects. It will certainly boost the Vietnamese economy and help Vietnamese companies to become more competitive on the global market.

Spain recently opened two honorary offices in Da Nang and Ho Chi Minh City which will help to promote mutual understanding between the two nations and expand bilateral cooperation opportunities, especially in tourism, trade, culture, education – to name a few.

Separated by thousands of miles, Spain and Vietnam have different cultures and ways of life. However, the distance and differences between our people doesn’t stop our countries from having warm and friendly relations. I sincerely congratulate my Vietnam colleagues and friends on the 40th anniversary of friendship between our countries, and I believe, that in the years ahead our countries will open up new horizons of cooperation, and our relations will become even stronger.

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