Vietnam Considered Rising Star among Asian Countries

 

Since establishing diplomatic relations in 1990, ties between the EU and Vietnam have developed very rapidly. In recognition of Vietnam’s achievements, in particular relating to poverty alleviation and donor coordination, the EU has substantially increased the financial resources it devotes to Vietnam - more than €300 million for the next seven-year period. The EU is committed to continue assisting Vietnam’s efforts in becoming a modern industrialised society, in a most aid-effective manner. 

 

The EU and Vietnam have also become very important trade partners with some €9 billion of total trade in 2006. The EU is a major source of Foreign Direct Investment for Vietnam, and the second largest investor in 2006. Vietnam’s accession to the World Trade Organisation at the beginning of the year was the culmination of a long process which began with the “Doi Moi” policy 20 years ago aimed at integrating Vietnam into the international economy.

 

Vietnam is already an influential member of ASEAN, with which the EU has just celebrated thirty years of formal relations. The ASEAN Summit just adopted a Charter and a blueprint to establish an Economic Community by 2015. These are very significant steps in ASEAN’s integration ambitions. With a population of almost 600 million, and governments in general committed to development, ASEAN has high potential economies of scale, which it can realise by building a large single market. The EU not only encourages ASEAN in this endeavour, but also provides practical assistance. Vietnam will be a prime beneficiary of this process and is actively involved in the on-going negotiations for an EU-ASEAN Free Trade Agreement. It is very important that we maintain a high level of ambition for this process.

 

We are also working with Vietnam on a broader regional level, as part of relations with Asia as a whole. Vietnam’s very successful hosting of the ASEM and APEC summits here in Hanoi is a sign of this. The level of interdependence between Europe and Asia is now at unprecedented levels. Asia has recently surpassed NAFTA to become the EU’s main trading partner, accounting for a third of the total trade flow, and this continues to grow. Investment flows from the EU to Asia are also considerable, and now make up close to a third of total external European investment.

 

Vietnam will soon take a seat at the UN Security Council. This shows that it is ready to play a global role. It is significant that Vietnam’s desire for closer integration with the international community goes beyond the economic sphere to encompass the political domain. In becoming a member of the Security Council, Vietnam is taking on global responsibilities.

 

Vietnam has come a long way since 1999 when there were concerns about spillover effects from the regional financial crisis. Foreign Direct Investment had slowed down to under $2 billion and the private sector accounted for less than one percent of GDP.

 

The World Bank report "Taking Stock" shows that the overall outlook for Vietnam today is quite different, with the economy remaining resilient despite a series of shocks. FDI commitment is expected to reach a record high of US$16 billion in 2007. GDP growth is anticipated to again surpass 8 percent and, most importantly, Vietnam has lifted more than 34 million people out of poverty in the last 13 years.

 

Vietnam is also increasingly integrated with the global community. The country became the 150th member of the World Trade Organization in January this year and will take a seat as a non-permanent member of the United Nations Security Council in January 2008.

 

Indeed, the story of Vietnam's development has been remarkable. The country has managed to achieve inclusive growth, while avoiding the kind of inequality that has plagued other countries as they moved from planned to market economies.

 

The Government of Vietnam, under the leadership of Prime Minister Dung, must be congratulated for its stewardship of the economy and for its determined focus to improve the lives of its people.

 

Vietnam's development story remains unheralded and needs to be better understood, as it provides key lessons for many developing countries that are struggling to reduce poverty. In fact, lessons from Vietnam may have as much or perhaps even greater relevance for many smaller low-income countries than the very successful giants, China and India. A vibrant interaction between Vietnam and its partners has been a source of strength and will continue to be of vital importance. This interaction is not only based on the transfer of financial resources, but also the exchange of knowledge and ideas.

 

As partners, the government as well as donors have made great strides in living up to the commitments agreed to in the Hanoi Core Statement, and we can all look forward to hearing more about the progress and lessons learned this afternoon. As Vietnam moves to middle-income status and looks forward to the period 2010 - 2020, when it hopes to maintain sustained development and become an industrialized country, it has the welcome opportunity to learn from those who have already trod the path to development. The lessons it will learn are not only about policies that it might wish to pursue, but also the pitfalls to avoid.

 

Opportunities come with challenges. Vietnam has been meeting many challenges with success in many areas, and I know the country will continue to meet them in the future. Please be assured that as partners we will be here to support you as you take this great nation forward, and bring the fruits of development to the people of Vietnam.