Vietnam-Switzerland Relations Developing into Higher Status

Recently, Mr Jean Daniel Gerber, Swiss Secretary of the Federal Department for Economic Affairs (DFE) visited Vietnam at the invitation of the Government of Vietnam. During the meeting, Prime Minister Nguyen Tan Dung said he hoped Switzerland would support Vietnam to train human resources, particularly in field of vocational training and university lecturer training. Especially, the host emphasized that Vietnam-Switzerland bilateral relation has been developing very well in multi-sectors, including increasing two-way trade turnover and efficient implementation of Swiss investment projects in Vietnam, which have brought about bilateral benefits.

As a result, the host highly appreciated the visit by Mr Jean Daniel Gerber as well as Swiss enterprises to boost bilateral cooperation in economic, trade and investment sector. The Vietnamese leader stressed his support to implementation of bilateral development cooperation and the two-way free trade agreement.

 

Mr. Jean Daniel Gerber expressed his adorability to Vietnam’s achievements, particularly in high economic growth rates over the past years. He emphasized the purpose of his visit to Vietnam to intensify the bilateral cooperation as well as further discuss the Vietnam-Switzerland Free Trade Agreement.

 

The guest was escorted by a group of Swiss enterprises to Vietnam to seek investment opportunities. Mr Jean Daniel Gerber affirmed that Switzerland will continue to support Vietnam’s economic development and the government of Switzerland had decided to change attitude to Vietnam into development cooperation from assistance. Recently, the Swiss government had decided to finance US$10 million for financial market development, sustainable macro-economy and free trade in Vietnam.

 

Obviously, over the past years, a lot of Swiss as well European enterprises have invested in Vietnam with encouraging achievements. However, Swiss investors have not made full use of great potential in all sectors in Vietnam; therefore, the Southeast Asian country is creating favourable conditions for Swiss investors as well as other foreign investors to seek investment opportunities and invest in Vietnam for the sake of equality and mutual benefits.

Almost Swiss investment projects in Vietnam focus on industry and construction sectors. The Vietnam-Switzerland trade turnover had been continuously increased by an average of 20 percent per annum, to US$2.4 billion in 2008 from US$1.25 million in 2008. Switzerland always considers Vietnam an important partner in the Southeast Asian region, which has been proven by the fact that the government of Switzerland put Vietnam in the list of its annual official development assistance (ODA) beneficiaries in 1993. The European country has to date disbursed a total of US$95.6 million in ODA for Vietnam.

 

Generally, Swiss ODA projects in Vietnam are efficiently implemented and have made great contributions to poverty reduction and hunger eradication as well as infrastructure development in the Southeast Asian country. Recently, Switzerland has planned to slash non-refundable aid to Vietnam as it said Vietnam’s economy has remarkably grown with higher per capita income compared with that in other countries worldwide.

 

In term of investment, Switzerland ranks the 17th among 79 countries and territories investing in Vietnam with 57 projects capitalized at $1.4 billion. The Swiss investment mainly focuses on industry sector with an US$800-million cement production project by Holcim group as well as agricultural and service sectors. A total of 90 Swiss firms are operating in Vietnam, most of which are wholly foreign invested. Swiss big groups in Vietnam include Nestlé (food and beverages), Novatis/ Ciba - Sandoz (pharmaceutical chemistry), Roche (pharmaceutical), Holderbank/ Holcim (cement), ABB (electric equipment and transformer stations), Sulzer (engineering and electric equipment), SGS (appraisal), Escatec (electronics), Ringier (printing), André/ CIE (trade) etc.

 

In term of trade, the bilateral trade turnover reached over $1.8 billion in 2008, nearly double against 2007. Vietnam’s main exports to Switzerland included shoes (25 percent), seafood (24.25 percent), coffee, apparel, bags, umbrellas and home applicants. Among export items with larger revenues, only shoes, coffee and seafood had higher revenues but other goods had falling revenues. The category of Vietnamese exports to Switzerland has been increased to over 300 items but the country still earns a lot from major export goods. The potential to develop new export items is still limited.

 

Vietnam mainly imports Swiss goods of precious metals, equipment and machines, spare parts, chemicals, medicines, and plastic materials and products for domestic goods production and processing.

 

Switzerland is a high-end market that demands high-quality products; therefore, in order to further penetrate into such a market and have a good status in the market, Vietnamese exporters must have professional and prestigious qualifications and management methods. In addition, Vietnamese exports, particularly agro-products to Switzerland must be strictly licensed in a bid to ensure food safety and hygiene standards, which has been a big barrier to average and low-quality goods from developing countries like Vietnam.

Regarding education, Switzerland is famous for being a prestigious training centre for banking, tourism, insurance and high-tech. A total of 150 Vietnamese apprentices, students and postgraduates are studying at universities in Switzerland. The European country is actively supporting Vietnam via education projects for environment and management as well as projects to train bachelors and doctorates of finance, banking and business administration. The cooperation programme between the Ho Chi Minh City Banking University and the North-western Switzerland Application Science University has brought about considerable achievements since the start in 2007. Meanwhile, cooperation agreements to train doctorates between the Ho Chi Minh City University of Technology and the Lausanne Swiss Federal Technology Institute, between the Hanoi University of Technology and the Geneva University during the visit to Vietnam by the Swiss President Pascal Couchepin in August 2008 have been creating an important momentum for bilateral education in the near term.