Vietnam and Italy officially set up the diplomatic relation on March 23, 1973 but the bilateral investment, trade and economic relations have not yet developed as well as expectations. Therefore, President Nguyen Minh Triet’s recent meeting with Piaggio Vietnam Limited Company’s Director Costantino Sambuyin at the Presidency has proven the Vietnam government’s strong determination to Italian investors.
Among top ten world’s biggest economies
Located in southern Europe with three sides touching the Mediterranean, Italy is bordered by Austria, Switzerland and France in the north. Italy is poor in natural resources but has a developed industry with a lot of key industries of chemistry, manufacturing, transportation vehicles, seafood, leather, apparel, and fashion design. Particularly with a long experience, the Italian aviation sector has been a key and strategic industry, which always ranks among the world's top ten leading industries and is of great importance to scientific publications, thanks to leading experts in designing, planning and scientific application. In terms of information technology and telecommunications, Italy is one of the most developed countries.
The Italian market with a population of over 59.5 million is one of the markets that are easy to update new technology in the world and have an ideal opportunity for development in order to apply technical in goods and service trading. It ranks fourth worldwide for attracting tourists thanks to its cultural heritage, history, outstanding arts and a series of internationally standardized products of wine, food and natural environment. With annual revenue of around EUR70 billion, accounting for 5.4 percent of GDP and over 33,000 hotels recruiting 400,000 jobs, the Italian tourism sector is one of the driving forces of the economy. Despite modest cultivation land, Italy has moderate climate and has a developed agriculture sector with major products of fruits, potatoes, beet, soybeans, wheat, olive wine, beef and milk products. The Italian economy ranks seventh worldwide after the U.S., Japan, Germany, China, Britain and France. Notably, Italy has an economic development model close to Vietnam in terms of small and medium-sized enterprises (SMEs) system that is very dynamic and has contributed to two third of the national GDP.
Improving Vietnam-Italy relations
In recent years, Vietnam’s open policies, particularly the country’s entry to the World Trade Organisation (WTO) has attracted much attention from Italian trade policy makers as well as enterprises. In Italy, Vietnam is reported to be an emerging market and an attractive investment destination. However, after a 36-year cooperation period, the two-way trade turnover has not yet been as high as expectations despite gradually increasing trade to US$870 million in 2006 from US$320 million in 1996, including US$440 million worth of Vietnamese exports. By the end of June this year, Italy has 30 investment projects in Vietnam with a total registered capital of US$156 million, ranking the 31st among 86 countries and territories investing in Vietnam. With the new registered capital hike of US$46 million, Italy ranks the 12th among 35 countries and territories investing in Vietnam. The Piaggio plant project is one of the biggest projects invested by Italian investors in Vietnam, which was recently kicked off on June 24 in the northern province of Vinh Phuc. With a total capital of over US$30 million, the Piaggio Vietnam plant is expected to produce over 50,000 Vespa motorbikes per year when fully operational. The project has proven Italian special interests in the Vietnamese market.
Various penetration directions
According to many experts, reasons for low Italian investment in Vietnam include the small and medium size of Italian enterprises and their little experience in investing overseas. Italian enterprises have not yet had much understanding about the Eastern Asian region in general and Vietnam in particular; therefore, they do not dare to pour much investment in the market. Italian investors traditionally invest in Balkan Peninsula, Brazil, Latin America, China, and India. Many Italian enterprises think that Vietnam’s legal environment has not yet opened. They think that though Vietnam is a member of the WTO, the country has not yet met all criteria of a market-oriented economy, which is attributed to worry and particular concern by investors. However, it is not the reason for Vietnamese enterprises not to actively study and invest in such a great potential market. There are a lot of sectors in Italy that Vietnamese enterprises have not yet touched. The Italian labour market is quite easy-going and does not require a strict discipline like many northern and central European countries. While Vietnam has not yet sent labour to Italy, few people feel compelled to work in Italy. In some other sectors Vietnam and Italy have yet to set up trade relations. The two countries have not yet had direct flights. Particularly Italy has a lot of ports with the biggest being in Genova, which can be a good track for Vietnamese goods to penetrate the Europe in general and the southern Europe in particular but Vietnamese ships have not yet docked there. Imports and exports are often transferred via the third ports of Rotterdam, Singapore, and Hong Kong. In addition, Italy is also famous for fine art, architecture and fashion but few Vietnamese students study in the southern European country and some go to Italy for study by themselves. Hopefully, the current bilateral politic relation and Vietnam’s increasing prestige will foster economic cooperation to develop as close as the potential.
Thanh Thao
Vietnamese
