“Vietnam and Australia have, over the past number of years, built up a very good and positive relationship both economically and politically. The Australian Chamber of Commerce in Vietnam, along with Australian Embassy and Consulate and Austrade, will be encouraging the growth of business between Vietnam and Australia and encouraging Australian businesses to look at potential opportunities here”, expressed Mr Brian O’Reilly, Chairman of the Australian Chamber of Commerce (AusCham) HCMC, in an interview with the Vietnam Business Forum. Duc Quan reports.
How do you evaluate the co-operation between Vietnamese and Australian enterprises in recent years and what are the obstacles for this co-operation?
Cooperation between Vietnamese and Australian businesses continues to grow and Australia has established a strong business presence in Vietnam over the past 20 years. There are a number of reputable Australian companies in Vietnam such as Telstra, QBE, ANZ, Baulderstone’s, Bluescope Steel, RMIT International University, Meinhardt, the Commonwealth Bank of Australia, Interflour, and Origin Energy. Australian companies of all sizes have been involved in many industries including education, steel manufacturing, energy, agribusiness, and infrastructure.
Vietnam, like many developing nations, has a number of challenges. These challenges may impact future growth and investor sentiment, including from Australian companies. In recent years, Vietnam has faced challenges around macroeconomic stability, including declining foreign exchange reserves, high levels of inflation and currency devaluation. In addition, recent downgrades by global ratings agencies will also negatively impact investor sentiment. There have been issues with transparency in decision making and the recent Government announcements to tackle many of these transparency issues are welcome news in lessening an increase in perceived risk for foreign investors.
According to you, how does the recently signed ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) help facilitate investment and trade cooperation between Vietnam and Australia?
The ASEAN - Australia - New Zealand Free Trade Area (AANZFTA) is Australia’s most comprehensive trade deal to date. The countries of ASEAN; Brunei, Myanmar, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam; constitute one of the most dynamic economic regions in the world and are right on Australia’s doorstep. It is the largest FTA Australia has concluded, and covers an area with a combined population of 600 million, with an estimated GDP of US$2.7 trillion.
The AANZFTA covers goods, services, investment, intellectual property, e-commerce, temporary movement of business people, competition and economic cooperation. Vietnam is a major player in ASEAN and this FTA should also encourage more trade between Vietnam and Australia and encourage more investment in Vietnam by Australian companies.
With regard to cooperation between Vietnam and Australia it should result in extensive tariff reduction and elimination commitments. Regional rules of origin will provide new opportunities for Vietnamese and Australian exporters to tap into international supply chains in the region. It will promote greater certainty for service suppliers and investors, including through certain legal protections for investment. It will also provide a platform for ongoing economic engagement between Australia and ASEAN countries, including Vietnam, through a range of built-in agendas, economic cooperation projects and business outreach activities.
Both Vietnamese and Vietnamese businesses should take full advantage of the ASEAN – Australia - New Zealand FTA associated opportunities and to develop even stronger businesses links between the two countries.
How do you evaluate the business operations of Australian companies in Vietnam and what specific fields do you think both sides can further co-operate on in the future?
Australia has a strong presence in Vietnam in areas such as infrastructure, education, agribusiness, financial services, and food and beverage. The demand in Vietnam to build the capacity of its workforce is great. This expertise not only includes the technical or “hard” skills specific to the particular industry but also the people or “soft” skills that are also very much needed.
Education and training is one area that will have continued growth. Australia has a reputation for quality education and should be looking at opportunities to enter the market or expand operations in this industry. The other area is technical and vocational education. The lack of qualified tradespeople is a big issue that needs to be addresses urgently. In addition, the need to improve “soft” skills will continue to grow also.
The growth of the Vietnamese economy has also led to growth in agricultural production. Dairy products are in great demand and there are many opportunities to become involved in this industry. As many aspects of the agricultural industry are relatively new in this market there is a demand for expertise in this field that would be an opportunity for Australian entrepreneurs.
Tourism and hospitality is another growth area with great potential. There is a growing internal demand in this sector in addition to increased numbers of visitors from overseas. There is a great need to build the competencies of staff at all levels in this industry.
Thank you very much!
Vietnamese
