Vietnam- Italy Strategic Partnership: Providing Basis for Closer Political and Economic Ties

 

Italy and Vietnam have always enjoyed a deep friendship and the bilateral relations have traditionally been excellent. Our two countries are now experiencing in the last years a tremendous growth that has touched all the sectors of collaboration. On the political side, we have established fruitful co-operation both at bilateral and multilateral level, confirmed and strengthened by a number of high-level visits. I would like to mention on this regard the visit of Minister for Foreign Affairs Terzi to Hanoi on February 2012 and the State Visit of H.E. Nguyen Phu Trong, General Secretary of the Communist Party of Vietnam, to Rome in January 2013: both marked a step in a new phase of bilateral co-operation.

 

 

On the economic side, after 1986, relations between our two countries have been growing steadily, Vietnam is now an important market for Italian companies and, thanks also to ASEAN and the net of FTA with major Asian economies, is more and more considered as an important hub for productions to be exported in the entire region. Currently there is still a lack of knowledge about the potential of Vietnam but the two governments have committed themselves in fostering solutions to promote the increase of bi-lateral economic ties.

 

I would also like to mention another key sector of Italy – Vietnam relations: it’s Development Co-Operation. Italy has been the first western country to start Development Co-Operation activities in Vietnam and has played an important role, in early 90s, in the process that led to a strong presence European Community and European Union in Vietnam. With time the type of activities have changed, following the path that has led Vietnam to become a Middle-Income Country, but Italy is still at the forefront in sustaining Vietnam’s development process.

 

I think that the most important breakthrough in the relations between Italy and Vietnam already happened in January this year: the signature of the Strategic Partnership declaration on the occasion of the State Visit of H.E. Nguyen Phu Trong. Italy has become part of a small group of countries that are experiencing closer and closer ties with Vietnam and that are building broad and deep relations with this country. I think that, while we celebrate the first 40 years of bilateral relations, this agreement will lay the foundations for the future of our cooperation, providing a basis for closer political and economic ties.

 

If Strategic Partnership agreement is the most important breakthrough, there are a number of initiatives linked to the 40 years anniversary that contribute effectively in the growth of bilateral relations, in this regard I like to mention “Casa Italia”. A centre for the promotion of Italian culture and “Made in Italy” that will be hosted in the former residence of the Italian Ambassador, in the heart of Hanoi and will represent a very important tool that will help mutual knowledge and understanding between our two countries. I’m very happy to inform that this Centre will be inaugurated on the 11^th of April.

 

As a matter of facts, in the last years we have seen a steady increase in the number of the Italian companies operating or investing in Vietnam. The number are not comparable to other great partners, such as Japan or Korea or Singapore, but a positive trend is set. Indeed, the Italian businesses are attracted here by the qualified workforce, the dynamism of the Vietnamese economy and economic zones. Moreover, it has to be considered that, thanks to Vietnam’s policy of enlarging its multilateral trade space; this Country can be a production platform particularly competitive for those Italian companies that want to be more active in ASEAN and Asian markets. Italian investors are active here with very modern production plants and bring in the Country the state-of-the-art production technology for their specific sectors. The biggest obstacle to have a larger number of Italian investors is, most probably, an information gap, since the opportunities offered by Vietnam and its economy are still largely unknown to many Italian enterprises. Therefore, intense action should be taken to allow the Italian companies to really understand the potential of Vietnam. In March 2012 a roadshow was realized in 4 different Italian cities where Italian SME’s representatives could be briefed on the features of the Vietnamese economy, while a very big Country presentation for Vietnam will be implemented later this year in Florence. Moreover, we hope that it will be possible to increase the number of Italian economic mission visiting Vietnam, to allow our businesses to know better this Country. The Italian Embassy in Hanoi, the Vietnamese Embassy in Rome and other partners are already working on that and we do hope that these actions will bring concrete results and will contribute to strengthen a trend of incoming investments to Vietnam.

 

I have previously underlined the positive aspects of the Vietnamese economy and the very interesting complementarities potentially existing between Italian and Vietnamese SMEs, I have now to recall some weak features of the domestic economic environment. The “Doing business report 2013” by IFC and World Bank ranks Vietnam at 169 position for what concerns the “Protection of the investments”, a result definitely unsatisfactory. Let me mention with this regard also the 2012-2013 Global Competitiveness Report, where “rampant corruption and inefficiencies” in the public administration and weak infrastructures are quoted as major challenges of the system. In my opinion, both reports clearly indicate the areas where Vietnam has to improve to have better access to Italian (and European) investments: more transparency in the economic system, in the bureaucracy, in the ways the domestic laws are interpreted and implemented. An improvement in these fields, and a strengthened program aimed at improving the physical infrastructure of the Country, will bring great benefit to the economic system and, it’s a sure bet, more foreign investors willing to start their business here.