Expectations of opening up markets in Gulf countries

Vietnam and Saudi Arabia have many similarities, a common development vision and much room to increase mutual investment and trade cooperation.

Arab goods want to penetrate deep into Vietnam

On the morning of October 19, Prime Minister Pham Minh Chinh attended the Vietnam - Saudi Arabia Business Forum within the framework of his visit to Saudi Arabia and participation in the ASEAN - Gulf Cooperation Council (GCC) Summit.

Prime Minister chairs Vietnam - Saudi Arabia Business Forum

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Saudi Arabia wants to receive highly skilled Vietnamese workers

On the afternoon of October 19, Prime Minister Pham Minh Chinh received Saudi Arabian Minister of Economy and Planning Faisal Al-Ibrahi. At the meeting, the Prime Minister suggested that the two economies strengthen connectivity, coordinate in organizing trade and investment promotion activities, prioritizing areas such as energy, finance and banking, and strengthen cooperation in new areas such as production cooperation, Halal product processing, digital transformation, etc. Minister Faisal Al-Ibrahi emphasized that the two countries can take advantage of each other's markets to expand exports to other markets in the region. The two sides agreed to study the establishment of joint economic working groups and soon organize the 5th meeting of the joint committee. Receiving Saudi Arabian Minister of Human Resources and Social Development Ahmed AlRajhi, the Prime Minister suggested that the two sides increase exchanges between labor management agencies, promote cooperation in the field of training, and connect labor markets. Mr. Ahmed highly appreciated the quality of the Vietnamese labor force, including highly skilled workers. Affirming that the potential for cooperation in this field is still very large, he expressed his hope that the two sides would coordinate and soon resolve current difficulties to bring more Vietnamese workers to Saudi Arabia in the near future; including legal issues, training cooperation and building an effective recruitment mechanism.

Sharing with the Prime Minister, Mr. Hassan Al Hwaiziy, Chairman of the Federation of Saudi Chambers of Commerce, said that the efforts of the Government and business community of both sides have contributed to promoting bilateral cooperation. Bilateral trade turnover increased from 2.2 billion USD in 2021 to over 3 billion USD in 2022.

Saudi Arabia is currently Vietnam’s second largest trading partner in the Middle East. However, the trade balance is skewed as imports from Vietnam are twice as high as exports from Saudi Arabia to Vietnam. Businesses in this country also hope to balance the trade balance and Saudi goods will penetrate deeper into the Vietnamese market.

Mr. Hassan also expressed his hope that the Vietnamese Government will have solutions to promote Saudi Arabia’s investment in the manufacturing and service sectors in which Vietnam has strengths; especially in the sectors in which Saudi Arabia has been successful in Vietnam such as steel and solar power. At the same time, encourage sectors such as information technology, textiles, food, etc. to increase the country’s profits in Vietnam compared to the present.

Listening to recommendations from representatives of Saudi Arabian businesses, Prime Minister Pham Minh Chinh shared about Vietnam's favorable factors to help both sides gain more confidence, opportunities, and necessary conditions to strengthen cooperation. In particular, the "4 no" defense policy along with economic and diplomatic policies help Vietnam stabilize politics, creating a favorable environment for investors to come to Vietnam. During the most difficult years of the Covid-19 pandemic, Vietnam still maintained macroeconomic stability, controlled inflation above 3%, GDP growth in 2022 above 8%, and ensured major balances of the economy.

According to the Prime Minister, Vietnam and Saudi Arabia have many similarities and a common vision, with great room and potential for cooperation. Saudi Arabia has a strategic vision until 2030 and then Vietnam also has a vision until 2030... The two sides also have trade relations that can complement each other. Prime Minister Pham Minh Chinh suggested that the two sides should promote cooperation in emerging industries such as digital transformation, green transformation, climate change response, development based on innovation and science and technology, not on resources... Vietnam has an abundant labor force that can meet the needs of Saudi Arabia because there are currently more than 5,000 Vietnamese workers working in this country.

The Prime Minister said that Vietnam is negotiating a free trade agreement with the United Arab Emirates (UAE) with the expectation of opening the markets of Gulf countries by the end of the year. "These are things that we can do within our reach. The Vietnamese Government is committed to ensuring the legitimate rights and interests of businesses in investing, and is ready to accompany and enhance the interests of foreign businesses in the Vietnamese market. In particular, we will share with each other in times of difficulty in the spirit of "harmonious benefits and shared risks," the Prime Minister emphasized.

Attracting green finance

For more information, Deputy Minister of Planning and Investment Tran Quoc Phuong said that Vietnam remains an attractive destination for world investors, with positive FDI growth. International organizations highly appreciate Vietnam's investment and business environment. To date, Vietnam has 38,379 valid investment projects with a total registered capital of 455 billion USD from 144 countries and territories. Regarding overseas investment, Vietnam has nearly 1,667 projects with a total registered capital of over 22 billion USD to 80 countries and territories.

Minister of Industry and Trade Nguyen Hong Dien said that the bilateral trade volume between the two countries has continuously grown positively over the past 10 years. In 2022, it reached over 2.7 billion USD, an increase of 32.4% compared to 2021, making Saudi Arabia a large market and one of Vietnam's leading important partners in the Middle East. According to Mr. Dien, the two countries have a lot of potential to continue expanding the scale of bilateral trade, because the structure of import and export goods does not compete directly but complements each other. Specifically, such as electronics, textiles, footwear, agricultural and aquatic products, processed foods... of Vietnam, or petroleum, petrochemical and financial products of Saudi Arabia.

Sharing on the sidelines of the conference, Mr. Waqas Akram, Brand Director of Emi Viet Trading and General Company Limited - an importer and distributor of agricultural products, said that currently, Vietnamese enterprises can basically meet the demand for vegetables, fruits, agricultural products (coffee, cocoa, etc.), dried foods or spices (pepper, cinnamon, star anise, rice, etc.). However, frozen meat products are still limited, due to the high-standard Halal slaughter method. According to him, Vietnamese enterprises need to accept investment changes in the direction of chain production from breeding to raising, ensuring Halal slaughter standards...

In addition, the Muslim market is very large, including 57 countries, with a population of 2 billion people, accounting for 25% of the global population, including many of the world's top developed countries such as the UAE, Dubai, and Saudi Arabia. "If Vietnam adjusts to Halal standards, it will not only attract many tourists from Middle Eastern countries but also many potential investors," said Mr. Akram.

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