Vietnam - A Partner of Luxembourg

Since its first aid to Vietnam in 1993, Luxembourg pledged to continue its official development assistance to Vietnam and became a member of the Consultative Group (for Vietnam) since 1998. In March 1999, the Luxemburg Agency for Cooperation and Development’s introduction of the “Strategy for cooperation between Luxemburg and Vietnam” affirmed Vietnam was the top-placed country in Asia and one of 10 key countries under the Luxembourg Government’s development cooperation programme.

 

Before 2002, Luxembourg annually gave Vietnam EUR5-6 million non-refundable aid. During the Luxemburg visit of former Vietnamese Prime Minister Phan Van Khai in September 2002, the two nations signed a new cooperation framework agreement to replace the old one inked in 1995, signed orientation cooperation programme for the 2002-2005 period, under which Luxembourg pledged to sponsor EUR35 million to Vietnam.

 

On March 8, 2006, Vietnam and Luxembourg signed an orientation cooperation programme for the 2006-2010 period, under which Luxembourg pledged to donate EUR50 million to Vietnam. On June 22, 2007, the Vietnamese ambassador to Belgium and Luxembourg and Luxembourg minister of cooperation and humanitarian activities signed a protocol on the implementation of three healthcare and rural development projects under which the Luxembourg will give a EUR10.9 million non-refundable aid to Vietnam. Luxembourg aids mainly focus on rural development, health, training (tourism, finance and banking). Besides, several projects are three-sided Luxembourg-Vietnam-WHO, engaged in healthcare and family planning.

Doan Duy Khuong Ph.D, VCCI Vice President, said the trade ties between the two nations have been developed and expanded in recent years. In investment, in addition to strongly developing ODA programmes, Luxembourg invested more than US$800 million in 15 projects in Vietnam as of May 2007, mainly focusing on construction industry (granite production and sanitation-ware production), food processing industry (sweet, chocolate, condensed tomato, etc.) and high-tech (software development).

 

In trade, the two-way value reached some US$6 million a year. Vietnam’s main exports are textile, apparel and footwear. Vietnam’s major imports from Luxembourg are leather materials, cigarettes and steel.

However, according to Mr Khuong, the trade and investment ties between the two countries remain modest and fail to come up with mutual potential and strengths. “In the coming time, we need to further boost up the relationship between the business communities of the two countries especially in the context that Vietnam and Luxembourg are in the heart and play increasingly important roles in the Southeast Asia and the EU. This forum will actively lend a further boost to intensify the business relations to develop trade and investment between the two countries,” Mr Khuong said.

 

According to Mr Jeannot Krecké, Luxembourg Minister of Economy and Foreign Trade, with its 22 per cent of exports to the EU, Vietnamese companies will have better conditions when they cooperate with companies in Luxembourg - a gateway to the EU. “Luxembourg enterprises wish to cooperate with Vietnamese enterprises in the fields of transportation and logistics, alloy processing, posts and telecom, banking and finance and plastic technologies,” said Mr Jeannot Krecké.

 

According to Mr Jeannot Krecké, these are Luxembourg’s fields of advantage while Vietnam has available sources of minerals. If the cooperation is good, Vietnam will have more suitable methods to exploit and process and will be able to manufacture high-quality metals for automobile and ship production. Similarly, as a world-power financial market, Luxembourg can help Vietnam develop services, disseminate, transfer technologies and management experience for banks in the integration process. “Especially, we have big aviation carriers. With the upcoming opening of a direct flight route from Vietnam to Luxembourg, Vietnamese and Luxembourg businesses will have more favourable conditions to exchange commodities and boost up trade,” Mr Jeannot Krecké emphasised.