Belgium's Investment: Inappropriate to the Potential

Vietnam and Belgium established a diplomatic relationship on March 22, 1973. Since then, the two countries have continuously boosted their ties in all aspects, especially in trade and investment. Recently, Belgium's enterprises along with a delegation of European enterprises had a working visit to Viet Nam. On this occasion, the Vietnam Chamber of Commerce and Industry (VCCI) coordinated with the Ministry of Industry and Trade of Vietnam and the Flanders Investment & Trade Promotion Bureau to hold a working meeting for enterprises of the two countries.

The bilateral cooperation between Vietnam and Belgium has been strengthened intensively over the past time, which has helped create a solid foundation for a sustainable bilateral partnership between the two sides. Vietnam considers Belgium as an important partner in EU region. Deputy Minister of Industry and Trade Le Danh Vinh said that the bilateral trade continuously increases year by year, from US$377 million in 1999 to US$1.369 billion in 2008. Last year, Vietnam's export value was US$1.019 million, a rise of 20 per cent on year, and the import value was US$350 million, up 12 per cent against the previous year.

Vietnam exports mainly seafood, footwear, apparel, leather products, pottery, gemstone, glass, plastic and rubber products. Belgian consumers are very interested in some new commodities of Vietnam such as handicraft, woodwork, spices and coffee. Belgium, although being a small market in EU, ranks fourth in Viet Nam's exports to EU, just behind Germany, England and Netherlands. Vietnam imports mainly gemstones, precious metals, chemicals, pharmaceutical products, iron, steel, high-quality metal and equipment from Belgium.

Currently, Belgium has nearly 90 representative offices, branches and joint ventures in Viet Nam, including 66 units from Flandre. In 2007, an additional 11 enterprises of Wallonie marked their presence in Vietnam. In May, 2007, on the working visit to Vietnam, Fientje Moerman, Deputy Prime Minister in charge of economic affairs of Flandre region, officially opened a regional economic representative office in Ho Chi Minh City.

Although the bilateral trade has witnessed a growth over the past time, Belgium's investment into Vietnam is still modest. According to Mr Bui Quoc Trung, Head of the Department of Foreign Investment under the Ministry of Planning and Investment, investments of Belgian enterprises in Vietnam are still lagging behind its potential. As of March 10, 2009, Belgium marked 32 investment projects with total registered capital of US$77.6 million in Viet Nam, ranking 32nd out of 77 countries and territories investing in Vietnam. Out of the total projects, five projects worth US$4.6 million invested in services, accounting for 20 per cent in project and 11.87 per cent in investment capital, 16 projects valued at US$51.6 million invested in industry, making up 64 per cent in project and 69 per cent in capital.

Belgium has a strong financial capacity and has potential in industries such as agricultural product processing, construction and energy. Vietnam, meanwhile, has comparative advantage in human resources, diverse natural resources and advantageous geographical location in the actively developing Southeast Asia. In addition, the Asian country has political and social stability. Trung also said that these strong points of the two countries, if being exploited, will bring in great benefits for both.

In terms of official development aid (ODA), Vietnam is the only Asian country given priority to receiving ODA from Belgian government. Since 1993, the Kingdom of Belgium has given about 120 million Euro to Viet Nam, including 40 million Euro worth of preferential credit and 80 million Euro worth of aid, provided through all channels of bilateral and multilateral cooperation, NGO, and cooperation among universities. In which, the two sides have focused on cooperation in agricultural and rural development, education and training, healthcare and environment. During 2004 and 2005, Belgium granted 19.6 million Euro to Viet Nam. Belgium pledged to help Vietnam introduce the model of North - South cooperation and support Vietnam in humanitarian activities. In the period of 2007-2010, Belgium has pledged to grant 32 million Euro to Viet Nam, giving priority to human resources development, water source management, environment protection, and improvement of health and living conditions.

Belgian ambassador to Vietnam Hubert Cooreman said that one of the important and outstanding features in the bilateral cooperation tie is that it's based on the mutual respect and understanding with the common targets of reducing poverty and eliminating hunger by allowing local people to receive and have a better access to essential and basic demands to improve their living quality.

The trade promotion activities between the two countries have also been boosted over the past time. Vietnam has often sent delegations to visit, work and survey markets and participate into international trade fairs in Belgium. Many delegations of Belgian enterprises and various institutions such as associations, regions of Wallonie and Flandre have also visited to work in Viet Nam. Many symposia with the participation of the two countries' enterprises have also been held in Vietnam and Belgium. The cooperation ties among Vietnamese economic institutions at central and local level and in various industries with three regions of Wallonnie - Flandre - Bruxelles Capital have been increasingly tightened. Mr Pham Gia Tuc, Vice Chairman cum General Secretary of VCCI expressed his belief on the strong development of the bilateral economic and trade cooperation in the future.

Thoa Nguyen