Vietnam and South Africa established diplomatic relations in 1993. The two countries currently have a lot of potential to further comprehensive cooperation, especially in economics and trade. Vietnam Business Forum interviewed Ms Kgomotso Ruth Magau, Ambassador of South Africa to Vietnam, about the trade and investment relations between the two countries over recent years. Huong Ly reports.
What do you think about the economic cooperation between South Africa and Vietnam? What areas have the best cooperation potential?
If we look at the status of the current economic and trade cooperation between the two countries, there is a huge trade deficit between South Africa and Vietnam. During 2015, South Africa imported goods from Vietnam which amounted to US$1.0565 billion and South Africa exports to Vietnam amounts to US$153 million which indicates a huge trade deficit of US$903.5 million in favour of Vietnam.
South African positioned itself as a manufacturing centre of excellence with diverse industrial sectors, open economy, sound business environment for investment and profit, gateway to Africa and markets of more than 200 million consumers. The potential areas for cooperation include Agro-processing; Business Process Outsourcing & IT Enabled Services; Capital/Transport equipment, metals & electrical machinery & apparatus; Electro Technical; Textile, Clothing, & Leather; Consumer goods; shipbuilding; Pulp, Paper and Furniture; Automobiles & Components; Green Economy industries; Advanced Manufacturing in Laser technology, robotics and bio-manufacturing; Tourism; Chemicals, plastic fabrication & pharmaceuticals and Creative and Design Industry.
Could you please specify the advantages and disadvantages of South African enterprises when doing business and investment with Vietnamese partners?
South Africa is the second largest and most dynamic economy on the African continent and is one of the most sophisticated and promising emerging markets, offering a unique combination of highly developed first world economic infrastructure with a vibrant emerging market economy. The country is also regarded as the gateway to Africa and its exchange rate makes it one of the least expensive countries for foreigners to live and invest in. Energy costs are still among the lowest in the world, unit labour costs are lower than those of emerging markets and South Africa’s first-world infrastructure and high living standards ensures good value for money. One of the disadvantages between South Africa and Vietnam is the lack of information on investment and business opportunities about each other's markets. Lack of understanding each other is one of the main factors affecting the increased cooperation between our two countries.
You have been living in Vietnam for 3 years, how has the country changed during this time?
During the past 3 years, I was astonished by the development and improvement in the infrastructure industry. Vietnam turned into a very attractive destination for foreign investment. The country still has a lot of growth potential and a key challenge for attracting foreign investors is by giving them confidence in what they are investing in. Perhaps Vietnam must invest in more intensive international advertising of its multiple products on offer.
What should South Africa and Vietnam do to promote the cooperation between the two countries?
The potential trade between our countries is fairly large, but have not been fully exploited, especially from the side of South Africa. In order to further enhance trade relations between the two sides, both countries should be more pro-active in engaging in all levels of government. South Africa remains a competitive business and investment destination despite challenges in the global economy. To ensure that Vietnam’s investment in trade with South Africa remains sustainable and profitable, investors and trade partners are encouraged to consider a long term view to cooperation. I believe that this outlook will ensure that investors will ultimately receive the greatest reward over time. Both countries must be resilient in their efforts to market their best export products to full extent.
Vietnamese
