On the occasion of 45th anniversary of Vietnam - Switzerland diplomatic relations, Vietnam Business Forum has an interview with H.E. Othmar Hardegger, Swiss Consul General in Ho Chi Minh City about economic - trade and investment cooperation between both countries. Le Phuong reports.
How do you evaluate the investment and trade cooperation relations between Vietnam-Switzerland in the last 45 years?
Since 1971 the bilateral relations have developed considerably in many areas. As for our economic relations following the reforms of “Doi Moi” in Vietnam investments by Swiss companies increased gradually. Today over one hundred Swiss companies are operating in this country. Their total investments of over US$2.4 billion (registered capital) make Switzerland the 4th biggest European investor in Vietnam.
Bilateral trade figures experienced some ups and downs over the last 30 years traditionally with a clear trade surplus in favour of Vietnam. The recent developments are encouraging with a growth of 60 per cent of the total trade volume over the last 4 years. In 2015 bilateral trade between Vietnam and Switzerland reached a total of US$1.53 billion whereof Swiss exports accounted for US$516 million. Our Exports to Vietnam consisted mainly of pharmaceutical products, machinery, optical instruments, medical technology and watches. Exports from Vietnam include electronic products and machines, textiles, footwear, seafood and agricultural products.
Which key fields does Switzerland focus on supporting with Vietnam in the coming time?
Switzerland has a long standing development cooperation program with Vietnam. Since 1992 Vietnam has been one of the key recipient countries of Swiss development aid. The assistance in development cooperation in the period of 2013 – 2016 reached US$123 million. Switzerland will continue to support Vietnam substantially with Official Development Assistance (ODA) in the area of economic development cooperation, which will be implemented during the next four years by SECO (Swiss State Secretariat for Economic Affairs). Based on the current development context, derived challenges and governmental priorities, SECO has developed a new Vietnam Country Strategy 2017-2020 with the overall goal to support inclusive and sustainable economic growth and improve the lives of Vietnamese citizens. This goal is further specified into the following three objectives, addressing both the public and the private sector:
1) Foster effective economic policies and institutions
2) Create a competitive and resource efficient private sector
3) Enable sustainable and climate resilient urban development
Could you please share insights on business activities of Swiss companies doing business in Vietnam?
The Swiss economic presence in Vietnam is particularly diverse. Companies have invested in more than 100 projects and are active in a wide range of activities such as food and beverage, construction and civil engineering, pharmaceutical and chemical industry, machinery industry, electrical and medical engineering, electronics and IT services, trading, shipping and freight forwarding, tourism, publishing and consulting.
The companies transfer know-how and provide direct employment for more than 15’000 people. The Swiss companies in Vietnam also often serve as a model in the field of vocational and professional education. Knowing the value of a broad vocational education many Swiss companies invest strongly in apprenticeship and training programs to improve the skills of its Vietnamese workforce. Besides that a number of companies maintain a fruitful cooperation with Vietnamese Universities destined to enhance practical training with state-of-the-art equipment and internships.
Besides their business activities all major Swiss companies in Vietnam engage in various corporate social responsibilities (CSR) projects as commitment to the local community and the sustainable development of the host country.
To my knowledge the majority of the Swiss companies are satisfied with the current business development and their prospects for the next years are generally optimistic. Therefore we can observe a number of companies which have recently expanded their investment in Vietnam or have concrete projects for expansion. Further I am glad to notice the set-up of new branch offices most recently mainly in the ICT sector.
How will EU-Vietnam FTA have impacts on Vietnam-Switzerland cooperation relations when taking effect?
Switzerland not being a member of the EU may indirectly benefit of the EU-Vietnam FTA as our economy is strongly linked with the EU and numerous Swiss companies operate subsidiaries in EU countries. In addition I am hopeful that the implementation of the EU-Vietnam FTA will have a positive impact on the business and investment environment in Vietnam in general. But most important I hope for an early conclusion of a comparable Free Trade Agreement currently under negotiation between Vietnam and the European Free Trade Association EFTA. The EFTA member states (Switzerland, Norway, Iceland and Liechtenstein) aim for a comprehensive FTA with Vietnam ensuring a level playing field for EFTA and local companies. Such an agreement would send an important signal to the business communities and stimulate our economic relations offering new opportunities for Switzerland and Vietnam.
What is your message to Vietnamese and Swiss business community on the occasion of 45 years of Vietnam - Switzerland diplomatic relations?
Most import I encourage both business communities to explore the opportunities in trade and investments in Switzerland and Vietnam.
Vietnam is an interesting market for Swiss companies both in the industry and service sector. After a continuous increase over the last years the current figures for bilateral trade and investments are still below the real potential. I am optimistic that over the next 5-10 years our economic relations will reach a higher level. I anticipate that Vietnam’s deeper integration in the global economy, an improving regulatory and legal framework as well as a better market access will promote bilateral trade and investments. In addition over the next decade Vietnam will invest further in infrastructure, environment friendly technologies and develop its supporting industry. All this will create opportunities for various sectors of the Swiss industry known for innovative and reliable products and services. Our industry is able to provide solutions such as in the fields of clean technologies, building and food technology, automation and machinery for various industries. Pharmaceuticals and medical equipment from Switzerland are in an excellent position to respond to the needs of a growing health care market in Vietnam. And with an increasing purchasing power and an expanding middle-class the Vietnamese market offers also potential for high quality Swiss consumer products.
But our trade relations with Vietnam are far from a one-way street. As I have mentioned earlier Vietnam enjoys regularly a surplus in our bilateral trade. In the first 6 months of 2016 Vietnamese exports to Switzerland have reached US$800 million, an increase of 58 per cent compared to the same period of last year. Of all Asian countries only China and Japan exported more goods to Switzerland in that period. These figures underline the potential and growing importance of the Swiss market for products from Vietnam.
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