No limits to collaboration
Despite a population of only about 60 million people, the GCC, consisting of 6 countries: Saudi Arabia, the United Arab Emirates (UAE), Qatar, Kuwait, Bahrain and Oman, is a highly developed economic region, with a GDP of around $2 trillion in 2022.
In addition to its strength in oil, in recent years, economic activities, trade, and investment have been booming in this region. Cities such as Dubai (UAE) and Doha (Qatar) have become global leaders in finance, information technology, tourism, ports, and real estate.
Meanwhile, with its ambitious Vision 2030 strategy, Saudi Arabia is undergoing rapid changes to gradually reduce its reliance on oil. The country is currently implementing mega projects and building future cities, with investments amounting to hundreds of billions of dollars. It is worth noting that Qatar, the UAE, and Saudi Arabia all have enormous investment funds with capital reaching hundreds of billions of dollars.
Prime Minister Pham Minh Chinh witnesses the signing of a Memorandum of Understanding between Vietnamese and UAE units.
Given the potential of this region, the visits of Prime Minister Pham Minh Chinh to Saudi Arabia (October 2023) and the UAE (December 2023) have sent a message about Vietnam’s interest and priority in developing relationships with GCC partners in particular and the Middle East region in general.
According to Deputy Minister of Foreign Affairs Do Hung Viet, proactively enhancing relations with countries in the region is of practical significance in opening up new markets, increasing export goods, attracting investment, and new resources that serve Vietnam’s development in the near future.
With its increasing prominence, Vietnam has also attracted special attention from the countries in the region. The Emir of Qatar, Sheikh Tamim bin Hamad Al-Thani, reaffirmed during a meeting with Prime Minister Pham Minh Chinh in Riyadh that “there are no limits to cooperation between the two countries and we are ready to collaborate to address any issues and remove any barriers in order to further enhance cooperative relations with Vietnam.”
Crown Prince, Prime Minister of Saudi Arabia, Mohammed bin Salman, emphasized that Vietnam is the leading important partner in Southeast Asia. He also expressed his desire to visit Vietnam in 2024, in commemoration of the 25th anniversary of the establishment of diplomatic relations between the two countries (1999-2024).
The Crown Prince also affirmed that he will instruct the Saudi Arabian Public Investment Fund to soon exchange and expand investment in Vietnam, particularly in the fields of traditional and renewable energy.
Vietnam and the UAE have agreed on specific measures to further promote the effectiveness of cooperation between the two countries, such as expediting negotiations and early signing of a Comprehensive Economic Partnership Agreement, early raising the trade turnover to $10 billion in the coming years.
Meanwhile, UAE leaders have expressed no restrictions on Vietnamese goods entering the UAE and encourage the maximum investment of the UAE in Vietnam. UAE desires to cooperate with Vietnam to establish a Microsoft research center in Vietnam.
Vietnam and the UAE have agreed on specific measures to further promote the effectiveness of cooperation between the two countries, such as expediting negotiations and early signing of a Comprehensive Economic Partnership Agreement, early raising the trade turnover to $10 billion in the coming years. The UAE will strengthen support for Vietnam to develop the Halal sector, promote cooperation in green growth, digital transformation, innovation, build financial centers, logistics, sports…
Opportunities to attract investment from hundred-billion-dollar funds
With an increasingly improving and open investment environment, Vietnam has become a promising land, attracting special attention from conglomerates and enormous investment funds from countries in the GCC, particularly investment funds from Saudi Arabia, Qatar, and the UAE.
With an estimated capital of up to $620 billion, the Public Investment Fund of Saudi Arabia (PIF) has invested $160 million in Vietnam through indirect investments. Currently, PIF is also seeking more opportunities to cooperate with Vietnamese partners to invest in major infrastructure development projects.
Meanwhile, the Saudi Arabian Oil Company (Aramco), a leading enterprise of Saudi Arabia, is also interested in investing and building an oil refinery in Vietnam. Aramco is one of the largest oil companies in Saudi Arabia. In 2022, the company recorded a record profit of over $161 billion, an increase of 46% compared to 2021, thanks to the increase in energy prices.
The company is implementing plans to increase its production capacity to 13 million barrels of oil per day by 2027 and develop new low-carbon emission technologies.
“The Middle East is both an expanding economic cooperation market and an export market for Vietnamese goods. Actively enhancing relations with countries in the Middle East has practical significance in opening up new markets, attracting investment and new resources for Vietnam’s development.”
Deputy Minister of Foreign Affairs Do Hung Viet
Furthermore, UAE enterprises such as Mubadala Group, Masdar Energy Group, Abu Dhabi Development Fund, ADQ Sovereign Fund, Abu Dhabi National Oil Company… have expressed great expectations for the Vietnam-UAE Comprehensive Economic Partnership Agreement (CEPA) to promote cooperation, investment in Vietnam in infrastructure, ports, digital transformation, clean energy, renewable energy, offshore wind power, building financial centers in Ho Chi Minh City, healthcare, agriculture…
According to Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan, CEPA is Vietnam’s first Free Trade Agreement (FTA) negotiated with a country in the Middle East and Africa region. This is the starting point for promoting relations not only with the UAE but also with the region. The signing of an FTA with a strong partner in technology, services, and finance like the UAE will also open up many opportunities to access modern technology, abundant capital, and opportunities to learn management skills, service business, create more jobs for workers, and help stabilize social welfare in our country.
However, signing the CEPA with the UAE will only be the first step in promoting deeper relations between Vietnam and the Gulf countries. This is a region with an economic scale of over $2 trillion and has a strategically important position, possessing oil resources, and enormous investment capital. These are important countries in the region, and Vietnam can promote peace, cooperation, and development, opening up opportunities to enter the Middle East region.
