No limits in collaboration
Despite a population of only about 60 million people, the GCC, comprising 6 countries: Saudi Arabia, the United Arab Emirates (UAE), Qatar, Kuwait, Bahrain, and Oman, is a highly developed region with a GDP of about $2 trillion in 2022.
In addition to its strength in oil, in recent years, economic activities, trade, and investment in the region have been vibrant. Cities like Dubai (UAE), Doha (Qatar) have become leading global centers for finance, information technology, tourism, seaports, and real estate.
Meanwhile, Saudi Arabia, with its ambitious Vision 2030 strategy, is undergoing rapid changes to transition away from oil-dependence. The country is currently implementing mega-projects and future cities with investments of hundreds of billions of dollars. It is worth noting that Qatar, UAE, and Saudi Arabia all have massive investment funds with capital of hundreds of billions of dollars.
Prime Minister Pham Minh Chinh witnessing the signing of a memorandum of understanding between Vietnamese and UAE entities
Given the potential of this region, the visits by Prime Minister Pham Minh Chinh to Saudi Arabia (October 2023) and the UAE (December 2023) sent a message of Vietnam’s interest and priority in developing relations with GCC partners in particular and the Middle East region in general.
According to Deputy Minister of Foreign Affairs Do Hung Viet, actively strengthening relations with countries in the region has practical significance in opening new markets, increasing exports, attracting investment and new resources for Vietnam’s development in the future.
With an increasingly high position, Vietnam has also received special attention from other countries. Qatar’s Emir Sheikh Tamim bin Hamad Al-Thani affirmed in a meeting with Prime Minister Pham Minh Chinh in Riyadh that there are “no limits to cooperation between the two countries, ready to coordinate to resolve any obstacles and remove all barriers to enhance further cooperation with Vietnam”.
Meanwhile, Crown Prince, Prime Minister of Saudi Arabia Mohammed bin Salman emphasized that Vietnam is the leading partner in Southeast Asia. He also expressed his desire to visit Vietnam in 2024, the 25th anniversary of the establishment of diplomatic relations between the two countries (1999-2024).
At the same time, the Crown Prince affirmed that he would instruct the Saudi Arabian Public Investment Fund to soon discuss and expand investments in Vietnam, especially in traditional and renewable energy sectors.
Vietnam and the UAE have agreed on specific measures to further promote the effectiveness of cooperation between the two countries, such as accelerating negotiations and early signing of a Comprehensive Economic Partnership Agreement, and increasing trade turnover to $10 billion in the coming years.
On the other hand, UAE leaders have expressed no restrictions on Vietnamese goods entering the UAE and encouraged maximum UAE investments in Vietnam. The UAE hopes 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 accelerating negotiations and early signing of a Comprehensive Economic Partnership Agreement, and increasing trade turnover to $10 billion in the coming years. The UAE is enhancing support for Vietnam to develop the Halal industry, promoting cooperation in green growth, digital transformation, innovation, financial and logistic centers, and sports.
Investment opportunities from billions of dollars funds
With an improving investment environment and increasing openness, recently Vietnam has become a land of great potential, attracting special attention from conglomerates and massive investment funds of countries in the GCC, especially investment funds from Saudi Arabia, Qatar, and the UAE.
With an estimated capital of up to $620 billion, the Saudi Arabian Public Investment Fund (PIF) has invested $160 million in Vietnam through indirect investment. Currently, PIF is also seeking more opportunities to cooperate with Vietnamese partners to invest in large infrastructure development projects.
Meanwhile, Saudi Arabia’s leading company, the Petroleum and Oil Company Aramco, is also considering investing in establishing 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, a 46% increase compared to 2021 due to rising energy prices.
The company is implementing plans to increase production to 13 million barrels per day by 2027 and develop new low-carbon emission technologies.
“The Middle East is both a market for Vietnam’s exports and an attractive source of investment from large corporations and investment funds. Actively strengthening relations with Gulf countries is of practical significance in opening new markets, attracting investment and new resources for Vietnam’s development in the future.”
Deputy Minister of Foreign Affairs Do Hung Viet
In addition, UAE companies such as Mubadala Group, Masdar Energy Group, Abu Dhabi Development Fund, ADQ Sovereign Fund, National Petroleum Company Abu Dhabi… have expressed great expectations for the Vietnam-UAE Comprehensive Economic Partnership Agreement (CEPA) to promote cooperation and investment in Vietnam in various sectors such as infrastructure, ports, digital transformation, clean energy, renewable energy, offshore wind power, and financial centers in Ho Chi Minh City, healthcare, and 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 a starting point for promoting relations not only with the UAE but also with the whole region. The signing of the FTA with a strong partner in technology, services, and finance like the UAE will open up many opportunities to access modern technology, abundant capital, learn management skills, business services, and create more jobs for our workers, contributing to social stability and 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 extremely important strategic position, which holds oil resources as well as immense investment capital. These are important countries in the region, providing a basis for Vietnam to promote peace, cooperation, and development, and to open up opportunities in the Middle East.
