Untapped potential of Vietnam-Mideast trade, investment

09:30 | 31/05/2018 Cooperation

(VEN) - Vietnam and the Middle East (Mideast) have the potential to promote trade and investment cooperation. The Middle East is a large market with more than 300 million consumers. The purchasing power and consumer spending in this market is high, whereas technical requirements are not strict. 

untapped potential of vietnam mideast trade investment
Vietnamese and Middle East companies discuss trade and investment opportunities

Potential market

Speaking at a Vietnam-Middle East trade forum in Ho Chi Minh City on May 11, Le Thai Hoa, Deputy Director of the Ministry of Industry and Trade (MoIT)’s Asia and Africa Markets Department, the Middle East spends about US$40 billion on food and foodstuff imports annually. The region’s imports are expected to reach US$70 billion by 2035. Potential Middle East markets for Vietnamese businesses include the United Arab Emirates (UAE), Turkey, Saudi Arabia and Iran.

Trade between Vietnam and the Middle East has grown considerably. Last year, bilateral trade reached US$12 billion, including US$9 billion worth of Vietnamese exports to the Middle East and about US$3 billion worth of imports from this region. Apart from food and agricultural products, the Middle East also has high demand for mobile phones, electronic devices, consumer goods, leather and footwear, which are major Vietnamese exports.

The UAE is Vietnam’s largest trading partner in the Middle East, with Vietnamese exports to this market exceeding US$5 billion in 2017. Vietnamese Ambassador to the UAE Trinh Vinh Quang said Vietnam and the UAE have advantages that can complement each other. Vietnam offers a gateway for UAE companies to access the ASEAN market, while the UAE offers a gateway to the Middle East for Vietnamese businesses.

UAE Ambassador to Vietnam Obaid Al Dhaheri affirmed Vietnam is a leading trading partner of the UAE in the Southeast Asian region. The two countries have the potential to promote cooperation in a wide range of fields, such as renewable energy, metallurgy (aluminum and steel), ship repair, petrochemicals, engineering and manufacturing. UAE businesses have invested in Vietnam in the fields of infrastructure, real estate, mining, production, tourism and services. They have had 14 direct investment projects in Vietnam with total value of more than US$26 million.

Promoting business connections

Le Thai Hoa said to penetrate the Middle East market, Vietnamese companies need to be aware of local business habits, as well as local regulations and necessary certifications for exports to this market. For example, Halal certification, a process that ensures the features and quality of products according to the rules established by the Islamic Council, is required for food and foodstuff exports to the UAE.

Do Ha Nam, Vice President of the Vietnam Coffee and Cocoa Association, said the Middle East has very high demand for rice, coffee, pepper and seafood. Dubai, one of the most open economies in the region, offers a gateway to the rest of the Middle East. Vietnamese companies should participate in annual trade fairs in Dubai to meet purchasers from all Middle East countries and neighboring areas to establish long-term cooperation relations.

Ngoc Thao