06:00 | 13/12/2021 Cooperation
(VEN) - Vietnam and Switzerland celebrate the 50th anniversary of diplomatic relations with confidence that a strong foundation has been laid for a repeat performance. Martin Maier, Consul General of Switzerland in Ho Chi Minh City, shares with Vietnam Economic News’ My Phung some of the milestones and salient features of the bilateral relationship.
Vietnam and Switzerland mark 50 years of diplomatic relations and 30 years of development cooperation this year. Can you share with us your thoughts on these milestones?
Already in the second half of the 19th century, Swiss trading companies were active in the region, and Swiss consular agencies were temporarily established in Hai Phong and Saigon, close to maritime ports. In 1954, Switzerland as a neutral country hosted the Geneva Conference. Formal diplomatic relations between Switzerland and Vietnam were established in 1971 and the first Swiss Embassy in Hanoi started work in a small office in the Metropole Hotel in 1973. Ever since, the friendly ties between the two countries have grown and expanded across a wide spectrum.
In view of the steadily growing relations between our two countries, Switzerland opened a Consulate General in Ho Chi Minh City in 2015. This official Swiss presence in the former Saigon signals the importance Switzerland pays to the South of Vietnam.
The many high-level visits and meetings during international conferences taking place regularly are a visible expression of our excellent diplomatic relations. Switzerland’s President Federal Councilor Guy Parmelin visited Hanoi and Ho Chi Minh City in his capacity as Minister for Economic Affairs, Education and Research in 2019, and met with President Nguyen Xuan Phuc on the sidelines of the UN General Assembly High Level Segment in New York last September. Our Vice-President and Foreign Minister, Federal Councilor Ignazio Cassis, visited Hanoi this past August, and President Nguyen Xuan Phuc visited Switzerland just at the end of November as part of our 50-year celebrations underscoring the depth of our relations, not least by providing a substantial amount of Covid assistance to assist Vietnam in its fight against the pandemic.
Since 2008, Vietnam has been one of eight priority countries for Switzerland in terms of economic development and cooperation. How does this play out on the ground and what future outlook does it generate?
The State Secretariat for Economic Affairs SECO is responsible for the economic development cooperation of Switzerland. It is represented in Vietnam through the Swiss Cooperation Office in our Embassy in Hanoi. My country looks back at over 30 years of development cooperation in Vietnam during which Switzerland has provided over VND15 trillion in support. The overall objective of Switzerland’s economic cooperation and development program over the last years has been to support inclusive and sustainable economic growth to improve the lives of people in Vietnam. SECO has done this through a multitude of different projects and its extensive partnership network. SECO aims to use Swiss expertise and innovative approaches to overcome global challenges in its partner countries. It is important for Switzerland to respond to the needs of the Vietnamese economy. In the past, SECO has supported Vietnam to improve the effectiveness of economic policies and institutions, create a competitive private sector with access to the global value chains, and to foster sustainable and climate-resilient urban development.
Switzerland has just launched the new economic development Cooperation Program 2021-2024 with Vietnam. The Swiss cooperation will build on existing partnerships, lessons learned and results achieved. One example is the support provided for the use of digital technologies for urban flood risk management, and the introduction of the bus rapid transit in Ho Chi Minh City. In addition, SECO is supporting the development of the Thu Duc city master plan and promotes integrated climate resilience and transit-oriented urban development for the entire city. In general, we will focus on areas where SECO has a proven record of accomplishment and where it can add value by bringing in Swiss expertise and international good practices. The new program is well aligned with Vietnam’s strategic orientation and will support Vietnam in achieving market-oriented, sustainable growth.
|Vietnamese President Nguyen Xuan Phuc delivered a speech at the Vietnam-Switzerland Business Summit on November 26 in Bern City - Photo: VNA|
What about trade and investment relations? Can you say something about the FTA between Vietnam and the European Free Trade Association (EFTA), which is under negotiation?
In collaboration with the Swiss trade promotion agency, Switzerland Global Enterprise S-GE, and the Embassy in Hanoi, the Consulate General enhanced many services to cater for the needs of Swiss companies during the last years. These efforts contributed to increased trade and investment activities.
The free trade agreement between Vietnam and the European Free Trade Association (EFTA), of which Switzerland is a member state, will undoubtedly contribute to enhancing Switzerland’s economic exchange with Vietnam very positively and bolster the trade balance, which is and will continue to be very much in Vietnam’s favor. Vietnam and the EFTA member states aim at a next generation FTA that not only lowers customs barriers but also provides enhanced protection of intellectual properties and investments as well as access to the market and public projects. The negotiations, which started in 2012, are well under way and both sides are dedicated to have them concluded in the near future.
It is said that Vietnam has the potential to become an even more attractive ASEAN investment destination after the pandemic? Will this be true for Swiss businesses?
Currently over 100 Swiss companies operate in Vietnam. They range from multinational companies to SMEs and are active in different sectors, including pharmaceuticals, construction, food processing, machinery, IT, logistics and trading.
There are probably as many reasons for why Swiss companies choose to invest in Vietnam, as there are such companies. A common trait is that they see Vietnam as a good place to do business; taking advantage of its sizable domestic market, its young labor force, its integration into regional and global supply chains as well as the country’s potential to grow.
|Vietnamese President Nguyen Xuan Phuc (left) and President of the Swiss Confederation Guy Parmelin presided over a press conference on November 26 in Switzerland - Photo: VNA|
Switzerland and Vietnam signed an agreement on the implementation of the Trade Policy and Export Promotion (SwissTrade) project on October 22. Can you tell us more about it? How will the project help Vietnam’s SMEs access the Swiss market?
This project improves trade performance and international competitiveness of SMEs by enhancing the framework conditions for trade, improving public-private dialogue mechanisms, and strengthening the eco-system for trade promotion. The project runs from 2021-2024 and will be supported by Switzerland with a grant of 5 million Swiss Francs (around VND125 billion). The Vietnamese counterpart funding amounts to about VND16.5 billion.
Vietnam’s development record over the past 35 years of reform is remarkable. Economic reforms and trade liberalization have spurred rapid economic growth and development. However, while trade has grown strongly in these years, framework conditions still need further improvement. A lack of strategic orientation in export promotion, and a still fragmented and nascent ecosystem to support companies leave many small businesses struggling to access international markets and international value chains.
The SwissTrade project will help address these challenges. It provides technical assistance to shape the key strategic directions for the Import-Export Development Strategy of Vietnam, and to establish public-private dialogue mechanisms to further the exchange between the private sector and the national authorities on trade policies, trade facilitation and trade promotion. The project will also strengthen the capacity of Business Support Organizations (BSOs) in delivering export promotion services to SMEs to improve their competitiveness and participation in global value chains. Particular attention will be paid to the effects of the Covid-19 pandemic and the promotion of digitization.
Given the pandemic and the likely post pandemic scenarios, what are your expectations for bilateral relations in the coming decades?
Vietnam and Switzerland have managed the pandemic under very different circumstances and with tailored strategies so far well. However, for governments around the world it remains an uphill struggle prone of setbacks and challenges. Besides the continuing effort to protect the population from resurgences, the focus shifts to a comprehensive inoculation effort in both our countries and the revitalization of the economy.
I am confident that our two countries will regain the 2019 level of bilateral trade fast once the situation is stabilized and move successfully beyond that point for the next 50 years of our mutual beneficial relations. With the promising outlook Vietnam is offering, I am convinced that Swiss companies will strengthen their engagement here and new investments will be directed to Vietnam. The recent visit of President Nguyen Xuan Phuc and his delegation to Switzerland with high-level political, economic and scientific talks has been very fruitful and is a valuable preparation for our post-pandemic relations. The Swiss Embassy in Hanoi and the Swiss Consulate General in Ho Chi Minh City will continue their efforts to enhance political, trade, scientific, cultural and people-to-people relations between our two nations. n