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Thursday, June 13, 2024

Hope to return to normality in 2022

The Saigon Times

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Foreign and local companies have been reeling from the effects of the Covid-19 pandemic for over two years. In 2022, many hope to return to normality and bounce back from the Covid-19 pandemic. The Saigon Times spoke to Mr. Oliver Todd, British Consul General in HCMC, about the opportunities for British and local companies to leverage the United Kingdom-Vietnam Free Trade Agreement – UKVFTA in the coming time. Excerpts:

The Saigon Times: Covid-19 has caused huge difficulties for the economy, even bringing businesses to a standstill. What have British companies done to survive the pandemic?

Mr. Oliver Todd: Covid-19 has had an unprecedented impact on the global economy, sending shockwaves through global capital markets. Business operations have been heavily disrupted by harsh lockdowns, supply chain disruptions, and fluctuations in consumer demand.

Vietnam of course managed the pandemic impressively in 2020, but restrictions in 2021 had a significant economic impact. The UK economy, like many others across Europe, was severely impacted throughout 2020. Economic performance has bounced back in 2021, although supply issues have continued to cause delays and product shortages.

UK companies have been forced to innovate due to the changing landscape of the pandemic. Tech companies have adapted well, enabling employees to work remotely whilst maintaining productivity. Many retailers have substantially expanded their ecommerce to reflect changing consumer preferences.

We hope to see some return to normality in 2022, and that we can look to restore tourism, business travel and mutual trade and investment between the UK and Vietnam to the pre-pandemic levels.

The UKVFTA came into effect on May 1, 2021. Are there any positive signs of trade and investment between the two countries?

The UK-Vietnam Strategic Partnership, refreshed in 2020, established our mutual ambitions for an ever-closer political and economic relationship. The implementation of the UKVFTA in early 2021 is another hugely significant milestone, enhancing our bilateral trading partnership. UK-Vietnam trade increased by 16% during the first nine months of 2021 as compared to the same period in 2020. This progress is set to continue: 65% of all tariffs have been eliminated in UK-Vietnam trade, with the number set to increase to 99% following full implementation in 2029. This will only help further bolster our mutual trade.

Aside from trade benefits, the UKVFTA aims to improve and standardize rules enhancing transparency and sustainable development. It strengthens the positions of the UK and Vietnam in global trade and promotes long-term sustainable trade and investment partnerships. It’s clear that Vietnam has the potential to attract a large number of high-quality investment inflows from the UK, particularly in sustainable sectors such as energy, education, healthcare and the environment.

I am delighted that FDI inflow from the UK to Vietnam has increased since the UKVFTA came into effect, with 29 new projects, nine capital increases, and 56 capital contributions totaling roughly US$214 million in the first nine months of 2021. Capital flows are projected to increase too as our two countries develop joint strategies to encourage and attract quality investment.

According to you, what should Vietnamese companies do to leverage the UKVFTA?

Our economies are complementary rather than directly competitive. Vietnam has export strength in agricultural products, textiles, leather and footwear, electronic processing products, and mobile phones, whilst the UK leads in science & technology, financial & professional services and education services. This complementarity makes it easier for the UK and Vietnam to take advantage of UKVFTA’s framework to expand their markets.

I appreciate that Vietnamese businesses are very active in seeking out market opportunities. Vietnam, in particular, has ratified many bilateral and multilateral free trade agreements. This illustrates Vietnamese businesses’ economic integration, flexibility, and adaptability to a wide range of import markets. However, in markets such as the UK, consumers are increasingly conscious that products must meet environmental requirements and sustainability, in addition to higher product quality, hygiene, and safety standards.

I was very pleased to see Vietnam committing to sustainable, green growth through its ambitious COP26 commitments. This will help Vietnam remain competitive. Improved production technology, and product quality following UK quality standards and sustainable development goals, including low carbon and green standards, can help Vietnamese businesses fulfil the needs of high-quality markets such as the UK.

Covid-19 has not gone away. We have no choice but to live with the coronavirus in what we call the new normal. What should British and Vietnamese companies do to bring their businesses to normal?

Looking at the evolution of Covid-19, we must accept that achieving a zero-covid state is not sustainable. We have seen the devastating economic impacts of strict lockdowns during the last two years. Vietnam has positioned itself effectively to deal with future outbreaks through an extremely impressive vaccination rollout.

As Vietnam looks to bounce back from the Covid-19 pandemic, I would encourage a measured approach to reopening, including proportionate measures to ensure interested investors and businesses are able to visit and access the opportunities here. Our trade and investment partnership depends on our ability to build new relationships and exchange ideas and expertise.

The transition to net-zero emissions can also significantly contribute to the recovery. Foreign investors, including UK companies, are increasingly conscious of environmental and climate considerations. This will impact investment decision-making. So, in the context of Vietnam’s exciting COP26 commitments, I would encourage Vietnamese businesses to commit visibly to decarbonization goals and work with the international business community to seek their support on implementing decarbonization strategies.

As a new consul general, what would you do to support investments between Vietnam and the United Kingdom in the coming time?

Continuing to promote the UK’s clean growth offer is our primary goal this year. As Vietnam looks to implement a net-zero roadmap, there will be hugely exciting opportunities for the UK and Vietnam to co-operate across clean growth sectors, from renewable energy to green infrastructure and sustainable technology. These are core strengths of the UK, and we look forward to assisting Vietnam with its climate and decarbonization aims. We are committed to ensuring access to international climate finance and sharing policy experiences, to help develop the renewable energy sector.

We will continue to develop collaborative programs on emissions reduction and adaptation to the effects of climate change. We hope to see more ambitious energy projects being approved in Vietnam, opening up opportunities for UK investors. We also look forward to continuing to support Vietnam’s urban development – for example, in HCMC, the UK will continue to provide technology to support sustainable public transportation development, flood control, and financial services support. We hope our businesses can help turn the city into a regional financial hub.

Vietnam has rung in the Lunar New Year, the Year of the Tiger. What do you expect to see in the New Year?

I understand that here in Asia, the tiger is a mascot symbolizing authority, strength, bravery and power. All of these traits are very fitting for Vietnam as it looks beyond Covid toward a phased reopening and economic recovery. I hope that in this year of the tiger, Vietnam’s economy continues to bounce back strongly from the pandemic and that our bilateral relationship continues to strengthen.

Reported by Pham Le

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