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Mr. Simon Pugh, President of the Australian Chamber of Commerce in Vietnam (Auscham).
In 2023, Australia and Vietnam celebrated 50 years of diplomatic relations. How do you assess the long-term cooperative relationship between the two countries?
In 2019, Australia and Vietnam agreed to develop an Enhanced Economic Engagement Strategy with the aim of making the two countries one of each other’s top 10 trading partners and doubling two-way investment. By 2023, Vietnam will have become Australia’s 10th largest trading partner and Australia will become Vietnam’s 7th largest trading partner.
In addition to the rapid growth in bilateral trade, the two countries also cooperate very closely in other important areas.
According to you, what are the opportunities in promoting investment and trade relations between the two countries?
Australia has a large Vietnamese community, many of whom have returned to Vietnam to do business and actively participate in activities connecting the two countries. Vietnam is on the way to becoming an advanced country, with a rapidly growing middle class and increasing consumer demand for quality products such as food, beverages and education - areas in which Australia is very strong.
In terms of education, in addition to universities such as RMIT and Western Sydney, Australia also has vocational training programs for Vietnamese youth who do not continue their education at university level. We provide vocational training in construction and accounting so that they can enter the job market with a decent salary without having to go to university. The demand for this vocational training is also very high in Vietnam.
Australia is renowned for its food quality and biosecurity. The Vietnamese market is favouring these products. The Vietnamese and Australian governments are both keen to see how Vietnamese suppliers can connect to the Australian supply chain.
We are in need of diversifying our supply chain. Vietnam, with its diverse manufacturing base, has the opportunity to join this supply chain. However, we are lacking a specific platform to connect Vietnamese manufacturing facilities with the Australian supply chain. This is an issue that Vietnam needs to address as soon as possible.
As the Vietnamese market continues to mature and develop, the trend is gradually shifting from fossil fuels to green, environmentally friendly energy. Australia has a very strong green energy industry and we are ready to cooperate with Vietnam in this field.
Other areas where the two sides can cooperate are infrastructure development and digital transformation. These are inevitable trends as we enter the 21st century.
But opportunities always come with challenges, don't they, sir?
Vietnam is an attractive investment destination for Australian businesses, but the Vietnamese Government and businesses still need to make more efforts to promote themselves to Australian businesses. In addition, Australian businesses investing in Vietnam also face barriers surrounding the process of establishing businesses, applying for work permits and temporary residence cards, and APEC cards for experts.
Australians love to travel, especially to natural landscapes. However, Vietnam’s spending on tourism promotion is still very low, so many Australians do not know about Vietnam. We are missing an opportunity here, we need to have a strategy to attract visitors to come back after the first time.
From a business perspective, foreign companies investing in Vietnam will face a complicated and time-consuming process with unclear regulations. For example, recently, the progress of many projects has been delayed due to changes in regulations related to fire prevention and fighting.
These issues need to be sorted out, as Vietnam is just one of many options for foreign investors in the region. This is Vietnam’s moment. Vietnam is a hot topic on forums, a country that every business is paying attention to. But if Vietnam does not seize these opportunities now and consolidate its position, it will be surpassed by some other countries.
How do Australian investors feel about the Vietnamese market recently?
Since 2021, I have taken on the role of President of the Australian Chamber of Commerce and have seen a record number of inquiries from Australian businesses wanting to explore and do business in Vietnam. But again, we must remember that we are in a critical moment. If we do not seize the opportunities, they will pass us by, so let's be more proactive and faster to seize these opportunities.
In your opinion, which sector is most interested by Australian investors in the Vietnamese market?
Green energy and digital transformation are areas that both sides are pursuing. To attract Australian businesses to invest in Vietnam, the Australian Department of Foreign Affairs and Trade has signed an agreement with Auscham to establish an industrial hub connecting Australian industrial and food, fibre and forestry groups with the Vietnamese market.
If an Australian business asked why they should invest in Vietnam, what would you tell them?
Stable political system, stable currency and a strong domestic market of over 100 million people, the middle class is growing rapidly. Last but not least, I would tell them: you can achieve any goal in Vietnam with the enthusiasm, hard work and dedication of the local human resources./. Source
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