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Sunday, September 25 2022
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Date 26/08/2021-17:52:00 PM
Fostering investment cooperation between Vietnam and the Middle East: Potential, Opportunities and New Approaches
(MPI) – To futher improve the efficiency of investment cooperation between Vietnam and the Middle Eastern countries, the Ministry of Planning and Investment and the Ministry of Foreign Affairs coordinated to organize a webinar themed “Fostering investment cooperation between Vietnam and the Middle East: potential, new opportunities and approaches” on August 26th, 2021. Deputy Minister Nguyen Thi Bich Ngoc and Deputy Minister Pham Quang Hieu co-chaired the webinar.
Overview of the webinar. Photo: MPI

Deputy Minister Pham Quang Hieu at the webinar has considered this is an opportunity to discuss the trend of foreign investment of the Middle East, potential of Vietnam and actual investment cooperation between Vietnam and the Middle East, thereby proposing new directions and ways to strengthen substantive investment cooperation between the parties. He has also put an emphasis on both the Middle East and Vietnam’s potential and advantages. To respond to the pandemic and gradually re-open the economy, many Middle Eastern countries and Vietnam have been making adjustments to economic, trade, investment and digital transformation policies to improve economic capacity, national competitiveness and green, sustainable and innovative development. These important factors also contribute to opening up new cooperation opportunities and improving the efficiency of investment cooperation between the Middle East and Vietnam.

He suggested that the webinar focus on discussing and evaluating the policies, foreign investment trends and regional investment funds of the Middle Eastern countries, in both directly and indirectly, thereby clearly identifying the priority areas that the Middle Eastern countries seek to invest; clarifying the potential and strengths of Vietnam in attracting foreign investment, especially from the Middle East in markets, business environment, incentive policies, human resources, infrastructure and digital transformation speed, etc. specifying the successes, limitations and obstacles in investment cooperation between Vietnam and the Middle East over the past time in mechanisms, policies, incentives; exchanging and sharing investment experiences and models of successful regional enterprises and corporations, thereby proposing new innovative approaches and ways to attract investment from the Middle East to Vietnam.

Deputy Minister Nguyen Thi Bich Ngoc at the webinar said that the Innovation, Vietnam always maintained socio-political stability and high, sustainable macroeconomic growth after 35 years of the Innovation (1986-2021). In the pandemic outbreak since the beginning of 2020, Vietnam has proposed proactive and effective solutions to achieve the dual goal of ensuring safety and developing the economy. Hence, Vietnam was one of the few countries in the world to achieve the positive growth and the macro economy remained stable (with GDP in 6 months at 5.64%) in the first 6 months of 2021. Vietnam expects to achieve the GDP growth about 6.7% in 2021.

Regarding foreign investment cooperation, although the global FDI in 2021 has not had any signs of recovery, Vietnam still achieves encouraging results. 141 countries and territories have invested in Vietnam at more than 34,000 projects with total registered capital of over USD 400 billion. In the first 8 months of 2021, the total registered capital of FDI reached over USD 19.1 billion, especially newly registered and realized investment capital continued to increase by 16.3% and 2.0% over the same period. These encouraging numbers affirmed the Vietnamese Government’ efforts and determination in attracting foreign investment capital.

Over the years, through the cooperative efforts of diplomatic agencies, ministries and businesses of both parties, the Middle Eastern businesses have known Vietnam as an emerging and potential economic market with a rapid and stable growth and great openness and the market of nearly 100 million people with young workforce; of which the middle class accounts for 15% of the population and grows rapidly, ranks the sixth most attractive retail growth market globally.

However, the investment capital from countries in the region into Vietnam is still limited, not properly reflecting the potential and capacity of cooperation between the sides. There are 13of 16 the Middle Eastern countriesinvesting in 136 projects in Vietnam with the total investment capital of USD 917.1 million (this figure excludes the capital of USD 832.4 million (35.1%) of Kuwait Petroleum at the Nghi Son Refinery and Petrochemical Plant Project - a joint venture between Vietnam, Kuwait and Japan with total investment of USD 9 billion, contributed capital of USD 2.4 billion. Regarding Vietnam’s investment in the Middle East, there are only 10 projects with total capital of USD 90.4 million in 6 countries.

Deputy Minister Nguyen Thi Bich Ngoc had her speech. Photo: MPI

Deputy Minister Ngoc said that Vietnam welcomed projects with high-quality foreign investment in accordance with Vietnam's requirements for large capital scale; advanced, new, high-tech and clean technologies; modern management, high added value, spillover effects, technology transfer and connecting domestic enterprises with global production and supply chains.

To prepare for the high-quality foreign investment inflows in the coming time, Vietnam has been proactively preparing input conditions for investment activities, such as preparing infrastructure and clear ground; accelerating the human resource training to meet foreign investors’ requirements ; continuing to improve the business investment environment towards OECD standards;enhancing the country's competitiveness; establishing a Working Group to promote foreign investment cooperation and welcome multinational corporations and large enterprises to invest and timely catch investment cooperation opportunities in the new situation.

At the same time, Vietnam has also strengthened institutions and investment-business environment such as issuing new Laws on Investment, Law on Enterprises, and Law on Public-Private Partnership (PPP) with simplification of investment procedures, transparency, diversification in investment forms, and added special investment incentives. Besides institutional reforms, Vietnam has signed the Regional Comprehensive Economic Partnership (RCEP),the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the European Union-Vietnam Free Trade Agreement (EVFTA) and other free trade agreements that connect Vietnam with 55 countries, including 15 in the G20 group.

The Middle Eastern countries have strengths in energy, finance - banking, infrastructure, real estate, tourism, logistics in accordance with Vietnam’s great demand for investment and cooperation . The Middle East’s economic centers such as Kuwait, Dubai, Abu Dhabi and Qatar are gateways to Africa’s market, forming connections with the Middle East - Africa market including 70 countries with a population of 1.6 billion people and GDP of nearly USD 5,000 billion; and a place where many partners have good traditional and friendly relations with Vietnam. On the contrary, Vietnam is the gateway to ASEAN and China for Middle Eastern firms to invest and do business in those markets. Vietnam also has strengths with many supply chains in electronic industry, high-quality agricultural, forestry and fishery processing with diversified types, which are really necessary items for the Middle Eastern and African markets.

To create a new breakthrough in investment cooperation between Vietnam and the Middle East, Deputy Minister Nguyen Thi Bich Ngoc suggested some cooperation orientations in creating favorable conditions for Vietnamese firms with strong potential to become a partner with Middle Eastern firms. Researching cooperation models with the third partners to jointly invest in large projects in Vietnam (like the Nghi Son Refinery Project).

Building a cooperation mechanism, connecting Vietnamese investment funds and financial institutions with the Middle East’s investment funds and enterprises to invest in large infrastructure programs of Vietnam such as transport infrastructure projects (airports, seaports, urban traffic, highways), environmental projects, industrial park infrastructure and so on.

Creating favorable conditions for the Middle Eastern firms to expand imports of Halal foods, agricultural products, fruits, fishery, etc. from Vietnam. Encouraging cooperation with Vietnamese firms to build supply chains (including the establishment of finishing-product enterprises in the Middle Eastern countries to reduce costs) to become the focal point for exporting industrial, agricultural and forestry products to the Gulf countries and the Middle East.

Deputy Minister Ngoc stressed that with the vision “Vietnam’s growth is an opportunity to promote growth for Middle Eastern countries” and “The Middle East’s prosperty is also an opportunity for Vietnam’s development”, Vietnam was always ready to open and receive new investment projects of Middle Eastern investors. The MPI hascommitted to coordinating with ministries, line ministries and localities to work with business organizations to create new cooperation models and new development efforts for the Middle Eastern and Vietnamese enterprises.

Deputy Director of Foreign Investment Agency, MPI Do Van Su. Photo: MPI

Presenting policies to attract foreign investment to Vietnam in the new context, Do Van Su as Deputy Director of Foreign Investment Agency, MPI informed about FDI performance in Vietnam; Investment of Middle Eastern countries in Vietnam; Benefits of investing in Vietnam; Orientation to attract foreign investment and preparation of Vietnam. He said that there have been 141 countries and territories investing in Vietnam with 34,072 projects. The accumulated registered capital is over USD 400.6 billion. South Korea, Japan, Singapore, Taiwan and Hong Kong are the biggest investors in Vietnam. The 13 of 140 Middle Eastern countries and territories have invested in 136 projects in Vietnam with total registered capital of over USD 917.13 million .

Vietnam’s potential investment-attracted fields are manufacturing industry; biotechnology; renewable energy; real estate; banking and insurance; agriculture and processing; pharmaceutical and health; information technology and software; infrastructure and PPP; M&A start-ups and so on.

The webinar included the online participation of many investment funds, corporations, enterprises of Vietnam, the Middle East and other countries; foreign and Vietnamese diplomatic missions in the region, and representatives of ministries, line ministries, department and localities. The delegates pointed out potentials, advantages, difficulties and obstacles, the foreign investment trends of the Middle East, the potential of the Vietnamese market; and identified new and specific solutions to further improve the efficiency of investment cooperation between both parties. This was also an opportunity to connect the business community, localities and potential partners of the two parties./.

Ministry of Planning and Investment

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