Trade between UAE and Vietnam set for further growth

Trade with Vietnam is expected to expand further this year as visitors from the country surge. Vietnam’s trade with the UAE is predicted to increase by as much as 15 per cent to US$7 billion (Dh25.7bn) this year, says Pham Binh Dam, Vietnam’s ambassador to the UAE.

“The trade between Vietnam and the UAE has been growing very strongly in the past five years,” Mr Dam told The National at the start of a series of Vietnam Week trade events in Dubai.

It includes a roadshow by 20 agricultural and foodstuff suppliers from the Socialist Republic.

About $5.7bn of the UAE’s $6.1bn trade with Vietnam last year came through Vietnamese imports, with electronic (mainly Samsung-branded) goods the biggest category, followed by computer products and consumer goods.

Pham Trung Nghia, the commercial counsellor and head of Vietnam’s trade office in Dubai, said the UAE imported about $250m of food from Vietnam, including $100m of pepper, $30m of rice and $25m of coffee.

Mr Dam said that the UAE was also benefiting from the relationship, particularly through the burgeoning number of tourists from Vietnam. In 2013, 500 visit visas were issued to Vietnamese nationals. This increased to 1,200 in 2014 and leapt to 25,000 last year.

“On the one hand, people in Vietnam know more about Dubai because of some top-rated electronic newspapers that run articles about Dubai almost every two or three days,” said Mr Dam. “On the other hand, the disposable income that the Vietnamese people have for travelling [has increased].”

He also said there were opportunities for UAE investors – especially those involved in hospitality and real estate development – to benefit from rising tourism into Vietnam, which received 6 million inbound visitors last year.

“What Vietnam lacks is the strong points of UAE enterprises. They have very strong expertise and experience in the development of tourism – so investment in hospitality and real estate in Vietnam is perhaps the area with most potential,” he said.

He said that there had been “strong intention on the UAE’s part” to invest in Vietnam’s tourism sector between 2005-07, but this momentum had been disrupted following the 2008 global financial crisis.

“But now, we have the right conditions again. Vietnam has been able to maintain economic growth, with a fast-rising middle class.”

There is also plenty of investment potential for privately financing projects including roads, ports, airports and urban transport systems, he said.

The developer that had done the most work in Vietnam before the financial crisis was Dubai-based Limitless, which first announced plans to build a mixed-use project known as Halong Star in 2007.

The project is based at a Unesco World Heritage site in north-east Vietnam known as Halong Bay. It finally broke ground on the $550m project last month, and a Limitless spokesman told The National that Vietnam offers “extensive opportunities for investment”.

“Halong Bay, where our Halong Star project is located, saw a 9 per cent growth in visitors in the first quarter of 2016 compared to the same period last year, with foreign visitors increasing by 33 per cent in the same period.”

In December, Emaar Properties gained approval for a 427-hectare joint venture with local developer Bitexco Group in Ho Chi Minh City. Nakheel’s chairman, Ali Rashid Lootah, last month told a property conference in Cannes that it is also planning a joint venture in the same city.

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