Business | General
Mohammad visit to boost UAE-Vietnam ties
The UAE's non-oil trade with Vietnam jumped four-fold to $127 million in 2005 from $37 million in 2000, a Dubai Chamber of Commerce and Industry (DCCI) study released yesterday said.
- Gulf News Report
- Published: 23:30 September 2, 2007
Dubai: The UAE's non-oil trade with Vietnam jumped four-fold to $127 million in 2005 from $37 million in 2000, a Dubai Chamber of Commerce and Industry (DCCI) study released yesterday said.
Although this does not represent a huge volume, the figures hint at the potential for growth in bilateral trade - something the official visit of His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, is expected to achieve.
Dubai Ports World operates a container terminal in Vietnam. It will will be a catalyst to further UAE investment in the Southeast Asian state, which has witnessed fast economic growth in recent years.
Vietnam has been attracting a large sum of foreign direct investment (FDI) due to its competitive advantage in offering a cheap labour since the beginning of economic reform it initiated a few years ago.
The country displayed a remarkable trade performance, with total trade more than doubling in just six years.
"In 2002, the country's total trade amounted to $30.1 billion, ballooning to $69.4 billion in 2005," the DCCI said in its study, which shows that the performance "could be credited both to surge in imports and exports".
From a sluggish annual growth of only four per cent in 2001, import growth accelerated by 22 per cent the following year to register a total of $20 billion. By 2003 total imports was growing at an annual rate of 28 per cent to reach $25 billion; then it increased by 27 per cent the following year, to a total import value of $32 billion, the study said.
A slight slowdown was registered in 2005, as the country's infrastructures were being put in place. During the year, imports grew by 16 per cent to a total value of $37 billion.
The DCCI study also revealed that the UAE ranked 24 among Vietnam's export markets from 2000 to 2005. Vietnam's exports to the UAE during the same period increased from $24 million to $ 122 million.
Important source
"Vietnam is considered an important source that meets the UAE's needs of agricultural products thanks to Vietnam's strong agricultural sector, while Dubai could be a vital stop port for the Vietnamese commodities exported to Europe and Africa," the DCCI study said.
According to the study, the industrial sectors in the UAE and Vietnam occupy the lead share of their respective GDPs. The services sector contributes 35.8 per cent of the UAE's GDP, while its contribution to Vietnam's GDP is 38.1 per cent.
The growth of UAE's non-oil trade with the world had been stable between 2000 and 2005, posting increasing annual growth of 14 per cent in 2001 and peaking at 37 per cent in 2004, before slackening slightly at 25 per cent in 2005.
On the other hand, UAE's trade pattern with Vietnam underwent significant changes during the period. From a 19-per cent decline in total trade in 2001, it rebounded by 24 per cent in 2002 and by another 20 per cent the following year. In 2004, the value nearly doubled the previous year's record, increasing by 92 per cent, before slowing down a bit to a growth of 48 per cent.
While imports more than doubled during the six-year period, export growth had been phenomenal, increasing from less than a 1$ million in 2000 to $48.2 million in 2005. Highest growth of 316 per cent was recorded between 2003 and 2004, when export value jumped from only about $6 million to $25 million.
The study said Vietnam's new policy to enhance its economic relations with world and supporting foreign direct investment helped it to high growth. Vietnam issued new rules and legislations and offered attractive incentives to encourage the influx of foreign investments to the country.
According to the DCCI study, the UAE's imports from Vietnam surpassed its exports to the same country. The UAE's imports from Vietnam include foodstuff, furniture, coffee, tea, spices, tobacco, fruits, electrical equipment and machinery, while its exports to Vietnam include oil seeds, plants, fodder and plastics.
Cooperation
The study also mentioned that the UAE businessmen delegation to Vietnam will discuss a number of issues focusing on the economic sectors through which both countries could develop mutual cooperation. The UAE, according to the study, could be an important transit port for the Vietnamese commodities exported to Europe and Africa. The UAE national businessmen could also benefit from the growing agricultural sector in Vietnam either by direct trade or direct investment in terms of manufacturing and processing food.
Meanwhile, Vietnam could also become a new market for the UAE's metal products.
On the other hand, DCCI is going to organise a business meeting in Hanoi where the members of the UAE delegation and their Vietnamese counterparts could meet to discuss ways to enhance bilateral economic relations
Foreign trade statistics of Vietnam reflect stability of sources of the country's imports in the region. However, the same source of data shows relative weakness of Vietnam in the European and African markets and vice-versa. Given UAE's established trade routes to these two large continents, the UAE can be an important transshipment port in the exchange of goods between Vietnam and Europe and Africa.
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