Two decades ago, there was nothing to talk about in terms of contacts or cooperation between Vietnam and the Gulf countries with the exception of Kuwait.

This, however, has gradually changed, particularly since the early 1990s.

With the end of the Cold War and the demise of the Soviet Union and the consequent changes of international relations, Vietnam had to acclimatise itself to the new situation, launching economic reforms, adopting a more moderate foreign policy and opening its doors to foreign investors. Such a new trend has continued in the third millennium with additional measures to fight corruption and improve transparency in public and finance management, as this being regularly an issue of concern to international donors and foreign investors.

Much of this was attributed to the reformist views held by the country's present Prime Minister Nguyen Tan Dung, who was recently named by the reputed magazine World Business as one of the top Asian progressives.

As a result, Vietnam has emerged in recent years as one of the fastest growing economies in Southeast Asia with an annual growth rate of 7-8 per cent, and one of the most attractive destinations for American, European and Japanese investors and tourists. This seems to have encouraged both public and private sectors in the Gulf to eye multi-faceted cooperation with Vietnam, especially with Hanoi's concern about promoting ties with the Gulf region and its repeated assurance that it will create favourable conditions for Gulf investments and businesses. Showing its concern, Hanoi established full diplomatic relations with almost all Gulf countries in recent years, opened an embassy in Kuwait and a consulate in Dubai with a plan to open more embassies soon, and encouraged the Gulf states to have diplomatic representation in Vietnam.

Numerous instances

Examples of the Gulf's recent interest in Vietnam are numerous, including a decision in February by the Saudi-owned Kingdom Holding Company to invest more than $65 million (Dh238.5 million) in building luxurious hotels and resorts in the central sea city of Da Nang; the launching in March by the Qatari national flag carrier, Qatar Airways, of a direct air route connecting Doha and Ho Chi Minh City (formerly Saigon), the first of its kind between Vietnam and the Gulf region; a pledge by the Kuwaitis to pour around $500 million (Dh1.8 billion) into the Nghi Son oil refinery in Vietnam's central province of Thanh Hoa; and a decision by Kuwait to add Vietnamese nationals soon to the list of the those who are allowed to get visas on arrival.

Meanwhile, bilateral contacts on the official level have recently accelerated, witnessing significant developments that would likely boost long term cooperation in such areas as investment, trade, energy and labour.

One example was an unprecedented visit to Hanoi by a Saudi delegation headed by the Kingdom's Minister of State for Foreign Affairs Nizar Bin Obaid Madani in May 2006. During the visit, Saudi Arabia and Vietnam, who established diplomatic relations in October 1999, signed a framework agreement on economic, industrial, investment and technical cooperation.

Another example was an official visit to Hanoi by then Qatar's Foreign Minister Shaikh Hamad Bin Jasim Bin Jabour Al Thani in February this year, during which the two states signed four agreements on double taxation, labour supply, aviation and investment protection.

Always ahead

A more important development, however, was last month's visit to Hanoi by Kuwaiti Prime Minister Shaikh Nasser Mohammad Al Ahmad Al Sabah, as never before has such a high ranking Gulf decision-maker visited the country. In fact, Kuwait was always ahead of other Gulf countries in terms of initiatives and contacts with Asian countries, including Vietnam.

It was the first among its neighbours to establish diplomatic ties with Hanoi (1976), to host the first Vietnamese embassy in the region on its soil (2003), to export to and import from Vietnam, and to have a banking presence in Vietnam through its largest financial institution, the National Bank of Kuwait. Moreover, Kuwait was the first and the only Gulf country to provide Vietnam with development aid through The Kuwait Fund for Arab Economic Development. The latter has so far given Vietnam loans and grants worth more than $100 million (Dh367 million) to fund infrastructure projects.

One of the issues that have been a centre of focus by both the Vietnamese and their Gulf counterparts is Vietnamese labour supply. Hanoi seems to be very interested in providing Gulf countries with skilled and unskilled labourers in large numbers, given the increasing demand for migrant workers in these countries and their policy of diversifying sources of recruitment and lessening dependence on South Asian migrant labour.

According to Vietnam's vice-minister of trade, who recently visited the UAE, nearly 3,000 Vietnamese labourers have been recruited every year to work in the garment industry, construction or hotel businesses in the UAE. He said that Vietnam had the potential to send hundreds of thousands of workers every year, adding that the only problem was their poor English-language capability. This, in addition to the lack of previous interaction, probably explains why the total number of Vietnamese workers in Saudi Arabia has not so far moved beyond 500, despite the fact that the Kingdom was the first Gulf country to allow recruitment from Vietnam.

Dr Abdullah Al Madani is an academic researcher and lecturer on Asian affairs.