Vietnam’s bilateral relationship with Australia is regarded as politically, strategically and economically important, and it has been steadily strengthening. With the establishment of diplomatic relations in February 1973, the 35thanniversary of diplomatic relations between the two countries will be celebrated in 2008.
Comprehensive Partnership (2009)
Memoranda of Understanding: Cooperation in Intellectual Property (1995), Sports Cooperation (1999), Education (1993, renewed 1999 and 2003), Immigration (2001), Social Services (2002), Vocational Training (2003), and Police Cooperation (2006).
Formal defense relations between Australia and Vietnam were established in February 1999, with the opening of a Defense Attaché Office at the Australian Embassy in Hanoi. Vietnam's first Defense Attaché to Australia took up his appointment in Canberra in September 2000.
The bilateral defense relationship includes regular Australian Defense Force ship visits to Vietnamese ports; training of Vietnamese military officers in Australia under the bilateral Defense Cooperation Program; and visits between Australian and Vietnamese Chiefs of Defense Force.
The Australian Federal Police maintains two Law Enforcement Liaison Offices in Hanoi and Ho Chi Minh City.
Australia and Vietnam have also held senior officials-level bilateral dialogues on regional security and other issues since 1998.
The Australian Minister for Trade, Warren Truss and the Vietnamese Minister of Planning and Investment, HE Vo Hong Phuc, co-chaired the 7th Australia-Vietnam Joint Trade and Economic Cooperation Committee on 16-17 July in Canberra. The Ministers issued a Joint Communiqué.
Australian interest in Vietnam as an investment destination is growing, although this has not yet resulted in significant increases in the number or value of new Australian-related projects in Vietnam. According to official statistics, Australia ranks 18th in overall foreign direct investment in Vietnam, with 126 currently valid projects worth a total of US$405 million in disbursed capital since 1988.
In 2006, there were 13 newly approved Australian-invested projects in Vietnam, a number in keeping with previous years. Newly approved Australian investment in 2006 was in diverse areas including ship building, apartment construction, logistics, agribusiness, hospitality, fashion design, marketing and consulting.
More generally, over the past five years, the most significant Australian investments have involved expansions by established Australian companies, which continue to diversify their operations. Prominent examples include BlueScope Steel, ANZ Bank and QBE.
The majority of Australian investors in Vietnam operate in Ho Chi Minh City and the surrounding rapidly developed provinces of Binh Duong, Dong Nai and Ba Ria-Vung Tau. Official figures indicate 74 of the 126 Australian invested projects in Vietnam are in this region.
Australia’s business presence in HCMC is concentrated in the services sector (ANZ, QBE, Commonwealth Bank, Allens Arthur Robinson (formerly Phillips Fox), Toll, Intrepid Travel, RMIT University). Jetstar commenced services between Sydney and HCMC on 30 November 2006.
In 2005-2006, two-way goods trade between Australia and Vietnam totaled $5.08 billion. Two-way services trade added an additional $669 million.
Vietnam's merchandise exports to Australia in 2005-2006 totaled A$4.2 billion, a 34 per cent increase on the previous year. In the 11 months to November 2006, Vietnam’s merchandise exports to Australia grew almost 50 per cent compared to the same period of 2005, to almost A$4.6 billion. Almost all of the increase came from another large surge in the value of oil imports (driven predominantly by increased prices). Significant items of Vietnam’s exports to Australia in 2005 - 2006 were:
Vietnam’s merchandise imports from Australia in 2005-2006 totaled A$915 million, representing a yearly increase of 29 per cent. Significant items of Vietnam’s imports from Australia in 2005 - 2006 were:
Services exports to Vietnam in 2005 were worth A$225 million. Education and training remains Australia's single largest services export, worth A$137 million per annum. Services imports from Vietnam in 2005 were valued at A$390 million, dominated by tourism-related spending (A$276m).
Vietnam's rapid economic growth over recent years has led to large demand for imported goods, creating significant opportunities for Australian exporters of metals, wheat, dairy produce, machinery, petroleum-based products and live animals. The recent tremendous surge in gold exports looks to have been driven by ongoing cuts in import tariffs on the product, and also Vietnamese buyers looking to diversify supply away from traditional European sources.
The continuing shift towards a more market-based economy and strong economic growth in Vietnam have increased demand for education and training services, and education sector reforms are under way with support from the Government of Vietnam and donors including the World Bank and Asian Development Bank.
Demand for training in areas such as English language, business and management and information technology is high, especially in the major urban centres of Hanoi and Ho Chi Minh City. The number of privately-funded Vietnamese students in Australia is increasing as the emerging middle class becomes an important market for education and training services.
Vietnam has large deposits of oil and gas and a wide range of exploitable mineral deposits. Many Australian companies have expressed interest in minerals mining in Vietnam but most are waiting for legislative reform before proceeding and none have operational projects.
Australian companies are generally well received in Vietnam. Australia is regarded as a modern, technologically advanced and friendly country located within Vietnam's immediate sphere of interest. Long-term trade and investment opportunities should increase in line with Vietnam's progress in implementing its legislative and administrative reform program following its entry to the WTO on 11 January 2007. Companies should assess the long-term commercial attractions against current difficulties in entering the market.
If you would like more information on specific export opportunities in Vietnam, or more information on export assistance, go to the Austrade website.
Of all the English-speaking countries in the world, Australia welcomes the largest number of students from Vietnam. There are currently some 7,200 students from Vietnam studying in Australia, and an estimated of 8000 more studying Australian education and training courses in Vietnam.
Australia supports many education and training initiatives with Vietnam, including cooperating with the Vietnamese Government on education and training matters; increasing Australian participation in education, training and research; facilitating institution-to-institution linkages; and supporting Australian alumni associations. Australia is a strong investor in Vietnam’s human resources development and is the leading provider of scholarships to Vietnamese students.
Australia's RMIT University has been operating in Vietnam since 2000 as the first and as yet only 100 per cent foreign-owned University in Vietnam. It operates two campuses based in Hanoi and in Ho Chi Minh City.
The Australian Department of Education, Science and Training (DEST) renewed two Memoranda of Understanding in 2003 – one on education cooperation with the Ministry of Education and Training and one on vocational training issues with the Ministry of Labour and Social Affairs.
The international arm of DEST is Australian Education International (AEI) Vietnam. AEI has two offices in Vietnam and provides advice on education and training issues to Governments and education and training providers, and also provides advice to Australian education providers on effective engagement in the Vietnamese market.
As part of the expanded Australian Scholarships Initiative, DEST administers the Endeavour Programme – a prestigious scholarship programme showcasing the excellence of Australia’s education, science and training sectors. The Endeavour Program supports high achieving students, researchers and professionals in undertaking short or long-term study, research and professional development in Australia in a broad range of disciplines. It also enables Australians to do the same abroad. Awards are granted on the basis of a merit selection process. Vietnam has been a significant beneficiary of the newly expanded program, going from two Endeavour awardees in 2006 to 26 in the 2007 round.
Australia's total overseas development assistance to Vietnam in 2006-07 is estimated at $81.5 million. Amongst 40 donor countries and agencies in Vietnam, Australia consistently ranked among the top ten bilateral donors in 2006-07. Vietnam is Australia's fourth largest development partner after Papua New Guinea, the Solomon Islands and Indonesia.
Australia, through AusAID is one of the largest aid donors to Vietnam since 1991. In recent years, Australia's bilateral aid to Vietnam has amounted to almost A$60 million per year, in addition, Vietnam receives around A$14 million per year through Australian funding for regional programs, NGOs and emergency assistance.
Australia's development assistance to Vietnam aims to reduce poverty and achieve sustainable economic and social development. Australia will increasingly work through Vietnamese government systems, engage sub-national institutions and explore new aid options. Assistance for rural and agricultural development remains a high priority.
The current country program strategy (2003-2007) has two principle objectives: to contribute to broad-based economic growth by strengthening the governance of institutions required for a competitive market economy; and to assist with improving productivity and links to markets for the rural poor in the Mekong Delta and Central Coast regions.
Activities include assistance to Vietnam to strengthen water management and support essential water delivery systems and to support agricultural research institutions, with the aim of increasing the productivity and market competitiveness in the agricultural sector.
Australian assistance also includes support for Vietnam’s economic reform agenda through the Poverty Reduction Support Credit program of the World Bank and assistance for Vietnam to prepare for and meet the obligations of WTO membership following Vietnam’s accession in January 2007.
Tertiary study in Australia is also a major component of the cooperation program. Under the new Australian Leadership Awards targeting the development of future leaders, 26 scholarships have been awarded to high achieving Vietnam scholars and professionals for post graduate study in Australia.
Under the Australian Development Scholarships program, around 700 Vietnamese students are currently studying at tertiary institutions in Australia. About 150 new students commence studying in Australia each year. The scholarships target areas of training or study that meet Vietnam's development needs and complement other areas of Australian assistance.
Vietnam and Australia also introduced a program of technical cooperation on human rights in 2006. The program provides opportunities to foster practical cooperation between agencies such as the Vietnam Women's Union, Ministry of Foreign Affairs and the Ministry of Justice and Australian institutions with human rights responsibilities and expertise.
The Australian aid program in Vietnam implements practical human rights cooperation with Vietnam, including sponsorship of a human rights course in Hanoi with the Ho Chi Minh Political Academy, attended by Party and Government officials.
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