Background

Vietnam’s economic growth shrank in 2021 to 2.58% but is expected to bounce back and grow in 2022. The World Health Organisation has praised Vietnam’s vaccination rates as one of the top six globally with 74.1% of the population vaccinated with two doses. As things return to normal in Vietnam, what are the trends to watch in the year ahead? The UK-ASEAN Business Council is delighted to host Gareth Ward, British Ambassador to Vietnam for a discussion on what to expect with UKABC partners.

Vietnam’s National Assembly approved a stimulus package worth around £11.6 billion, half of which will go to infrastructure spending for 2022-2023 as well as to virus-hit businesses and workers. The World Bank forecasts that GDP growth will rise to 5.5%, assuming the pandemic is under control globally. Although full recovery to pre-pandemic levels will only be seen in 2023, the services sector is gaining strength as consumer and investor confidence returns while the manufacturing sector will see continued demand from the US, EU and China. The Debt-to-GDP ratio is expected to remain at 58.8 per cent, well below the statutory limit of 65%.

Vietnam has ratified the Regional Comprehensive Economic Partnership (RCEP) which came into effect on the 1^st of January. While Vietnam’s is also a member of the CPTPP, RCEP will help with IP Laws, data regulations and harmonised rules of origin which will help supply chains and be a boost to exports.

At COP26, Vietnam pledged to be net-zero by 2050 and cut methane emissions by 30% by 2030. To achieve these goals, Vietnam will need to balance its energy needs for its young (median age 32.5 years) and growing population (98 million) with clear sustainable growth strategies. Vietnam’s long coastline is helping Vietnam develop its wind energy and is leading the green transition in ASEAN. The target is to have 11,800 megawatts of wind power by 2025 – four times more than Thailand. Natural gas will also help, however, large gas fields are within China’s nine-dash line. Last December, Vietnam and Russia agreed to work on a 10-megawatt nuclear research reactor which if successful, could pave the way for nuclear energy on a greater scale.

Baroness Neville-Rolfe, Chair of the UKABC will lead the discussion with Ambassador Ward to explore the opportunities for UK companies while understanding the future of Vietnam’s economic and geopolitical landscape.

Areas of discussion

• Vietnam’s economic outlook for 2022.
• Post COP26, what are the strategies to achieve sustainable growth?
• China, Myanmar and ASEAN. What is the view from Vietnam?
• What are the opportunities for UK business in the near and medium-term?

This is a small roundtable for UKABC partners. This will be an off the record discussion under the Chatham House rule.

Biography

Gareth Ward joined the Foreign and Commonwealth Office in 1996. He has served in British Embassies in Russia and China. He took up his appointment as Her Majesty’s Ambassador in Hanoi in August 2018.

Ambassador Ward is focused on promoting free trade and ensuring increased British exports to Vietnam; co-operating with Vietnam through the UN and other multilateral organisations to ensure global peace and security, and on supporting British tourists and business people as they increasingly choose to visit Vietnam.

Further reading

How Can Investors Seize Vietnam’s Wind Power Potential. Vietnam Briefing

Vietnam turns back to giant gas field after net-zero pledge. Australian Strategic Policy Institute.

Vietnam poised to resume nuclear project a decade after Fukushima. Nikkei Asia

Vietnam: Key highlights of new draft of national power development plan. Baker McKenzie

What to expect from the Regional Comprehensive Economic Partnership Agreement in the Vietnamese market: Rules of Origin, IP laws and Data regulations. Lexology