Several complementarities between Vietnam and Australia’s Northern Territory present significant investment and cooperation potential in multiple sectors including animal breeding, meat processing, tourism and vocational training, experts say.
Speaking at a seminar held in Hanoi Thursday, they said the vast potential for boosting economic ties has not been fully tapped to date.
The seminar was jointly organized by the Vietnam's Association of Foreign Invested Enterprises (VAFIE), The Investor, and the Vietnam-Northern Territory Business Council (NTVBC).
Potential investment areas
Nguyen Ngoc My, vice chairman of the VAFIE and head of the NTVBC, said Northern Territory was the third-biggest state of Australia and the nation’s gateway to the Asia-Pacific and Southeast Asian regions.
Cooperation between the two sides was yet to realize the potential that Northern Territory presents with an area quadruple that of Vietnam and an abundance of natural resources, said.
My said he’d recognized the potential early and had jointly organized business trips between central and local agencies of the both sides since 2013, connecting and guiding Vietnamese delegations to visit and assess investment opportunities in the Northern Territory.
In 2019, VAFIE and the NTVBC signed a strategic agreement to research and formulate a Vietnam-Australia investment strategy with particular focus on the Northern Territory.
A fruitful result of this initiative was the governments’ adoption of the Vietnam-Australia's Northern Territory trade-investment strategy in 2021, which has been consistently updated, My said.
My proposed that both sides focus their investments on prefab and modular construction materials sectors to exploit the complementarity of affordable labor costs in Vietnam and high demand in Australia.
The same applies to the breeding of cows and buffalos, meat processing in Australia for export to Vietnam; tourism; vocational training and the export of Vietnamese labor to Australia, he said.
My further said that this year, the two sides should facilitate investments in vocational training; red meat production in collaboration with Australia's CAG Group; establishment of a Vietnamese center to display products such as construction materials, consumer goods and handmade goods; tourism, including golf tourism; and logistics, including direct flights between Vietnam and the Northern Territory’s Darwin city.
My also noted that Vietnamese firms could participate in Northern Territory's Australia-Asia Power Link, a $30 billion solar power project. Vietnamese enterprises can provide materials and help with construction, he added.
VAFIE chairman Prof. Nguyen Mai noted that Vietnam-Australia ties have been growing strongly since 1973, especially in business, tourism and education. There were about 300,000 citizens of Vietnamese origin in Australia at the moment and Vietnamese ranks fifth among most popular languages in the country.
He noted that at a working session between the VAFIE and the Ministry of Planning and Investment in 2022, Minister Nguyen Chi Dung had affirmed that boosting Vietnam-Northern Territory cooperation was part of the ministry's strategic plan.
In early 2022, the VAFIE published a Vietnam-Northern Territory cooperation strategy in collaboration with VABIS Group, a local business operating in real estate, construction, education, mining and recreational activities.
In June 2022, a VAFIE delegation visited Australia's Northern Territory and held working sessions with local authorities on agriculture, mining, energy, education and tourism cooperation.
In September 2022, Nguyen Ngoc My, vice chairman of the VAFIE, joined a delegation of the government-run Committee for Ethnic Minority Affairs to work in the Northern Territory and signed a cooperation agreement for remote areas inhabited by ethnic minority communities.
However, despite the initial moves, bilateral cooperation remained sluggish and Thursday’s seminar aims to speed up things, Mai said.
Reviewing Vietnam's legal framework on outbound investment, Vu Van Chung, deputy director of the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment, said the two countries aimed to increase bilateral trade to $20 billion, in line with the upgrade of their diplomatic relations to that of a comprehensive strategic partnership.
The Ministry of Planning and Investment has built up strong cooperation with Australian partners to boost investment and economic collaboration, including the selection of 10 outstanding Vietnamese firms and their Australian peers to establish links and lead bilateral investment cooperation, he said.
"Many central and local agencies of Australia, especially in the Northern Territory, are looking forwards to receiving Vietnamese investments," Chung said.
He said the ministry has suggested that the National Assembly, Vietnam's highest legislative body, updates the nation’s legal framework on outbound investment and bring it line with international norms.
"Since Vietnam has essential investment needs, current rules on outbound investments remain rigid. Currently, Vietnam has opened up outbound investments for all sectors, except for six banned and four restricted sectors," he added.
At the moment, the legal framework on outbound investment features the 2020 Investment Law, relevant guiding documents and the central bank's decrees on foreign exchange.
Recently, the central bank has permitted the transfer of no more than $300,000 and 5% of the investment capital, versus the previous rule of no money transfer until the granting of investment certificates, Chung said.
Currently, outbound investments of more than VND20,000 billion ($806 million) need the National Assembly’s approval; between VND20,000 billion and VND800 billion need the Prime Minister's approval; and below VND800 billion need approvals from the Ministry of Planning and Investment. The approval process is supposed to take a maximum of 15 days.
The State Bank of Vietnam, the country's central bank, is responsible for managing and supervising money transfers after investment certificates are granted, Chung said.
In his remarks, Dr. Nguyen Anh Tuan, VAFIE standing vice chairman and editor-in-chief of The Investor, noted Vietnam and Australia had established diplomatic relations in 1973 and steadily elevated them to comprehensive (2009), strategic (2018) and the maximum level of comprehensive strategic partnership earlier this month.
In line with the development of bilateral ties, bilateral trade had doubled in 10 years to $13.8 billion in 2023.
Meanwhile, Australia has invested $2.04 billion in 631 projects in Vietnam; and Vietnamese businesses have made 94 investments in Australia worth $584 million, Tuan said.
Recent working sessions that VAFIE has had with Northern Territory have revealed great potential for investment cooperation, especially in vocational training and sending Vietnamese workers to Australia.
Other potential areas include agriculture, particularly livestock farming and meat processing; logistics, construction materials, consumer goods; and solar energy. Northern Territory authorities have already expressed their support for such investments, Tuan said.
In September 2021, VAFIE and the NTVBC signed a strategic agreement to enhance business cooperation between the two sides, despite some issues triggered by the Covid-19 pandemic pushing back expected progress.
Australian perspectives
Addressing the seminar from Australia, Brian O'Gallagher, a Darwin City Council member and an advisor to the board of directors of International College of Advanced Education (ICAE), affirmed Vietnam was a special market for the Northern Territory.
He said the ICAE focused on jobs with high demand, such as those in the hospitality and wellness industries. Upon completion of training courses, students can register for permanent residence and apply later for Australian citizenship, he added.
Northern Territory has massive demand for labor and hosts over 100,000 foreign learners, but the proportion of Vietnamese people is low, O'Gallagher said.
Johnnie Dichiera, CEO of Central Agri Group (CAG), said his business has made massive investments in the Northern Territory as the province was a gateway to deliver red meat to Southeast Asia.
Despite the strong commitment, CAG has only recently established suitable partnerships with Vietnamese enterprises, thanks to Nguyen Ngoc My and VABIS Group, he said.
CAG and VABIS Group are discussing the addition of more partners, he added.
NTVBC chairman Jason Hanna highlighted advantages for the economic cooperation between the two sides, including the minor time-zone difference of two hours, the Northern Territory's high demand for lucrative hospitality jobs and Australia's development policies for the province providing opportunities for foreign students.
After five decades of diplomatic relations, it is time that the two countries establish direct flights connecting Vietnam and the Northern Territory to facilitate further bilateral cooperation, Dichiera said.
No visa relaxations likely
At a question-answer session, Nguyen Thanh Ha, Vietnamese Consul General to Perth, Australia, said that in 2022-2023, as Australia relaxed its visa requirements, the country welcomed 700,000 foreigners. However, facing a major housing challenge in 2024, the country has tightened its visa rules.
According to its latest policy, Australia does not provide preferential treatment for any particular group or nationality. As a result, it was not suitable to expect Australia to ease any visa requirements for Vietnam in line with the upgraded bilateral partnership. However, there are possibilities that Australia will make changes in the future, Ha said.
She said the success of many Vietnamese people in Australia, making significant tax payments, was a welcome development that would generate positive sentiments in the Australian government towards Vietnamese immigrants. Besides, many Vietnamese students in Australia have been granted visas and citizenships, while many Vietnamese businesspersons have done very well in the Northern Territory, she added.