A few days ago Sace published an interesting document entitled "FOCUS ON Good morning Vietnam: a destination to rethink" by Giovanni Salinaro. The Vietnam confirms to be one of the most dynamic economies in the Asian continent, GDP growth in 2013 was equal to +5,4%. This positive economic result is mainly due to industry, in particular the manufacturing sector. The economic policy interventions implemented by the government in order to reduce the macroeconomic imbalances, partly generated by the reduction in world demand, seem to bear fruit: there is a reduction in inflation and a moderate increase in reserves in hard currency.
Vietnam is today a leading player in the process of regional integration of South East Asia: it is in fact part of ASEAN and AFTA (regional trade integration) and of APEC (economic integration of the countries bordering the Pacific). The operating context is not the best but shows signs of improvement, the new constitution came into force in January 2014 which reaffirmed the fundamental role of the state in economic management. Although the detailed legislation is still being adopted, there remains a gradual attitude of the government towards complete opening up to a market economy. In this light goes the privatization of various state enterprises. The foreign direct investment (FDI) are favored, but corruption and bureaucracy are the main obstacles for investors. There is also a lack of infrastructure to underline, especially for the energy and road sectors.
Among Asian countries, Vietnam is considered one of the most competitive. Between 2000 and 2013, about 230 billion dollars of FDI flowed into the country. The major variables that improve the country's attractiveness are: good level of basic education, young and low-cost workforce, high concentration of industries with consolidated experience, availability of well-organized and low-cost industrial parks. Italian investments in Vietnam at the end of 2013 amounted to 294,2 million dollars. Among the Italian companies: Eni, Piaggio, Datalogic, Ariston, Bonfiglioli, Perfetti Van Melle, Mapei. Vietnam is the fifth reference market for Italy in South East Asia. In 2013, Italian exports to Vietnam amounted to 674 million euros. The average growth rate of our exports is equal to 11% but in the last year there has been a notable acceleration (+34,6% compared to 2012). With these values, Italy ranks tenth in the ranking of countries from which Vietnam imports, third if we consider only all European countries. On the other hand, we are the twenty-first worldwide buyer of goods or services produced in Vietnam. The banking sector presents multiple criticalities, many banks are undercapitalized and record a high rate of Non-Performing Loans (NPL). Other risks are due to the low reliability of banking and corporate counterparties (Sace assigns a value of 89/100 both to the risk of non-payment from banks and to that of non-payment from companies).
Assuming that Italian exports grow in line with the growth rates of Vietnamese imports (an average of 16% between 2014 and 2018), Italian exports could reach a total of 1,4 billion euros in 2018. The major opportunities related to Vietnam concern the Italian companies that deal with oil & gas, infrastructure, instrumental mechanics and fashion (the latter two are worth respectively 29 and 22% of our total exports), in particular potential benefits are recorded for companies manufacturing medical and hospital machinery (government policy to decentralize modern hospital structures). The sales of goods of the Traditional Made in Italy (food and drink, fashion and furniture) reached 186 million euros. The companies that could benefit most from a possible entry into the country are those in the furniture sector: given the rapid urbanization process underway in the country and the current low share of Italian exports, they can represent an opportunity for this important sector of the Italian manufacturing industry.
In order to better intercept this demand for Italian goods, as well as, more generally, to favor commercial relations between Italy and Vietnam, a System mission. This mission - organized by the Ministries of Foreign Affairs and International Cooperation and Economic Development, by Confindustria, ICE-Agency for the promotion abroad and internationalization of Italian companies, ABI, Rete Imprese Italia, Unioncamere and the Conference of the Regions, with the collaboration of the Italian Embassies in Vietnam and Vietnamese in Italy – operational from 23 to 26 November, it counts over 65 Italian companies. During the System mission, SACE has signed a collaboration agreement with Vietinbank, Vietnam's second largest commercial bank. So far, the portfolio of operations insured by SACE in the Asian country amounts to 260 million euros, mainly concentrated in the large industrial sectors of oil & gas and aeronautics-naval, but it is destined to expand and diversify. This agreement lays the foundations for a medium-long term cooperation aimed at facilitating the finalization of transactions and the financing of projects of mutual interest, thanks to a more intense exchange of information and technical know-how. In Vietnam, SACE is already studying new operations for 90 million euros.
