Opportunity to create breakthrough in Vietnam-Saudi Arabia relations

Saudi Arabia is not only known as the world's leading oil power but also a modern country which has been constantly innovating and accelerating the transformation and diversification of its economic model with a series of ambitious super projects.
Vietnamese products displayed at a supermarket in Saudi Arabia. (Photo: vietnamplus)
Vietnamese products displayed at a supermarket in Saudi Arabia. (Photo: vietnamplus)

With a foundation of good friendship and many similarities for complementarity and mutual support in the process of economic restructuring and implementation of long-term development goals, Vietnam and Saudi Arabia have many opportunities for breakthroughs in development in the near future.

Saudi Arabia has announced the establishment of four new special economic zones in Riyadh, Jazan, King Abdullah, and Ras al-Khair Town. This is part of the Saudi Arabian Government's commitment to strengthen the country's position as a global investment destination. Saudi Arabia has also launched an integrated logistics zone at King Salman International Airport in Riyadh. These new projects are in the first phase of a long-term programme that Saudi Arabia has been implementing to encourage foreign direct investment while promoting entrepreneurship and economic development in the country.

In addition, Saudi Arabia also announced an initiative to attract investment in the supply chain, with an initial goal of mobilising 40 billion riyals (about 10.64 billion USD). The Gulf nation also offers access to oil, gas, electricity, renewable energy, and human resources at competitive costs. Saudi Arabia has been making heavy investment in infrastructure, including airports and seaports, towards the goal of becoming a transport and logistics hub by the end of the decade, as outlined in its plan for economic diversification.

Vietnam and Saudi Arabia are two dynamically developing economies in Southeast Asia and the Middle East, which are in the process of strongly transforming their economic structure towards modernity and sustainability. The friendship and multi-faceted cooperation between the two countries have been continuously strengthened and developed since the establishment of diplomatic ties (October 1999).

Over the past 20 years, Saudi Arabia and Vietnam have developed a close relationship to become important regional partners to each other. Saudi Arabia is one of Vietnam's leading economic partners in the Middle East. Their two-way trade turnover reached 2.7 billion USD in 2022, an increase of 32.4% compared to 2021. This was an impressive figure in the context of the many difficulties in the global economy.

In recent years, more and more Saudi Arabian businesses have shown interest in promoting cooperation with Vietnam in the fields of trade, investment, energy, seaports, Halal food, tourism, and innovation. Many large corporations and investment funds of Saudi Arabia have effectively carried out direct and indirect investment projects in Vietnam in the fields of real estate, energy, and steel, especially the pioneering project of Zamil Steel (steel production). However, the trade relations between Vietnam and Saudi Arabia remains modest and has yet to meet the expectations of both sides. In 2022, the total two-way trade turnover between the two countries was equal to 0.4% of Vietnam's total export and import turnover and 0.61% of Saudi Arabia's total export and import turnover.

Vietnam and Saudi Arabia have been continuing to promote cooperation in many fields such as energy (petrochemicals and green energy), investment, manufacturing industry, culture, Halal industry, and especially tourism development and sports. With Vietnam’s issuance of the Project of “strengthening international cooperation to build and develop the Halal industry in Vietnam until 2030”, the first sets out major national orientations to tap the potential of the Halal market, the two countries have many opportunities to boost cooperation when Saudi Arabia is one of Vietnam's priority partners and markets for Halal.

Vietnam wishes Saudi Arabia to support its development of the Halal industry and access to the market for goods and services according to Halal Islamic standards in Saudia Arabia and Muslim countries through investment in production, training, and sharing of experience.

In addition, Vietnam and Saudi Arabia have much potential to promote agricultural cooperation. Saudi Arabia has a large desert area and an unfavourable climate for agricultural development. This is an opportunity for Vietnamese exporters. To date, many Saudi Arabian businesses have invested in Vietnamese goods, especially agricultural products and food, while the Middle Eastern country is making efforts to diversify its supply sources to ensure food security.

Some Saudi Arabian investors have been also interested in Vietnamese projects in the fields of food processing, agricultural products, and textiles. With its strengths, Vietnam can promote the export of agricultural and aquatic products such as rice, cashew nuts, tea, pepper, coffee, frozen fish, canned fish, food, construction materials, interior decoration products, charcoal, agarwood, and garments and textiles into the Saudi Arabian market.

In 2024, Vietnam and Saudi Arabia will celebrate the 25th anniversary of diplomatic ties, an important milestone in the friendship and cooperation between the two countries. With positive developments in relations, the two sides are making efforts to promote cooperation in all fields, for the common benefit of the two peoples and practical contributions to maintaining peace, stability, cooperation, and development in the two regions and around the world.