Orange mission: scoring in Vietnam
Not having been there for a number of years, I travelled to Vietnam for a visit last week as member of a trade delegation headed by Prime Minister Mark Rutte. After celebrating forty years of close ties between the Netherlands and Vietnam last year, now was a good time to visit Hanoi with a very substantial delegation of Dutch companies and entrepreneurs. In addition to the Prime Minister, Secretary of State Sharon Dijksma and VNO-NCW chairman Bernard Wientjes joined the trade mission.
What struck me was the wide array of Dutch companies already long-active and successful in Vietnam. A number of smaller Dutch companies are doing very well in the energy and water management and supply, and the infrastructure, advisory and agricultural sectors. Good illustrations of this are seed refinement and the production of compressed high-grade fertilizer granules – examples of leading Dutch sectors which are well received abroad. During the round table discussion with the Vietnamese Vice Prime Minister, Hoang Trung Hai, other senior cabinet members and senior delegates of Vietnamese business, Dutch agricultural contribution was much lauded and support was pledged.
Jeroen Plag (ING) visits Hanoi as member of a very substantial “Orange” trade delegation. He is struck by the wide array of Dutch companies already long-active and successful in Vietnam. Photo: Dutch Prime Minister Rutte (right) presents the Vietnamese Vice Prime Minister Hoang Trung Hai (left) an orange shirt with the signatures of the Dutch football team, provided by Jeroen.
Rushing through Hai Phong
One thing that had not changed since my last visit was the large number of motor cycles shooting past on the streets. The motto remains: look ahead and drive forward – no looking back! Because we were in important company the trip, under police escort, to the harbour of Hai Phong ‘only’ took two hours. Usually this 130-kilometer trip can easily take twice as long – which is easily explained by the number of bumps and heavily-loaded trucks along the way.
Vietnam has an annual budget of US$40 billion to spend on infrastructure and these large assignments are mainly won by Japanese and Korean companies. A large number of roads and a new airport are being built – very necessary to a country where GDP is growing by 5-6% annually. Although the country is transforming itself from a purely agricultural society to an economy with high-quality production-industry, that process is being hampered by bureaucracy. Vietnam is centrally-led, according to the Chinese model, and the central role of government is apparent in all discussions and negotiations. The feedback from various trade mission participants on their experiences with long-drawn-out negotiations is easily explained by the necessity for consensus at central, provincial and local level – that can take a while in a country with 9 million people!
Adamant about China
Another factor at play is the geo-political situation in the region, particularly the current developments around China. That country announced this week that it plans to build a school on an island in the South-Chinese Sea which is being claimed by as many as five other countries. We noticed little of recent anti- Chinese sentiment on the streets, but in discussions with our Vietnamese partners a very determined attitude towards China was noticeable. The recent book by Robert D. Kaplan, Asia’s Cauldron, describes this regional tension in great detail and explains Vietnam’s important role in it, which is partly due to its position and long coastline.
Like in other Asian countries, most business discussions in Vietnam start off on a personal and lighter note – on subjects such as children and football. Although Vietnam is not taking part in the World Cup, the recent Orange 5-1 victory over Spain did not go unnoticed and names like Van Persie and Gullit and Van Basten are recognised everywhere. The fact that Prime Minister Rutte presented the Vietnamese Vice Prime Minister a signed orange football shirt, was very much appreciated. Maybe we can export a Dutch football coach sometime soon – in addition to aforementioned expertise?
Follow Jeroen on Twitter: @JeroenPlag
Initially published by Dutch daily 'Het Financieele Dagblad', with permission re-published by ING.