UK Minister of State Gareth Thomas (R) speaks with reporters during his Vietnam visit last week

Vietnam’s economic resilience and its government’s enthusiastic emphasis on reform are likely to woo more British investors and boost bilateral trade this year, a top UK trade official said.

“What British businesses have been saying to me is actually they are not going to pull out. They want to stay here for the long term,” Thomas told Thanh Nien Daily during his visit to Vietnam last week.

The Asian Development Bank forecasts Vietnam’s 2009 economic growth at 5 percent while the World Bank estimated the figure at 6.5 percent. Vietnam posted an economic growth rate of 6.23 percent last year against the original target of 7 percent.

“They [British investors] recognize that it may be more difficult this year but they still believe there is going to be economic growth in Vietnam and there is still going to be an opportunity here to grow their businesses,” Thomas said.

Thomas was the second UK senior official over the last three months to stress that UK businesses in Vietnam had long-term plans here. In another interview with Thanh Nien Daily last November, Ambassador Mark Kent also said UK firms would focus on Vietnam’s long-term potential.

UK investors in Vietnam and outside the country are equally enthusiastic about business here, according to Thomas.

“British businesses not yet based in Vietnam are still going to be trying to set up British arms in Vietnam in the course of the next 12 months,” Thomas said.

He cited the example of betting firm Ladbrokes, which has been looking to offer services in Vietnam since the country began considering the legalization of football betting in 2006.

Thomas also said he was impressed by the confidence British businesses had about expanding their operations here. As an example, he cited the opening of HSBC Bank (Vietnam) earlier this month, which is the first wholly foreign-owned subsidiary in the country.

“I am struck as well by the enthusiasm of the ministers and other representatives from the British government,” Thomas said. He recalled many high-level bilateral visits last year, including the UK visit of Vietnamese Prime Minister Nguyen Tan Dung in March.

Government support

One reason UK companies were confident in Vietnam was “the enthusiasm of the Vietnamese government [to improve the business environment] for foreign direct investment (FDI),” according to Thomas.

Thomas said that in a meeting with PM Dung last week, the Vietnamese leader had expressed his commitment to creating a business environment conducive to foreign investment.

Thomas said PM Dung had made clear his desire to discuss the European Chamber of Commerce report on business environment improvement with Vietnamese officials and ministers.

“I hope from that we’ll take a series of measures to improve the business environment in Vietnam,” said Thomas.

He said the country could see more FDI as a result.

Vietnam attracted record quantities of FDI last year, both in pledges and disbursement, the Ministry of Planning and Investment said. Investors promised more than US$64 billion to Vietnam in 2008, according to the Foreign Investment Department.

Thomas said he was confident bilateral trade would increase this year given the enthusiasm from both the Vietnamese government and British companies.

Thomas also revealed plans to go back to Brussels and argue for Europe to implement free trade agreements with individual economies in the ASEAN region like Vietnam or Singapore before signing similar deals with the whole region.

The UK is now the third largest European investor in Vietnam. UK exports to Vietnam were up 50 percent year on year by the end of September last year while Vietnam’s exports to the UK were up 17 percent over the same period.

Reported by An Dien