The Hon. Alexander Downer, MP
The Hon. Alexander Downer, MP


Australian Minister for Foreign Affairs, Alexander Downer

22 May 2000

Australia and Vietnam: Strong Ties and Bright Prospects

Speech by the Hon Alexander Downer, MP, Minister for Foreign Affairs,to the Australian Business Group of Vietnam, Ho Chi Minh City, 22 May 2000


It is a very great pleasure to be here in Ho Chi Minh City today and to have the opportunity to address the Australian Business Group of Vietnam once again.

Let me start by congratulating the the Australian Business Group of Vietnam for organising this morning's seminar on ``Vietnam in an Asian Business Environment'', which reflects the ongoing commitment of Australian business in Vietnam.

This is my fourth visit to Vietnam as Minister for Foreign Affairs, and I think the frequency of my visits to this country gives you some indication of the importance our Government places on Australia's relationship with Vietnam.

Vietnam matters to Australia in a very positive sense: because of its membership of ASEAN and APEC; because of its strategic location in South East Asia; because of the 140 000-strong Vietnamese-Australian community; and because of Vietnam's significance as a trade and investment partner.

Australia was Vietnam's 12th largest investor and 4th largest trading partner in 1999, with the two-way trade in goods reaching A$1.66 billion.

In addition, Vietnam will be play in increasingly important role in the region from July, when it assumes the Chair of ASEAN and the ASEAN Regional Forum from Thailand.

I am delighted to return to Vietnam at a time when the scope of bilateral relationship has never been stronger.

I thought therefore that today's address would be an excellent opportunity to make a few remarks about the strength of Australia's relationship with Vietnam and what the Australian Government is doing to support an important element of that relationship, Australian business in Vietnam.

Australia's multifaceted relationship with Vietnam

Australia and Vietnam became acquainted decades ago in a very different global political climate from that of today.

In the twenty-seven years since the establishment of diplomatic relations in 1973, a relationship has been forged which has grown in a number of directions previously unimaginable.

In the first place, there is growing cooperation in defence and law enforcement.

Last night, I had the pleasure of hosting a reception aboard the frigate HMAS Anzac, which is currently visiting Ho Chi Minh City.

This is the second visit to Vietnam by the Royal Australian Navy since defence relations were established last year with the appointment of an Australian Defence attache to our Embassy in Hanoi.

Vietnamese army officers have now commenced training in Australia, in a long-term confidence-building effort, and the defence relationship will be further strengthened next week, when the Chief of the Australian Defence Force Admiral Barrie makes an historic visit to Vietnam.

In the field of law enforcement, Australia is enjoying increasing cooperation with Vietnam in important areas such as narcotics trafficking and people smuggling.

We also have strong educational links.

In the current academic year, around 5 000 Vietnamese are studying in Australia - four times more than in any other country - and of this number, 90 per cent are full fee-paying students.

And Australia has a unique presence in Vietnam, with the recent approval by the Vietnamese Government for Australia's RMIT University to operate Vietnam's first fully foreign owned university in Ho Chi Minh City.

I shall visit the site this afternoon.

This is a major achievement by a leading Australian tertiary institution, providing long-term benefits to Vietnam and also enhancing Australia's reputation as a premier provider of education services.

We enjoy growing people-to-people links (though that, perhaps, is hardly surprising, when you consider that Australia has the largest population of Vietnamese origin per capita outside Vietnam).

Exchanges in medicine, science, agriculture, sport and many other fields take place almost every week, and tourism from Australia to Vietnam is increasing.

With an eye to our shared history, many Australian Vietnam Veterans are returning to visit.

Last month, Australian veterans attended an ANZAC Day dawn service at the Long Tan battle site, and some are also raising funds for an orphanage near the former Australian military base at Nui Dat.

And at the forefront of these people-to-people links are Australians doing business in Vietnam - Australians like many of you - so I want to say a little more about business ties later in my remarks.

The My Thuan Bridge

Of course, the newest symbol and - quite literally - the most concrete example of the strength of the Australia-Vietnam relationship is the My Thuan Bridge.

As a number of you witnessed yesterday, I had the honour of co-opening the bridge.

As Australia's largest ever single overseas development assistance project, to which Australia contributed its expertise and two-thirds of the A$91 million cost, the opening marks a milestone in our bilateral relationship.

It would be a mistake, however, to view the My Thuan Bridge simply as a symbol of a relationship.

For the My Thuan Bridge will make a major, long-term contribution to the economic development of Vietnam's southern provinces by linking the Mekong Delta region, the ``rice bowl of Vietnam'', to Ho Chi Minh City and to the rest of the country.

It will eliminate lengthy delays of up to three hours in crossing the Mekong River by ferry.

In practical terms, this means that farmers and other small businesses can now market their produce more quickly and effectively, and that the people of the Mekong Delta region will have better access to medical and educational facilities.

The My Thuan Bridge also has benefits for Australia.

It was constructed well under budget, eight months ahead of the planned schedule with an exemplary safety record.

It therefore establishes Australia's credentials as a key source of expertise in technical and infrastructure fields for Vietnam and for the region as a whole.

Australian business in Ho Chi Minh City and the Mekong Delta region are positioned to benefit too from the increased economic activity which the opening of the Bridge is expected to bring.

In a very real sense, therefore, the My Thuan Bridge can be seen as an investment by the Australian Government in the future of both Vietnam and Australian business in Vietnam.

How we are helping Australian business in Vietnam

But the My Thuan Bridge is by no means an isolated example of the Australian Government's contribution to improving the environment for Australian business in Vietnam.

I want to mention four areas where we have made an important contribution to that goal.

The first has been in building a strong domestic economy. For Australian business to prosper, - be it in Australia, Vietnam or anywhere else in the world - it must be backed by a strong economy at home.

And our Government is building that strong economy.

The Australian Government's second contribution is through the work of a highly professional diplomatic service.

Australia established an Embassy in Hanoi in 1973, two years before unification.

The opening of the Australian Consulate-General here in Ho Chi Minh City in November 1994 further strengthened that representation, particularly on behalf of Australian business.

Australia's two diplomatic missions in Vietnam are active in providing a valuable conduit between Australian business and the Vietnam Government, both at a national and local level.
They have been instrumental in helping achieve significant wins for Australian business in Vietnam - including the investment licence recently awarded to the RMIT University to operate its campus in Ho Chi Minh City, and also the insurance licences awarded last year to QBE Insurance and Colonial Mutual.

The Australian Government's third contribution is through engagement with Vietnam to encourage its reform process.

It is now 14 years since Vietnam embarked on doi moi or economic renovation, and the recent wins here by RMIT, QBE and Colonial Mutual are testimony to Vietnam's progress towards economic liberalisation.

It is pleasing that the members of the Australian Business Group of Vietnam have themselves played an active role in contributing to the bilateral trade and investment relationship.

Their regular liaison with local and central government authorities on issues of importance to foreign investors has helped to promote a better operating environment for Australian business. The commitment and tenacity of Australian business in Vietnam augurs well for the future of our commercial relationship.

But Vietnam still has much to do before its domestic and foreign-owned private sectors can fully flourish, and before it can achieve its ultimate goal of membership of the World Trade Organisation.

Australia is, therefore, closely engaged with Vietnam bilaterally on the issue of liberalisation - as I have been doing on this current visit - and also in the multilateral context.

Both our countries are represented on the taskforce that is exploring the possibility of an AFTA-CER FTA, a free trade area encompassing Australia, New Zealand and the ten members of ASEAN.

This process is allowing an exchange of views between Australia and Vietnam on broader regional economic and trade liberalisation, but also necessarily on issues that relate to each country's specific circumstances.

My colleague the Minister for Trade, Mark Vaile, is also looking forward to discussing issues of liberalisation with the Vietnamese delegation in June, when he hosts the APEC Trade Ministers' Meeting in Darwin.

Developing Human Resources and Effective Governance

The fourth and final contribution I would like to highlight today is development assistance for human resources and effective governance in Vietnam.

In April 1998, I pledged on behalf of the Australian Government A$236 million in development assistance to Vietnam over four years, making Vietnam Australia's third largest partner in development cooperation.

A substantial proportion of Australia's development assistance budget for Vietnam has been invested in bricks-and-mortar.

It has been invested in the type of physical infrastructure exemplified by the My Thuan Bridge, but also in smaller projects like the North Vam Nao Flood Control Project, which will provide a system of dykes and canals to prevent flooding and improve irrigation on North Vam Nao Island in the south-western province of An Giang.

But just as significant is Australia's long-term investment in what you might call Vietnam's intellectual infrastructure.

Australia is helping to provide Vietnam with the skills on which it can build a strong market economy based on the rule of law and sound regulatory regimes.

It is just such an environment that both domestic and foreign-owned private sectors need if they are to flourish.

Australia currently provides around 500 Australian Development Scholarships for Vietnamese students at tertiary institutions in Australia.

In keeping with Vietnam's development needs, this program is producing graduates in fields including economics and management.

Many of these graduates are government officials, people who will make a significant contribution to the quality of public sector management in Vietnam.

Future leaders in the private sector are also among those awarded scholarships, thus supporting Vietnam's move towards a market economy.

An associated priority in Australia's development assistance to Vietnam is in the field of governance.

Effective governance means many things.

It means having a fair and efficient public service, having a strong rule of law, and having policies that encourage investment.

Effective governance basically provides the essential conditions for economic growth.

Australia is committed to providing assistance for effective governance, including through providing short-term training courses specially designed to upgrade the professional and technical skills of senior and mid-level government officials.

In this respect, I am pleased to announce the WTO Trade in Services Program, an Australian initiative to which the Government, under the APEC Support Program, is providing over A$94,000.

This six-month program is a capacity building exercise which will provide the necessary training and expertise for Vietnam to participate effectively in WTO accession negotiations and to make binding commitments on services trade liberalisation.

It is designed to address a fundamental gap that Vietnam's Ministry of Trade has identified in expertise and experience in the services trade.

The program will include seminars, training courses and advice from expert consultants on the process of services liberalisation, and will provide of necessary materials for services negotiations.

Given the importance of financial services and telecommunications to economic develoment, and to Australian investors in Vietnam, the program has focused heavily on those areas.

Australia's investments in human resource development and effective governance are a long term investment.

They are designed to underpin Vietnam's transition to a market economy based on the rule of law and sound regulatory regimes.

By doing so, the Australian Government is not only contributing to the economic prosperity of Vietnam and its people, but also fundamentally improving the environment for Australian business in Vietnam.


Ladies and gentlemen, the opening yesterday of the My Thuan Bridge was symbolic of the strength of Australia's commitment to Vietnam.

We have, over the years, developed a relationship that is as broad as it is strong, and one based firmly on the principle of mutual benefit.

For our part, the Australian Government is determined to build on these sound foundations.

I know it has not been easy for foreign investors to flourish in Vietnam, and I commend you for your efforts and long term committment to this market.

As Foreign Minister, I am very proud of the contribution Australian business people have made to the economic policy debate in Vietnam, through the ABGV and the Private Sector Forum.

I look forward to working with Australian business in fully realising the great potential of the Australia-Vietnam relationship.

We have achieved much in a few short decades, but I am sure that - given the good will, energy and enthusiasm of people in both countries, particularly those like you who are here on the ground - we can expect much more in the years to come.

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