Berlin (EAST SEA) Sunday, July 23rd, 2023 / 06:43 AM

A THREE-FOLD ECONOMIC POLICY STRATEGY OF VIETNAM TOWARDS AUSTRIA

Patrick Horvath

Dr Patrick Horvath

The Remarkable State Visit

From July 23rd to July 25th 2023, Vietnamese president Vo Van Thuong will pay a state visit to the Republic of Austria. Mister Vo, born in 1970. was elected president by the Vietnamese national assembly on March 2 nd, 2023, making him the youngest man ever to hold this position in Vietnam. Before this assignment, Vo has already distinguished himself as a dynamic leader and economic reformer in Vietnam’s biggest town Ho Chi Minh City. It is truly noteworthy and honorable that the Vietnamese president chose Austria as the first European destination of his term. This state visit has an impressive prior history. The previous state visit of Austrian Foreign Minister Alexander Schallenberg to Vietnam in April 2022 was widely acknowledged by Austrian society and sparked intense media coverage. In a history article on “Voice of Vietnam” from 2021, I recommended to take advantage of the 50-years-anniversary of diplomatic relation between Austria and Vietnam upcoming in 2022. Looking back from 2023 it is safe to say that this opportunity was taken to the fullest and the still ongoing activities certainly intensified Austrian-Vietnamese relations. The anniversary concert in Vienna’s prestigious concet hall “Konzerthaus”, the “Vietnam Cultural Days” in Palffy Palace in the heart of Vienna, and a donation of Covid vaccination to the Vietnamese people by the Austrian government in recognotion of the anniversary, are impressive examples of Vietnam’s new importance in Austria. It seems like a new dynamic in Austrian-Vietnamese relationship has appeared. Now it is time to think ahead, develop a clear vision and take advantage the momentum. On the occasion of the Vietnamese president’s state visit the question of an adequate economic policy strategy for Vietnam towards Austria arises. The final decision about such a strategy can only be taken by a legitimate representative of government and people of the Socialist Republic of Vietnam. Nevertheless, some non-binding suggestions of a foreigner like myself who is positive about Asia and familiar with the Austrian political and economic system might be taken into consideration. In my view, a three-fold approach would turn out to be most beneficial for both Austria and Vietnam because the mutual interests of the two countries meet exactly here:

 1. Promoting Industry Investments

2. Providing Work Force and

3. Establishing a “Green Partnership”.

Promoting Industry Investments

There are many examples of fascinating stories of successful Austrian companies that are active or invest in Vietnam. Delfort, a packaging company originating from Upper Austrian town of Traun, runs a production facility near Ho Chi Minh City with exemplary social benefits for workers like free bus or health insurance, thereby exporting the Austrian social model to Vietnam and increasing its workers’ motivation. Austrian industry is always looking for investment and business opportunities, and at the same time foreign direct investment contributes much to Vietnamese budget and economy. The potential of Austrian industry investments in Vietnam does maybe not yet reach its full potential. According to private consulting agency “Source of Asia”, the Netherlands, an EU country with about 18 mio. citizens, pursues 421 investment projects in Vietnam with a total business volume of 13,89 billion US Dollar. Austria is about half-sized in population compared to the Netherlands, so you could expect more than 200 projects with a business volume of 7 billion US Dollar. The real assets are much lower: The Foreign Relations Report 2023 of Austrian Economic Chamber WKO just speaks of 50-60 projects and an Austrian investment volume of estimated half a billion euro. Why should a proud industrial nation like Austria with many world market leaders and hidden champions not be able to do more? There is much to win for both side, so a public relations plan to promote Austrian indutry investments in Vietnam might be a suitable option. This plan might include the following actions:

• Identification of potential Austrian investors in Vietnam / Creation of a company database as a first step to one day adress them directly in the future.

• Creation of a publicly visible Competence Center for Legal and Economic Consulting of Potential Austrian Investors in Vietnam, possibly at the Vietnamese embassy in Vienna.

• Creation of a Virtual Information Site on the internet in German language with Austrian investors as target group about possible investment chances in Vietnam for Austrian companies – like Austria does with its international site https://investinaustria.at/en/

• Forging alliances / networks with potential political supporters of Vietnam in Austria. Common investment conferences with Austrian Economic Chamber and Austrian National Bank show that there is already much contact and exchange going on. Additionally, the powerful Austrian Industry Association’s (“Industriellenvereinigung”) agenda obviously makes this organisation a natural ally of Vietnam in Austria and should be actively approached.

• Establishing city partnerships in industry regions as a door opener to local companies. Industry can appear everywhere in Austria, even at the least expected places. Doppelmayr for example, world market leader in the construction of cable cars, who has also built interesting cable car project in Vietnam, originates from the province of Vorarlberg in the extreme West of Austria, a rural and mountainous region. However, three regions in Austria typically contain an extremely high concentration of industry: (a.) the province of Upper Austria (which also hosts the biggest Vietnamese community except from the capital Vienna), (b.) the so called “industry quarter” (Industrieviertel) South of Vienna in province of Lower Austria and (c.) the area around the crossing of rivers Mur and Mürz in province of Styria. The centers of these three areas are the towns of Linz, Wiener Neustadt and Leoben. City partnerships with these cities could maybe spark off industry cooperation in the long run. Taking into consideration the Austrian reality, Vietnamese acitivities concerning political lobbying must focus on the capital city Vienna (with the United Nations and all national political institutions present), while industrial relations must focus on the Austrian province, where most of the industry can be found.

• Creation of an annual award for best practice examples of economic exchange between Austria and Vietnam in order to increase the awareness of all the fascinating stories behind companies and products. Recenty Austrian company Veganz11 created a vegan cheese from Vietnamese cashews instead of cow milk. Another example: Vietnamese company Vinfast tries to innovate the field of e-mobility with the support of Austrian partners like Magna Steyr.12 Such Austrian-Vietnamese success stories can serve as a source of inspiration and must be told to the public.

• Learning from the Chinese model of “business associations”. Austrian-Chinese relations are managed via different association, the most important one being the ÖGCF (AustrianChinese Friendship Society) with a focus on political and cultural topics. The field of economy was found not to be adequately represented in this society, so an additional platform with a specific business focus was created – ACBA (Austrian-Chinese Business Association). The Chinese embassy supports the association behind the scenes through information and informal contacts, but the executive board is deliberately not made up of embassy staff or Asian nationals, but of Austrian nationals instead who are positive about China, like businessmen or academic experts. These persons also serve as credible testimonals to the Austian public. ACBA has become a focus point for Austrian-Chinese business acitivities and organises networkin events, but also mutual economic delegation visits and investments conferences. This association is financed by private member companies and has served as a very successful tools for promoting Austrian-Chinese economic relations. Maybe the Vietnamese side would like to adopt something similar in future? A platform with business focus that supports and sides with the already existing Austrian-Vietnamese Society with its political and cultural topics could most likely provide a new impetus in business relations.

Providing Work Force

Austria ist desperately seeking qualified workforce. One overarching reason for this situation is Austira’s ageing society. In each sector of employment different additional reasons apply. The Austrian education system does not seem to motivate enough young people to pursue an education in natural science and technology – this puts Austrian industry under great pressure. Hard farm labour is not very popular in a wealthy, industrial society and since Ukrainian men are conscripted into the army due to the ongoing war, it is hard to find harvesters for Austrian aspargus. Working conditions are dire in the field of nursing / caring and especially during the Covid crisis many found them unbearable and left. Covid measures like lockdown also made many employees leave their jobs in restaurants / hotels and after the opening recruting turns out to be difficult. The president of Austrian Industry Association, Georg Knill, fears that in the long run 500.000 jobs will be vacant in Austria, which is a very high number for a small country with about 9 million citizens. This unfortunate and strange situation of an economy in boom without enough people working should be avoided to ensure Austria’s prosperity in the long run. There are attempts to counter the situation and two very innovative projects come to attention: In province of Upper Austria farmer Ewald Mayr is actively recruiting farm workers in Vietnam and in province of Lower Austria the regional government together with IMC College offers a new education for Vietnamese in the field caring / nursing, thereby paying all expenses including study fees, rents for housing and transportation costs. Such initiatives can be developed into win-win-situations for both Austria and Vietnam. In my opinion, Austria should care more about the education of Vietnamese students and Vietnam with its growing population can offer many young, talented people. If they receive education in Austria and return to Vietam with their knowledge and help to build up Vietnam, this is the best form of development aid Austria can give. If the employees stay in Austria, they can send money home to their families in Vietnam and at the same time help to decrease the lack of workforce in Austria. There is a very small, but active Vietnamese student community in Austria and their needs and problems should be adressed. Research in Austria’s academic exchange service OeAD’s search engine “Grants” shows that there are some excellent initiatives like Ernst Mach Scholarship, but  obviously there is not enough funding adequate for an exchange with a 100-million-country like Vietnam. Austria as a weatlhy contry has a responsibility for development aid and should contribute more funding for education and international student exchange. One priority of Vietnamese diplomacy could be lobbying for this issue at Austrian educational centers, public insitutions and private companies.

Establishing a “Green Partnership”

In another “Voice of Vietnam” article from 2021 I already suggested the creation of a “green partnership” between Austria and Vietnam. The background is that Vietnam is one of the world’s most dynamic countries when it comes to economic growth. This growth should be kept up in order to generate wealth for the people. The dilemma is that such a high economic growth is a severe challenge for the environment and Vietnam’s rich ecological treasures must be preserved for future generations. The solution to this dilemma is innovation and and Austria happens to be world market leader in urban green technology. Austria could help and support Vietnam with technology it urgently needs and Austrian enterprises rightfully identifiy a great business opportunity here. One appealing idea would be the creation of a bilateral Austrian-Vietnamese Green and Urban Technology Exchange Platform with members like the Austrian Institute of Technology (AIT), which has a leading expertise in city development. The Austrian Foreign Investment Center in Ho Chi Minh City can certainly help with contacts to Austrian enterprises that are active in the field of environmental technology./.

 Dr. Patrick Horvath is secretary general of Vienna-based think tank “Foundation for Scientific Economic Policy” WIWIPOL and a volonteer in Austrian cultural exchange and integration organisation “Asia in Vienna”.

  • www.sn.at
  • www.bmeia.gv.at
  • delfortgroup.com
  • www.iv.at

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