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Luxembourg and Việt Nam: building a more resilient and sustainable world

Update: June, 23/2021 - 08:58

On the occasion of Luxembourg's National Day (June 23), Jean-Paul Senninger, Ambassador of Luxembourg to Việt Nam writes to Việt Nam News:

In Luxembourg, we like to think of ourselves as pioneers. Every country does that in a way, but for a small country like ours, strategic innovation has always been of critical importance. While our history is rooted in agriculture, Luxembourg took advantage of the booming European steel industry in the 19th - 20th centuries. When the steel crisis hit in the 70s, we reinvented ourselves again, with a dynamic financial centre and a service-based economy. By the 80s, financial services had replaced steel as our number one export.

We did not stop there. Presentation a growing demand in communications and connectivity Luxembourg entered the space sector with SES, operating today a global fleet of satellites. SES supported the Vinasat-1 project. In the 90s we invested into ICT and have ever since sought to remain at the forefront of innovation.

Diversification has today become our new mantra with a key focus on science and data management. We began building a high-tech sector, including areas with a huge potential for collaboration between Luxembourg and Việt Nam.

The Constitution Square. — Photo Courtesy of the embassy

Luxembourg and Việt Nam have nurtured excellent and rich bilateral relations over the last three decades. We started with development cooperation programs in the fields of rural development, health, vocational training before moving into banking and finance, with the State Securities Commission at its heart. Việt Nam took inspiration from Luxembourg’s legal framework for its securities and capital markets. This achievement reflects the mutual trust and successful partnership between our countries and emboldens business opportunities driven by innovation and the need to jointly address global challenges.  

A pioneer in green finance 

As an international centre for green finance, Luxembourg is a pioneer in the fight against climate change and has devised a number of tools to address and mitigate its impacts.

As part of our Paris COP21 commitments, Luxembourg supported Việt Nam in tackling climate change in the Central provinces and in the Mekong Delta. Our ambition is to further strengthen Việt Nam’s financial expertise and leverage investments in sustainable projects.

Today, the Luxembourg Green Exchange has the largest market share of listed green bonds worldwide with securities worth EUR 440 billion. Luxembourg is also the leading ESG fund domicile. Coincidently, Asian fintechs and e-commerce platforms have chosen Luxembourg as their gateway to the European market. 

Rising business opportunities

The entry into force of the EU-Việt Nam Free Trade Agreement in 2020 spurred growing interest from our companies in doing business in Việt Nam. Last week, some 50 companies joined a webinar hosted by our Chamber of Commerce to get insights into Việt Nam’s healthtech sector.

Beyond banking and finance, we see huge opportunities in the fields of digital innovation, start-ups, energy, circular economy, healthtech, automotive and logistics.

The conclusion of the EU-ASEAN CATA, the world’s first bloc-to-bloc air transport agreement will further bolster connectivity and economic development between our companies.     

Record trade in services and of foreign direct investment inflows

Trade in goods between Luxembourg and Việt Nam kept growing in the last decade, with Việt Nam being our main partner in ASEAN with a total 130 Million EUR in 2020. Trade in services and in financial services with Việt Nam are in an uptrend with 110 million EUR. As regards FID, Luxembourg outflows to Việt Nam recorded 1.73 billion EUR in 2019.

Luxembourgish companies have been operating in Việt Nam for many years, contributing to its impressive GDP growth. Two of them, B Medical Systems and Cargolux, joined forces to tackle the pandemic in supporting and ensuring vaccine transportation and storage.

Since the beginning of Luxembourg’s support to immunisation programmes in Việt Nam, B Medical has delivered more than 30.000 blood and vaccine cold chain units. I am very pleased that an additional 174 refrigerators just arrived through Gavi and UNICEF funded projects, which will assist with the storage of vaccines, including Covid-19 vaccines, across 23 provinces.

Human interactions are an important cornerstone of our relationship. Today close to 200 Vietnamese citizens live in Luxembourg. Many of them are highly qualified experts supporting the banking and financial sector.

Luxembourg is a staunch supporter of major European programs fostering students and researcher mobility while nurturing innovation. Several partnerships exist between our respective academic and research actors. The University of Luxembourg will integrate the “European Management University” in Việt Nam.

A warm country. — Photo Courtesy of the embassy

On behalf of my Government, let me congratulate Việt Nam for its successful 2020 chairmanship of ASEAN and its constructive work at the UN Security Council for the tenure 2020-2021. As members of ASEAN and the EU, it is essential that both our countries remain strong advocates of a rules based international order, of free trade and of multilateral cooperation that in return will foster inclusive growth and sustainable development. — VNS       

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