The world’s commentators have been speculating for months about the Trump-Kim Summit, from improving relationships and lifting sanctions, to dismantling nuclear facilities and ending missile testing. But what does the Summit mean for its host, Hanoi? RMIT University economist and International Business Discipline Lead Dr Nguyen Quang Trung discusses the unique opportunities for Vietnam.
Why Vietnam was chosen to host
The United States and North Korea have had confrontation within their relationship for decades; there have been times when both sides seem to have stood before the brink of nuclear war.
Like Singapore – the host of the first Trump-Kim Summit – putting Vietnam indirectly into the media spotlight gave the country a chance to polish its image, and showcase its people, foreign policies and investment opportunities on a world scale. And also like Singapore, Vietnam has warm relationships with both countries, but for differing reasons.
Vietnam and the United States developed a strong collaborative relationship after the decades-long embargo from the end of the Vietnam War was lifted. It is a relationship that has reflected prosperity and peace.
Vietnam and North Korea, meanwhile, share a socialist ideology and history of similar economic and foreign policies. Vietnam moved away from this in 1986 however, when it opened up its markets and developed multilateral foreign policy.
Vietnam has also built successful diplomatic relations with most countries in the world including the five permanent members of the United Nations Security Council (and was also a non-permanent member and Asia representative of this organisation). To date, Vietnam has signed many Free Trade Agreements (FTA) bilaterally and multilaterally, with 12 FTA currently in effect and more than 10 FTA being negotiated or prepared to sign. As a result, goods and services from Vietnam have easier access to the global market, reflected by the country’s high trade openness which is just behind Singapore.
Opportunities for Vietnam
Bringing the second Trump-Kim Summit to Vietnam creates a host of possibilities for the country moving forward. Dr Trung identifies five potential opportunities.
- Being an important catalyst in contributing to regional and global peace
If the relationship between the United States and North Korea is strained, there’s a chance it will create instability on both small and large scales. This could result in persistent economic, political and military corollaries such as embargoes, nuclear weapons testing and escalating tensions between nations.
Therefore, Vietnam can contribute to the conversations of achieving peace and prosperity, which will earn the country a better reputation on the world stage.
2. Reaching billions of people in the world through international communication
When Singapore hosted the first Trump-Kim Summit in June 2018, Singapore welcomed 2500 journalists from around the world, which garnered an estimated SG$767 million in exposure (based on media monitoring calculations and Advertising Value Equivalent figures). The AVE estimate was placed at SG$270 million one month ahead of the event.
When compared to the tourism budget in Vietnam, this Singaporean figure is several hundred times larger. With a limited tourism budget, this will be an opportunity that Vietnam cannot easily obtain.
3. Promoting the potentials of Vietnam in the new global context
Geopolitics is said to have a great impact on the process of economic development and power of a country. In international business, the potential for geography to affect investment and business decisions within a country is huge. In the new context of globalisation, when two-thirds of global trade goods are intermediate goods, global value chains (GVC) are contributing to reshaping international and global trade. In many studies, countries with strategic geography have been proven to be very successful in international business.
Despite possessing a strategic position in Asia and numerous other geopolitical potentials for business, Vietnam has not yet embraced its advantages. Therefore, the Trump-Kim Summit may be able to provide international investors and multinational companies with a better understanding of Vietnam in order to make future investment decisions.
4. A chance to develop the national tourism industry
Besides long-standing architecture, Vietnam has many UNESCO-recognised heritage sites, including the ancient town of Hoi An, Ha Long Bay and Trang An.
Vietnam has also constantly expanded its aviation infrastructure, grown international-standard hotels and resorts, and experienced ongoing development in MICE (Meetings, Incentives, Conferences/Conventions and Exhibitions) tourism.
Yet, the number of international tourists to Vietnam is still very low compared to other countries in the region such as Thailand, Singapore and Malaysia.
The large number of journalists and broadcasters attending the Summit in Hanoi presents a great opportunity for tourism promotion.
5. Gaining credibility for hosting large international events
If the Summit is well organised, it will add to Vietnam’s international reputation.
Vietnam has experience holding many high-level international events including the World Economic Forum on ASEAN 2018 (WEF ASEAN 2018) in September 2018, the Asia-Pacific Parliamentary Forum (APPF) in January 2018, APEC Summit in 2017 and the Inter-Parliamentary Union General Assembly in 2015.
As Vietnam builds its capacity to organise major events, the country can attract future international events.
Overall, this event will be an opportunity for Vietnam to promote the country as one of peace and prosperity, and the region for foreign investment. The Summit can help Vietnam grow its role in the international markets in both business and politics, and improve and promote the country’s information and communication infrastructure, public security, transport infrastructure, and urban centres.
Story: Thuy Le