A REVIEW OF VIETNAM – ITALY RELATIONS
I. Political relations
Vietnam and Italy officially established diplomatic relations on March 23rd, 1973.
The political relations between the two countries have witnessed remarkable progresses since early 1990s. After an official visit to Vietnam by Italian Foreign Minister G. De Michelis in December 1989, the two countries continued the exchanges of high-ranking delegations.
- Prime Minister Vo Van Kiet officially visited Italy in May 1997;
- General Secretary of the Communist Party of Vietnam - Le Kha Phieu visited Italy in May 2000;
- Deputy Prime Minister Vu Khoan visited Italy and attended the 2002 Vietnam Conference;
- Deputy Prime Minister Gianfranco Fini attended ASEM-5 in Hanoi in September 2004;
- President of the Lower House of Parliament Pier Ferdinando Casini visited Vietnam in January 2005;
- National Assembly Chairman Nguyen Van An visited Italy in March 2005; and
- Prime Minister Nguyen Tan Dung officially visited Italy in January 2007.
Italy has given active support to Vietnam's cooperation with the European Union, at international forums as well as to the normalisation of the country's relations with international financial, commercial and monetary organisations.
II. Economic relations
Italy was one of the first European countries to resume and develop economic cooperation with Vietnam. Some Italian syndicates started operating and got remarkable results in Vietnam such as Technip Italy with a project to build the Phu My Fertiliser Plant; Danieli Officina with a steel factory; Fiat Iveco with a project to set up the Mekong Automobile Joint Venture; and Piaggio scooters.
1. Bilateral trade
The two-way trade volume over recent years has constantly increased from USD 320 million in 1996 to USD 1.13 billion (euros 870 million) in 2006. Vietnam imports from Italy leather, chemicals, transportation and construction equipment, sanitary wares, medical equipment and household commodities. It exports to Italy footwear (40 per cent), aquatic products (15 per cent), textile and garment (13 per cent), coffee (12 per cent), plastic products (4 per cent), furniture (3 per cent), fine arts and handicraft products.
2. Official development assistance
This year, Italy pledged to give 42.15 million euros in ODA to Viet Nam, including 4.05 million euros in non-refundable aid, and 38.1 million euro in preferential loans. 77 per cent of Italy's ODA is usually allocated to social field, while human resource development receives 5 per cent, production development and marketing - 12 per cent, and poverty reduction - 6 per cent.
3. Direct investment
Italy now ranks ninth among EU countries and 31st among all countries investing in Viet Nam with 22 projects capitalised at 55.9 million USD. Italy-invested projects mainly focus on leather footwear, construction, sanitary wares, water heater and steel producing industry… Examples of effectively invested firms include Perfetti and Merloni Termo Sanitari.
4. Humanitarian aid
The Italian government provided food amounted to 538,000 USD to victims in the Center of Vietnam who endured floods in September 1999.
The government also provided 250,000 USD to flood victims in September 2000; 50,000 USD to flood victims in the Mekong Delta in September 2001 and 100,000 Euro to combat with bird flu epidemic in February 2004.
5. Cultural and educational cooperation
The Italian government has annually provided scholarships in Italian language training courses and master courses for perspective Vietnamese students. Some Italian language courses are already made available in Hanoi and Ho Chi Minh City. Italian cultural weeks/months have already been held in Vietnam. The Italian government is cooperating with UNESCO to help Vietnam restore My Son sanctuary with an amount of 812,000 USD.
6. Vietnam-Italy intergovernmental Committee
Intergovernmental Committee for Economic and Technological Cooperation between the two countries was established in December 1989. This Committee proved to be effective at early stage. Due to some domestic issues, Italy began to tighten their aid programme and eventually stopped giving aid to Vietnam since 1992.
In order to boost the cooperative relations between the two sides, a Joint Committee meeting was held by the two governments on 7 – 8th of December 2000 in Hanoi. On the occasion of Deputy PM Vu Khoan’s visit to Italy, both sides had a Joint Committee mid-term review meeting on cooperation and development.
7. Agreements, Memorandum of Understandings signed by the two countries
- Framework Agreement on Economic, Industrial and Technological Cooperation (1989)
- Agreement on Investment Promotion and Protection (1992)
- Agreement on Cultural Cooperation (1990)
- Memorandum of Understanding on the first meeting of Vietnam-Italy Intergovernmental Committee (1990)
- Bilateral Development Cooperation Protocol (1992)
- Agreement on double taxation avoidance (1993)
- Agreement on the implementation of a 60 million USD ODA sum granted by Italian Government (1997)
- Agreement on child adoption (2003)
- Vietnam – Italy cultural and educational cooperation programme for the 2004 – 2007 period (2004)
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