Development of int'l financial center: Key component for Viet Nam to become high-income country by 2045

In an interview with the VGP, Frew said, the recent visit to the UK of Vietnamese Standing Deputy Prime Minister Nguyen Hoa Binh is an important moment both for deepening bilateral strategic partnership as well as for Viet Nam's future development.

During the trip, Nguyen met with senior British leaders including the UK's Deputy Prime Minister Angela Rayner, Financial Secretary to the Treasury, Lord Livermore, Speaker of the House of Commons Lindsay Hoyle, former Prime Minister Tony Blair and former Lord Mayor of the City of London Vincent Keaveny.

The delegation also met and had discussions with the Bank of England, London Stock Exchange group and a range of financial market participants. A key highlight was the DPM's attendance at a roundtable on IFCs establishment organised by TheCityUK with participation from various leading British businesses in the fields of finance, banking and insurance such as Standard Chartered, HSBC, Prudential and legal firms like Michelmores and A&O Shearman.

During these high-level meetings, DPM Binh emphasised Viet Nam's commitment to enhancing its strategic partnership with the UK and supporting increased cooperation in the Asia-Pacific region.

Trade between the two countries reached US$8.4 billion in 2024, marking an 18 percent increase from 2023. Viet Nam and the UK have huge potential to expand cooperation in various sectors, including trade and investment, science, technology, education, healthcare, food processing, tourism, and people-to-people exchanges.

The focus of the visit is to share insights and expertise on the development of an IFC in Ho Chi Minh City and a regional financial centre (RFC) in Da Nang. Viet Nam's economic success story is well-documented, with the country emerging as one of the fastest-growing economies in the world, noted the Ambassador.

The Vietnamese government has set the ambitious goal of becoming a high-income country by 2045 through increasing Viet Nam's role in global value chains and leveraging digitalisation to drive economic growth.

And as home to one of the oldest, most successful IFCs in the world, the UK is uniquely positioned to support Viet Nam on this journey. We look forward to working more closely with the Vietnamese government to share our best practice and expertise, supporting Viet Nam to achieve sustainable growth across the country", emphasized the Ambassador.

Fundamental conditions for developing IFCs in Viet Nam

According to the diplomat, since 2022, TheCityUK, appointed by the UK government, has worked with Vietnamese public and private stakeholders to work on tailored analysis and expertise sharing for Viet Nam on its journey to establish the two financial centres.

During the Deputy Prime Minister's visit, TheCityUK officially launched a High-level recommendations report for Viet Nam's IFCs. Key recommendations from this report include:

Political Support: Consistent and high-level political support is essential for the success of the IFC.

Staged Development: The IFC should be developed in stages, allowing the government to choose a pace that aligns with its long-term strategy.

Onshore Presence: The IFC should have a significant onshore presence to benefit the entire economy.

Complementary Reforms: The IFC should complement ongoing national financial sector reforms.

Hybrid Model: Initially, a hybrid model is recommended, which can be developed incrementally towards a full model if required.

Focus Areas: Initial focus areas include Green Finance, FinTech, and Capital and Commodities Markets development.

Regulatory Regime: Establish a regulatory regime based on international best practice, governed by Vietnamese laws.

Infrastructure and Talent: Develop high-quality infrastructure and create an environment attractive to skilled professionals.

Opportunities and challenges for Viet Nam in building IFCs

Frew said, the IFC development comes with several potential challenges, such as the need for significant legislative and institutional reforms and the importance of building capacity and expertise.

"The UK is committed to supporting Viet Nam in this ambitious endeavour, offering expertise and capacity building to ensure the successful development of the IFCs", asserted the diplomat.

If successful, the IFC has the potential to harness Viet Nam's professional and business services sector, integration into global value chains and the acceleration of digitalisation, to accelerate economic growth.

It is also expected to create wider employment opportunities throughout the economy as foreign direct investment increases, enhance financial inclusion, support the development of the green economy and position Viet Nam as a leading financial hub in the region.

Viet Nam's journey towards establishing IFCs marks a significant milestone in its economic development. With strategic planning, strong political support, and international collaboration, Viet Nam is well on its way to achieving its vision to 2045 and becoming a high-income country.

 The IFC initiative not only promises economic growth but also underscores Viet Nam's commitment to sustainable development and global integration, told the Ambassador.

Since 2022, the UK Government has been actively supporting Viet Nam in designing and reviewing policies and regulations for IFCs, as well as providing capacity-building programs for Vietnamese government officials.

The project has provided hands-on, practitioner-led expertise and advised the Vietnamese authorities on the most suitable IFC model for Viet Nam, offering recommendations on the specialisations the IFC should focus on.

Now in its third phase, the project has supported the Government in preparing for and now executing the Politburo's decision on development of an IFC in Ho Chi Minh City and a RFC in Da Nang.

Currently, the team is assisting the Government in the development of constitutional statutes. Under this project, the Moller Institute at Churchill College, Cambridge University has developed and delivered two specialised and advanced leadership courses in foreign direct investment (FDI), aimed at helping the Vietnamese Government address investor concerns and build a compelling commercial value proposition in key sectors of the economy.

In the new era of growth, there are bright prospects for the UK to work with Viet Nam's public and private sector in financial and professional services, energy transition, education, healthcare, infrastructure and digital transformation.

Each sector has its own role in contributing to attracting investment, enhancing financial inclusion, developing climate-resilient infrastructure and promoting an appealing lifestyle for Ho Chi Minh city and Da Nang, stated the diplomat./.