It’s day two of Vietnamese President Luong Cuong’s state visit to Egypt — the first by a Vietnamese head of state since we upgraded ties to a strategic partnership in 2018. Cuong and President Abdel Fattah El Sisi aim to boost cooperation on trade, investment, education, and green energy, according to a statement from Vietnam’s Foreign Ministry.

On the agenda: Expect a heavy focus on economic ties now that Vietnam has been hit by a 20% US tariff. Vietnam has made deepening its relationships in Africa and the Middle East a foreign policy priority, according to Deputy Foreign Minister Nguyen Minh Hang. Nguyen told Vietnam News that working together in both countries on green infrastructure and food production is high on the priority list, alongside agriculture, education, and healthcare.

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There’s lots of room to grow trade and investment with Vietnam — the base is low. There’s one Vietnamese investor in Egypt right now, according to a state-owned Vietnamese media outlet, with investments of about USD 30 mn. Our total investment in Vietnam is about a tenth of that. Cuong is heading to Angola after his stop in Egypt, state-owned Voice of Vietnam reports. Two-way trade hit USD 540 mn last year, almost all of it Vietnamese sales to Egypt, Vietnamese state media quoted Ambassador Nguyen Huy Dung as saying.

IN CONTEXT- There’s a lot we can learn from Vietnam when it comes to exports and FDI. The country, while still under communist rule, has shown what’s possible when policymakers commit to a clear industrial policy. Over the past two decades, Vietnam has built a tightly woven network of single-industry economic clusters that have unlocked substantial FDI inflows.

Annual FDI inflows into Vietnam rose from c. USD 15.8 bn in 2016 to USD 38.2 bn by2024. These clusters — located across the country and linked by solid infrastructure — helped Vietnam become a critical node in global supply chains.

SOUND SMART- Nearly 45% of all Samsung smartphones worldwide are made there. Intel runs one of its largest chip testing facilities in Ho Chi Minh City (not that Intel is necessarily long for this world, but … still…). Foxconn, BYD, LG, and Panasonic assemble everything from iPads to TVs and optical sensors in Vietnamese industrial parks. Apple buys from dozens of suppliers there and wants to invest more, CEO Tim Cook has said.

Capturing a piece of global supply chains can change economic destinies, our friend Simon Kitchen, now partner and head of macro strategy at Emerging & Frontier Capital, told us a few years back. His example at the time? Vietnam. “Look at the experience in Vietnam, where they have created single-industry economic zones,” he said. “You see people in low-income jobs suddenly having opportunities to get their heads above water. They save and have disposable income. They invest in education — their own and that of their kids. They buy consumer goods and start to participate in the formal financial system. Then service businesses build up around the zones to serve this emerging middle class. The multiplier is formidable. When you’re a nation of more than 100 mn people, it’s not about the 10k jobs in a given subsector — it’s about the multiplier effect. You want clusters close to centers of population so they can create [chances] for marginally employed people and kick off this virtuous cycle.”

Background: Cuong’s visit comes a little more than three months after a Vietnamese businessdelegation traveled to Cairo for talks with local exporters and officials in the Sisi administration.

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