Prime Minister Nguyen Xuan Phuc (Photo: VNA) Hanoi (VNA) - In marking 25 years ofdiplomatic ties between Vietnam and the Republic of Korea (RoK) this year, the English-language daily VietnamNews of the Vietnam News Agency and the Maeil Business, the No. 1 business newspaper in the RoK, speak toPrime Minister Nguyen Xuan Phuc about bilateral ties, opportunities to tap newtrade, investment cooperation and trends in trade liberalisation.
Q: Vietnamand the RoK celebrate 25 years of diplomatic ties this year. What achievementshave been made in this time, and where can the relationship be made deeper? Doyou have any personal relations with RoK?
A: The Vietnam-RoKrelationship is growing rapidly in all fields. The outcomes of bilateral cooperationare very meaningful and beneficial for the two countries’ people.
Sincebecoming strategic partners in 2009, Vietnam and the RoK have maintainedfrequent high-level exchanges and effectively implemented cooperation anddialog mechanisms in foreign affairs, security and defence. In particular, thetwo countries have fostered very strong political trust. Together, thesefactors will be the cornerstone for bilateral relations to blossom in thefuture as they were in the past.
Our tradeand investment figures are very impressive, reflective of the dynamic economicrelationship between the two countries. The RoK has become the biggest investorin Vietnam, with close to 6,000 projects nationwide, amounting to more than 54billion USD of capital. Korean companies in Vietnam contributed almost onethird of national exports in 2016. Trade turnover between our two countriesgrew 86-fold to 43 billion USD in 2016 from just 500 million USD in 1992,making the RoK Vietnam’s third largest trade partner.
If youwalk around in Hanoi or HCM City, you will see many Vietnamese using Koreanproducts as well as lots of Korean stores and restaurants. I have also heardthat it’s very easy to find "Pho" or "Nem" places in Seoul.
Besides the impressive achievements that I mentioned, people-to-people tiesbetween Vietnam and the RoK have also prospered. Vietnamese people, especiallyyoungsters, are quite familiar with Korean culture including Korean music,movies, martial arts and cuisine. Vietnam in turn is an attractive destinationfor Korean tourists.
According to our data, Vietnam welcomed 1.5 million Koreanvisitors in 2016. On average, there are more than 100 direct flights between thetwo nations every week. There are 140,000 expatriates from each country livingin the other.
The similarities and admiration for each other’s culture, together withenhanced political trust and prospering economic and trade relations betweenthe two countries, are strong links that bring our people closer.
Buildingon past achievements and enormous untapped potential, I am certain that withthe determination of the two Governments and their people, the StrategicPartnership between Vietnam and the RoK as well as the friendship between theirpeople will continue to reach new heights, with more impressive outcomesrecorded in the interest of our people as well as peace, stability, cooperationand development in the region.
Q: Nowthat the original TPP no longer exists, what policies will be adopted by theGovernment to drive development and attract investors, especially foreigninvestors? How good are the chances of the Regional Comprehensive EconomicPartnership (RCEP) being finalised? As a member of ASEAN, what are the keyissues you think need to be addressed for the treaty to come into being?
A: Wewill continue to carry out extensive and comprehensive internationalintegration together with several agendas.
Theseagendas include economic reform, growth transformation toward moresustainability, completing the framework for the market economy, promotingstartups and innovation, and creating a fair and transparent businessenvironment for all investors.
The negotiationof the RCEP will lead to important economic linkages in Asia-Pacific. Once inforce, this agreement will create stronger economic and trade links among itsmembers and promote Asia-Pacific economic integration.
Over thepast five years, Vietnam has worked closely with other ASEAN members andpartner countries to accelerate RCEP negotiations. These negotiations aim toreach a balanced agreement that takes into account the interests and level ofdevelopment of each member. I believe that all member countries will try hardto reach an early conclusion of the agreement, which will help maintainmomentum for regional economic integration.
Q: Vietnamhas been the investment destination for many Korean conglomerates, such asSamsung, LG and Lotte. But numerous smaller companies are also eyeing overseasinvestment opportunities. In which areas does the Vietnamese governmentencourage small and medium sized enterprises (SMEs) to invest?
What has been done so far by the Government to ensure a level playing field forboth foreign and local SMEs? What is the best model for Vietnamese and Koreansto work together?
A: If one were to name a successful overseasinvestment destination for Korean businesses, Vietnam would be the best answer. The confidence of foreign investors in Vietnam is well-founded. Thecountry enjoys social and political stability, and it has a dynamic andfast-growing economy with a high degree of openness, operating under marketrules. The business climate, including investment policies, has improved withgreater predictability and transparency, with diverse sectors for investment.
Inaddition, the Government is striving to build an enabling Government, aGovernment of integrity that can best serve the people and businesses. Ineconomics, the Government is committed to using vigorous measures to improvethe investment and business environment and enhance competitiveness to providean enabling environment and equal opportunities for businesses, both Vietnameseand foreign. We have always considered foreign businesses and investors as keycomponents of the Vietnamese economy. Their success is seen as the success ofVietnam.
As wellas an investment destination for large enterprises, Vietnam has also been thechoice of thousands of SMEs from the Republic of Korea. Vietnam has investmentopportunities in areas of strengths for the Korean SMEs, such as construction,transportation, urban development and human resources development, supportingindustries, rural development, tourism and entertainment, among others.
Businessescan freely choose their type of investment. It can be 100 percentforeign-owned, joint venture, or public-private partnership. The equitisationprocess of State-owned enterprises in Vietnam also offers many merger andacquisition opportunities for investors from the RoK. In whatever format, orwhichever sector, I think win-win cooperation is the model and the goal for cooperationbetween ROK and Vietnamese businesses.
Q: Therehave been three waves of Korean investment in Vietnam since the 1990s, when thecountry opened its doors to the world. With the Vietnam- ROK bilateral tradeagreement signed at the end of 2015, many believe that the fourth wave ofinvestment from Korea will follow shortly. What do you think of this prediction?
A: Ithink this is a well-grounded statement. With the strong development of ourstrategic partnership and the Vietnam- RoK Free Trade Agreement, it is highlylikely that more investors from the ROK will come to Vietnam. Vietnam is aneconomy with a relatively high growth rate of nearly 6 percent. It is also amarket of nearly 100 million people with increasing incomes (GDP/capita at 2,300USD, or 6,200 USD in Purchasing Power Parity terms). I also hope that in thenear future, the RoK market will receive new waves of trade from Vietnam. Vietnamalso has many commodities and industries with comparative advantages and highcompetitiveness.
These newwaves will create momentum to further tighten the Vietnam-RoK relationship andgenerate mutual benefits at the bilateral, regional and international levels.
Q: Agriculture has long been the backbone of Vietnam’s economy, but it hasn’tbeen able to draw much investment due to its high-risk, low-profit nature.Recently a number of businesses, including those from the RoK,have expressed interest in this sector. Do you have special incentive policiesfor foreign investment in agriculture?
A:Vietnam has vast potential and many advantages in agriculture compared to othercountries in the region. Agriculture remains a pillar in the Vietnameseeconomy, contributing significantly to ensuring social security and welfare.The world has learned about Vietnam as one of the world’s leading exporters ofagricultural products such as rice, coffee, pepper, aquatic products, andfruits, among others.
Nevertheless, Vietnam’s agriculture also faces difficulties and challenges inthe process of integration, due to fragmented production and limitedcompetitiveness. There are also a relatively small number of qualityenterprises with good services participating in the global value chain,particularly in processing, branding and distribution.
Vietnam isstriving to overcome these shortcomings to build a modern, sustainable andclimate-resilient agriculture industry. We’re focusing on developing high-techagriculture and organic agriculture. We’re emphasising value-added elements,optimising marine resources, encouraging investment in the use of advancedbio-technology, abiding by international food safety standards, upgradingmodern agricultural infrastructure, building capacity for climate changeadaptation, working to reduce disaster risks, developing brand names andstrengthening the agricultural production–processing–supply chain.
To facilitate agriculture investment, theVietnamese Government has instructed ministries and agencies to review, amendand supplement some policies and mechanisms. These include land, credit andagricultural insurance policies. In some prioritised areas, Vietnam will grantmore concessions and incentives in terms of tax, land use fees, land and watersurface rental charges, among others.-VNA
The similarities and admiration for each other’s culture, together withenhanced political trust and prospering economic and trade relations betweenthe two countries, are strong links that bring our people closer.
Buildingon past achievements and enormous untapped potential, I am certain that withthe determination of the two Governments and their people, the StrategicPartnership between Vietnam and the RoK as well as the friendship between theirpeople will continue to reach new heights, with more impressive outcomesrecorded in the interest of our people as well as peace, stability, cooperationand development in the region.
Q: Nowthat the original TPP no longer exists, what policies will be adopted by theGovernment to drive development and attract investors, especially foreigninvestors? How good are the chances of the Regional Comprehensive EconomicPartnership (RCEP) being finalised? As a member of ASEAN, what are the keyissues you think need to be addressed for the treaty to come into being?
A: Wewill continue to carry out extensive and comprehensive internationalintegration together with several agendas.
Theseagendas include economic reform, growth transformation toward moresustainability, completing the framework for the market economy, promotingstartups and innovation, and creating a fair and transparent businessenvironment for all investors.
The negotiationof the RCEP will lead to important economic linkages in Asia-Pacific. Once inforce, this agreement will create stronger economic and trade links among itsmembers and promote Asia-Pacific economic integration.
Over thepast five years, Vietnam has worked closely with other ASEAN members andpartner countries to accelerate RCEP negotiations. These negotiations aim toreach a balanced agreement that takes into account the interests and level ofdevelopment of each member. I believe that all member countries will try hardto reach an early conclusion of the agreement, which will help maintainmomentum for regional economic integration.
Q: Vietnamhas been the investment destination for many Korean conglomerates, such asSamsung, LG and Lotte. But numerous smaller companies are also eyeing overseasinvestment opportunities. In which areas does the Vietnamese governmentencourage small and medium sized enterprises (SMEs) to invest?
What has been done so far by the Government to ensure a level playing field forboth foreign and local SMEs? What is the best model for Vietnamese and Koreansto work together?
A: If one were to name a successful overseasinvestment destination for Korean businesses, Vietnam would be the best answer. The confidence of foreign investors in Vietnam is well-founded. Thecountry enjoys social and political stability, and it has a dynamic andfast-growing economy with a high degree of openness, operating under marketrules. The business climate, including investment policies, has improved withgreater predictability and transparency, with diverse sectors for investment.
Inaddition, the Government is striving to build an enabling Government, aGovernment of integrity that can best serve the people and businesses. Ineconomics, the Government is committed to using vigorous measures to improvethe investment and business environment and enhance competitiveness to providean enabling environment and equal opportunities for businesses, both Vietnameseand foreign. We have always considered foreign businesses and investors as keycomponents of the Vietnamese economy. Their success is seen as the success ofVietnam.
As wellas an investment destination for large enterprises, Vietnam has also been thechoice of thousands of SMEs from the Republic of Korea. Vietnam has investmentopportunities in areas of strengths for the Korean SMEs, such as construction,transportation, urban development and human resources development, supportingindustries, rural development, tourism and entertainment, among others.
Businessescan freely choose their type of investment. It can be 100 percentforeign-owned, joint venture, or public-private partnership. The equitisationprocess of State-owned enterprises in Vietnam also offers many merger andacquisition opportunities for investors from the RoK. In whatever format, orwhichever sector, I think win-win cooperation is the model and the goal for cooperationbetween ROK and Vietnamese businesses.
Q: Therehave been three waves of Korean investment in Vietnam since the 1990s, when thecountry opened its doors to the world. With the Vietnam- ROK bilateral tradeagreement signed at the end of 2015, many believe that the fourth wave ofinvestment from Korea will follow shortly. What do you think of this prediction?
A: Ithink this is a well-grounded statement. With the strong development of ourstrategic partnership and the Vietnam- RoK Free Trade Agreement, it is highlylikely that more investors from the ROK will come to Vietnam. Vietnam is aneconomy with a relatively high growth rate of nearly 6 percent. It is also amarket of nearly 100 million people with increasing incomes (GDP/capita at 2,300USD, or 6,200 USD in Purchasing Power Parity terms). I also hope that in thenear future, the RoK market will receive new waves of trade from Vietnam. Vietnamalso has many commodities and industries with comparative advantages and highcompetitiveness.
These newwaves will create momentum to further tighten the Vietnam-RoK relationship andgenerate mutual benefits at the bilateral, regional and international levels.
Q: Agriculture has long been the backbone of Vietnam’s economy, but it hasn’tbeen able to draw much investment due to its high-risk, low-profit nature.Recently a number of businesses, including those from the RoK,have expressed interest in this sector. Do you have special incentive policiesfor foreign investment in agriculture?
A:Vietnam has vast potential and many advantages in agriculture compared to othercountries in the region. Agriculture remains a pillar in the Vietnameseeconomy, contributing significantly to ensuring social security and welfare.The world has learned about Vietnam as one of the world’s leading exporters ofagricultural products such as rice, coffee, pepper, aquatic products, andfruits, among others.
Nevertheless, Vietnam’s agriculture also faces difficulties and challenges inthe process of integration, due to fragmented production and limitedcompetitiveness. There are also a relatively small number of qualityenterprises with good services participating in the global value chain,particularly in processing, branding and distribution.
Vietnam isstriving to overcome these shortcomings to build a modern, sustainable andclimate-resilient agriculture industry. We’re focusing on developing high-techagriculture and organic agriculture. We’re emphasising value-added elements,optimising marine resources, encouraging investment in the use of advancedbio-technology, abiding by international food safety standards, upgradingmodern agricultural infrastructure, building capacity for climate changeadaptation, working to reduce disaster risks, developing brand names andstrengthening the agricultural production–processing–supply chain.
To facilitate agriculture investment, theVietnamese Government has instructed ministries and agencies to review, amendand supplement some policies and mechanisms. These include land, credit andagricultural insurance policies. In some prioritised areas, Vietnam will grantmore concessions and incentives in terms of tax, land use fees, land and watersurface rental charges, among others.-VNA
VNA
