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Vietnam – an Asian partner in need
Its membership in the dynamically developing group ASEAN will make Vietnam a partner sought after by many countries in 2012.
ASEAN countries should continue to be among the world’s economic recovery leaders this year. Six ASEAN members - Vietnam, Indonesia, Malaysia, Thailand, Singapore and the Philippines - are forecast to achieve 6 percent growth over the next five years.
American management consulting firm A.T Kearney recently released its 2012 FDI Confidence Index report listing emerging Asian markets as the most attractive destinations for investors this year.
Although its economic growth has slowed down a bit, Vietnam is still considered a favourable investment environment due to its political stability, young labour pool, low labour cost, and growth potential.
According to the Japan External Trade Organization, the number of Japanese projects in Vietnam increased by 82 percent last year.
Motonori Tsuno, Chief Representative of the Japan International Cooperation Agency, says that Japanese investors are mainly focusing on production, manufacturing and service.
“Vietnam is an important partner of Japan in Southeast Asia and the relationship has developed into a strategic partnership,” he says. “The region’s growth has contributed to Japan’s growth and to regional stability.”
Another emerging economy, India, also considers Vietnam to be in a key position in its Eastward policy. In recent years, the Vietnam-India strategic partnership has steadily expanded with two-way trade turnover fetching US$3.5 billion last year. This year, Vietnam and India will celebrate 40 years of bilateral diplomatic ties and 5 years of strategic Partnership. This July, direct flights linking between the two countries will be launched. Indian Foreign Minister Somanahalli Mallaiah Krishna has called this year a turning point in the friendship of the two countries.
Russian Ambassador to Vietnam Andrey G.Kovtun maintains that relations with Vietnam will be the highest priority of Russian diplomatic policy in Asia in 2012 and subsequent years. Russia particularly wants to strengthen its friendship and cooperation with Vietnam in economics, trade, and investment. Russia’s recent WTO entry and the expected signing of Free Trade Agreements with Belarus, Kazakhstan, and Vietnam – the Taxation Alliance should boost trade between Vietnam and Russia.
“Russia and Vietnam have signed many cooperative agreements,” he recalls. Over the past two years, we have initiated projects related to Vietnam’s first nuclear power plant and we will expedite these projects. We will also move toward a free trade area for members of the Taxation Alliance. In 2012, Russia’s assuming the APEC Presidency and cooperation among signatories to the Taxation Alliance will help to simplify trade procedures among these parties.”
The centre of gravity of the global economy is drifting from West to East. Unifying the Asian economy through cooperation mechanisms between ASEAN and China, Japan, and the Republic of Korea and the signing of regional investment agreements are likely to boost regional growth. Establishing solid relations with economic partners will allow Vietnam to take full advantage of these mechanisms for national growth.
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