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German investment and ODA to Vietnam on the rise
The cooperative ties between Germany and Vietnam have grown and flourished in recent years, especially German investment and official development assistance (ODA) to Vietnam.
Nearly 200 German businesses have invested in Vietnam in various crucial fields including infrastructure, transport, renewable energy, manufacturing and banking industry. With 140 projects totaling US$778 million, Germany ranks 22nd among countries investing in Vietnam.
Despite last year’s economic woes, Germany still had 15 direct investment projects in Vietnam, worth about US$112 million, an increase of 2 percent over 2008.
Most of the projects focused on key sectors with high competitiveness like infrastructure, transport, environmental treatment, banking-financial, insurance and technological services, software technology, information and communication technology and the manufacturing industry.
All projects undertaken so far have been highly praised by Vietnamese Prime Minister Nguyen Tan Dung and German Chancellor Angela Merkel. These include projects by such German groups as Metro Cash&Carry, Siemens, Deutsche Bank and Allianz, who have invested in 22 provinces and cities of Vietnam, principally Ho Chi Minh City, Hanoi, Binh Duong and Dong Nai.
The subway No.2 project in Ho Chi Minh City, scheduled to break ground mid-year, is considered a “lighthouse” project which will lure more German investors and businesses to explore the Vietnamese market.
In the last few years, Vietnam and Germany have agreements on double tax avoidance, investment encouragement and protection and marine and aviation cooperation.
Germany is a large ODA donor to Vietnam having provided US$1 billion to the Southeast Asian nation since 1990. It decided not to cut ODA to Vietnam despite the recent financial crisis. Early last December, Germany pledged Euro137 million in assistance for the 2009-2010 fiscal year, accounting for nearly 13 percent of the total European Union ODA to Vietnam.
2010 should be a banner year for bilateral relations between Vietnam and Germany. The organising of a “Vietnam Year in Germany” and a “Germany Year in Vietnam” with various political, socio-economic and cultural events has lifted their relationship to a new level.
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