MPI visit champions Vietnam’s close ties with South Korea

The visit has resulted in South Korea’s further commitment to support Vietnam

Could you say about the main goal of the visit?

This year Vietnam and South Korea celebrate the 20th anniversary of the establishment of bilateral diplomatic relations. The MPI’s delegation visited South Korea at the invitation of South Korean Minister of Foreign Affairs and Trade Kim Sung-Hwan to further enhance the economic ties between Vietnam and its strategic partner South Korea.

Vietnam and South Korea share many cultural and natural similarities. In the last 50 years, the latter has substantially grown from an outdated agriculture-based economy into a developed industrialised nation with export earnings increased to $550 billion last year from $50 million five decades ago. South Korea is also among the world’s pioneers in green development. Its success story and valuable experiences in economic development are worthy for Vietnam to learn from.

Could you highlight the major developments from increased economic ties between Vietnam-South Korea?

The bilateral economic ties have grown significantly across the board in the past years. In terms of bilateral trade, the two governments have agreed to set a target of $20 billion worth of bilateral trade to be reached by 2015. As of last year, two-way trade between South Korea and Vietnam already exceeded $18 billion, thus I believe the target can be obtained earlier than expected.

In terms of investment, South Korea now ranks second after Japan among 95 countries and territories having directly invested in Vietnam with $24.25 billion in registered investment capital. During our talks in Seoul within the framework of the visit, the South Korean side noted they were conducting measures to encourage South Korean businesses to invest more in Vietnam.

In terms of development cooperation, with $1 billion committed for 2008-2011 and an expected $1.2 billion during 2012-2015, Vietnam is the biggest recipient of South Korean preferential loans through Korean Eximbank. Especially, roughly 95 per cent of the loans committed for 2008-2011 have been negotiated and implemented through bilateral agreements and South Korean official development assistance (ODA) loans have been directed in Vietnam’s prioritised sectors with the ODA-funded projects having been undertaken rapidly and efficiently.

During the visit, your delegation met with various authorities and large economic groups in South Korea. Could you underline the outcomes of such meetings?

We could say the visit has achieved all the goals set by the delegation, especially in three major areas. Firstly, in terms of enhancing the cooperation between the two countries, our discussions resulted in the commitments to support Vietnam by such South Korean key ministries and agencies as the ministries of Foreign Affairs and Trade, Strategy and Finance, Knowledge Economy, Korea Trade-Investment Promotion Agency (KOTRA), Korea International Cooperation Agency (KOICA) and Korean Export and Import Bank (Eximbank). These ministries and agencies have confirmed to continue supporting Vietnam in terms of sharing experiences in economic, trade and investment promotion and providing funds for Vietnam.

Secondly, during the visit, we signed memoranda of understanding (MoUs) with key South Korean organisations including the MOSF, KOICA, Korea Development Institute (KDI) and Global Green Growth Institute (GGGI), through which Vietnam would be able to learn both successful and unsuccessful lessons from South Korea’s economic development process.

Thirdly, amid the declining foreign direct investment into Vietnam, the delegation working visits to such large South Korean groups as Samsung, Taekwang, Kumho, CJ, Lotte and Posco had resulted in encouraging the direct investments into Vietnam from big Korean investors. These are useful visits as Vietnam would like to see continued investments from big investors around the world and South Korea to improve the domestic technological and business landscape.

What are measures adopted by Vietnam and South Korea to develop bilateral economic, trade and investment ties?

The two countries are undertaking a series of measures to tighten bilateral economic relations, including pushing the on-going free trade agreement (FTA) negotiations to promote trade and investment. During our talks, South Korean authorities said they were supporting their businesses by providing loans and organising market exploration trips to increase trade with and direct investment in Vietnam.

In the official development assistance (ODA) area, South Korea’s Eximbank has set up a division specialising in monitoring South Korean ODA-funded projects to help promptly address the difficulties which may arise during their implementation. The MPI will also assign a division to work closely with our South Korean counterparts.

Right before our trip to South Korea, I met with South Korean ambassador to Vietnam Ha Chan-ho and we agreed to hold annual  talks between the MPI leadership and the ambassador to timely identify and address obstacles facing South Korean projects to help them operate smoothly and efficiently in Vietnam.