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ASEM nations seek closer ties
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17:12
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08/10/2004
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ASEM 5 in Vietnam is a great opportunity for Asia – European countries to seek closer ties in development and invesement cooperation, says Minister of Planning and Investment Vo Hong Phuc.
Could you please tell us about the cooperation between Vietnam and Asian and European countries in foreign direct investment (FDI) and official development assistance (ODA)?
As for investment cooperation, to date, 23 of the 25 ASEM member- countries have invested over USD 27 billion in 2,576 projects in Vietnam, or 53 per cent of the total foreign-invested projects in Vietnam and 61 per cent of the total FDI. Capital disbursed has crossed USD 16.3 billion. Among the ASEM investing countries, Singapore tops with 3/4 projects worth nearly USD 7.9 billion in registered capital fol1owed by Japan with 463 projects worth over USD 4.3 billion. Just eight countries, Singapore, Japan, South Korea, France, the Netherlands, Thailand, Malaysia and the UK, have invested more than USD 25 billion in 2,079 projects.
ASEM investors have been present in almost every sphere of the Vietnamese economy, from building industrial park infrastructure and new urban areas to hospitality and heavy and light industries. Their investment is chiefly in industry, with over USD 15.4 billion in 1,741 projects. Of these, 743 projects, involving USD 7 billion, are in heavy industry. The agriculture - fisheries - forestry sector attracted USD 1.5 billion in 262 projects and the service sector USD 10.1 billion in 574 projects.
In Vietnam, ASEM entrepreneurs have invested in 59 cities and provinces of which Hanoi has got 378 projects with USD 6.8 billion followed by Ho Chi Minh City with 810 projects worth USD 6.3 billion and Dong Nai with 250 projects worth USD 4 billion. These three localities have rather developed infrastructure and hence attract investors not only from ASEM but also from other regions.
In general, the average project size by ASEM investors is much higher than the national average of all projects (USD 16.5 million) and most of them have been performing well. Many projects have achieved high efficiency, churning out both import substitutes and exports. Among ASEM projects, several large-scale and efficient projects have contributed much to socio-economic stability and development of not only their local areas but Vietnam in general. These include Orion-Hanel in Hanoi (TV tube production, USD 178.58 million), DAEHA Co, Ltd (five-star hotel services, USD 177.4 mil1ion) and VSC-POSCO in Hai Phong (steel production, USD 56.12 mi1lion). In electronics and IT, there are the joint ventures between Vietnam Post and Telecommunication Corporation and NTT Group, Fujitsu (computer production), Cannon, Sony, Matsushita, Sumitomo and Sanyo. In the automobile and motorbike industries, there are Toyota, Honda, Isuzu, Suzuki, Mitsubishi and Vietnam-Daewoo.
As for development assistance, ASEM members are big donors to Vietnam. The relationship between the two sides has made huge progress and is reflected by the higher committed assistance. ASEM members from Europe have helped Vietnam with poverty reduction, public finance management, economic reforms, water resources management, agriculture, human development, urban development, gender equality, health care, fisheries, post and telecommunication, transport, energy, remote sensing, justice, natural resources and environment. Two forms of their ODA are non-refundable technical grants and preferential credit. The Asian members' ODA centres around manpower development, energy, transport, agriculture, education and training, health care and environment.
ASEM's ODA for Vietnam has hugely contributed to its socio-economic development - to poverty reduction via rural infrastructure development programmes; to economic restructuring via developing energy, transport, agriculture and industry; to raising people's health via health care and freshwater programmes; and to improving management capability of Vietnamese officials. Another result of the ODA has been directly or indirectly creating favourable conditions in Vietnam to attract FDI.
At ASEM 5, what contents and initiatives will be tabled to promote cooperation among ASEM members in the fields of investment and business facilitation?
To create more favourable conditions for businesses to develop, we need to carry out the following measures:
- Continuing to perfect the system of laws and policies concerning foreign investment so as to create a level legal playing field for both domestic and foreign investors. In this process, it is necessary to ensure the principle of not lowering investment incentives, complying with international commitments during the accelerated integration process, widening the fields calling for foreign investment and diversifying investment forms and reducing investment costs and raising the efficiency of foreign-invested enterprises.
- Assisting in addressing the difficulities and obstacles of licensed foreign-invested projects in general and those of ASEM in particular.
- Rapidly and thoroughly reforming the business system, especially the state-owned enterprises, equitising businesses to lure indirect capital sources. Building preferential policies for trans-national corporations (TNCs) of ASEM. These policies should encourage the TNCs in the fields of industrial manufacturing, energy, chemicals, construction and services. Through this investment channel, Vietnam will receive not only capital but also directly-transferred technology (source technology) and access to the world market via the global TNCs network.
- To attract new investment projects, the government needs to launch investment promotion programmes in order to make investors understand more of the investment environment and encouragement policies of Vietnam through fairs, exhibitions in Vietnam and in other ASEM countries. This measure wil1 also create more opportunities for investment and business cooperation of Vietnamese and other ASEM businesses.
- Strengthening surveys of market and investment partners. Focus should be given to key markets and partners so as to work out proper approaches to each market and partner. Deploying more investment promotion representatives in the key areas and raising coordination with diplomatic agencies for investment promotion. Studying the situation and trends of investment in the world and in the region, bilateral and multilateral mechanisms of investment cooperation and investment attraction experiences of other countries.
Will Vietnam present any initiatives in the field of inv estment at ASEM 5?
After the second meeting of the ASEM Taskforce in Tokyo, Japan, the Vietnamese taskforce, including members of the Ministries of Trade, Finance, Planning and Investment, proposed an initiative to set up an ASEM Investment Promotion Centre. After the meeting in Tokyo, the taskforce proposed a new centre, the ASEM Investment, Trade and Tourism Promotion Centre. The goal of the centre is to promote investment activities and deepen trade links between business communities and cultural and tourist exchanges between the two regions as declared by the chairman of the fifth meeting of ASEM economic ministers at Dalian, China. He said: “To foster the investment flows between ASEM members in the coming years, the conference has approved the recommendation on the future of investment cooperation tabled by senior economic officials, and at the same time asked the coordinators of the Investment Contact Point to join efforts to realise the above goal”.
The establishment of the ASEM Investment, Trade and Tourism Promotion Centre is of great significance to the cooperation between the two regions. Thus far, there has been no equivalent model. There have been just some investment promotion centres set up to promote foreign investment in certain individual countries. Currently, Thailand's Investment Agency and Malaysia's Ministry of Industry and Trade have opened some investment promotion offices in Japan, the US and Europe to attract investment but to their two countries only. There is only one centre at the regional level (Japan-ASEAN Centre) but it works within the framework of the relationship between an international organisation and a nation. This centre was initiated by the Japanese government aiming to attract investment capital from Japanese small- and medium-sized businesses to ASEAN countries. It also aims to assist relocation of Japanese businesses to Southeast Asia and widen tourist flows between Japan and ASEAN countries. ASEAN assessments have found this centre operating very efficiently.
In the future, ASEM Investment, Trade and Tourism Promotion Centre wil1 have a very active role in fostering investment and trade between the two continents. Tourist activities wil1 contribute to raising mutual awareness and cultural interaction between people in ASEM countries. In turn, this will help trade and investment promotion. In the coming years, new ASEAM members in the two regions will open up larger prospects for economic cooperation.
(CPV/Vietnam Investment Riview)
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