Last year was designated “Korea-Viet Nam Friendship Year” as the two countries celebrated the 20th anniversary of the establishment of diplomatic relations.
Viet Nam and Korea are ideal partners in many ways. Situated on peninsulas, the two countries share a lot of things in common, such as historical and cultural values. These traditional values and new challenges have closely bound our two nations together.
H.E. Tran Trong Toan, Ambassador of Viet Nam to Korea shares his valuable insight into bilateral relations between the two countries, particularly from an economic perspective.
Q: It has been 20 years since Korea-Viet Nam diplomatic relations were established. From an economic perspective, how do you view overall bilateral relations between Vietnam and South Korea so far?
A: Over past years, the Republic of Korea has become one of the leading economic partners of Viet Nam. So far, as of 20 October 2012, among 98 countries investing in Viet Nam, Korea is the 2nd largest foreign investor with US$24.5 billion of registered capital, and first in terms of number of projects with 3,134 units in Viet Nam.
Meanwhile, Viet Nam is the 3rd largest foreign market of Korean investment following China and the US. Korea is the 2nd largest ODA donor of Viet Nam and Viet Nam is the largest receiver of Korean ODA with US$1.226 billion for the period 1995-2010, and US$411.8 million in 2011. Korea has committed to grant US$1.2 billion during the 2012-2015 period.
Korea is the 4th largest trading partner of Viet Nam (Korea is Viet Nam’s 4th largest export market and 2nd largest import source) while Vietnam is Korea’s 9th largest export market and 21st largest import source. Bilateral trade grew substantially from just US$500 million in 1992 to US$10 billion in 2008, and upto US$18.7 billion in 2011. In 2012, bilateral trade turnover increased to around US$21 billion, 3 years before the target set by the two governments.
Korea is now also the 2nd largest source of tourists visiting Viet Nam, with the number reaching 567,000 in 2012. Korea is Viet Nam’s 3rd largest destination for Vietnamese workers under the Employment Permit System (EPS), thus contributing to Korea’s economic growth. Such close economic ties have helped further strenthen the overall relationship between Viet Nam and Korea as strategic cooperation partners.
Nevertheless, there is still vast potential to further enhance and expand Vietnam-Korea economic relations so as to efficiently serve the interests of both countries and for better cooperation and prosperity in Asia and the world at large.
Q: Are there any pending issues to solve for better economic and cultural cooperation between the two countries?
A: Economic and cultural relations between Viet Nam and Korea have been developing very dynamically and effectively over the past 20 years. There are no economic or cultural disputes nor contentious issues between the two countries.
In order to further accelerate and expand bilateral trade, Viet Nam and Korea initiated negotiations on a bilateral Free Trade Agreement (FTA) on 6 August 2012 during a visit to Viet Nam by Korea’s Minister for Trade Bark Tae-ho. The first round of FTA negotiations were conducted in September 2012 during a visit to Korea by Viet Nam’s Minister of Industry and Trade Vu Huy Hoang. The two side are committed to expediting negotiations so as to complete a Vietnam-Korea FTA and contribute to expanding economic relations.
We believe that an early conclusion of the Viet Nam-Korea FTA would effectively facilitate the expansion of bilateral trade and achieve the target of US$30 billion after 2015 set by the two governments. At the same time, the FTA would also help bride the lingering large trade deficit from the Vietnamese side with Korea, which counts for 40% of Viet Nam’s global trade deficit.
Viet Nam and Korea have also been closely working with each other on measures to renew the MOU on Korea accepting new Vietnamese workers to work in Korea under the EPS system (the MOU has been temporarily stopped since 28 August 2012 and due to this no new workers from Viet Nam have been allowed into Korea).
To strengthen bilateral political, cultural and economic cooperation is the most important factor to consolidate and further develop the Viet Nam-Korea strategic cooperation partnership.
Q: Since President Lee Myung Bak founded “Strategicv Partnership” between the two countries in 2009 Oct., what has been achieved so far?
A: Since October 2009, when Viet Nam and Korea agreed to upgrade their bilateral relationship to that of a strategic cooperation partnership, friendship and cooperation between the two countries has developed more dynamically and effectively. To become a strategic cooperation partner is not a slogan or mere desire, but it has indeed become a living reality in the relationship between Viet Nam and Korea. During the state visit of Korean President Lee Myung Bak to Viet Nam in October 2009, Korea became one of the first five strategic cooperation partners of Viet Nam along with important countries such as Russia, China, Japan and India. Korea has enjoyed a high position in Viet Nam’s foreign policy.
In regards to political relations, Korea and Viet Nam have built deep mutual understanding and trust among leaders at the highest level. Annual Vice-Mininisterial level strategic dialogues on foreign affairs, security and national defence have been conducted.
In terms of economic cooperation, Korea has become one of the leading economic partners of Vietnam, as mentioned above, which has contributed significantly to the process of industrialization and modernization of Viet Nam.
In cultural and tourism cooperation, Viet Nam and Korea have successfully promoted cultural exchange through expanding Hallyu in Viet Nam and Viet Nam organizing the Vietnamese Cuture and Tourism Week in Korea on an annual basis. The two sides signed an MOU regarding tourism exchange in 2010 that helped to increase the number of tourists travelling from Korea to Viet Nam (567,000 people in 2012) and from Viet Nam to Korea (over 200,000 tourists in 2012).
In regards to labour cooperation and people-to-people interaction, there are around 65,000 Vietnamese workers working in Korea. The Vietnamese community of 123,000 people in Korea and the Korean community of 130,000 people in Viet Nam are actively contributing to strenthening friendship and all-round cooperation between the two countries. So far, 35 localities (cities, provinces, districts) in Viet Nam and Korea have established sister relations with each other. Their friendly,cooperative relations have been increasingly dynamic and fruitful.
Bilateral relations in areas such as education, training, science and technology have also been further developed, thus basically meeting the needs and desires of people of both countries.
Q: There are numerous ongoing business projects in Vietnam that are performed by Korean firms and public organizations in various fields. How have their performances been evaluated in your country?
A: As of 20 October 2012, there are over 3,134 projects being invested in by more than 2,500 Korean companies in various localities in Viet Nam. Their performance have been considered highly successful and helpful in the following aspects:
Firstly, Korean companies have invested in areas the most important for Vietnam’s economic development, such as industrial production, infrastructure development (roads, highways, bridges, power plants, water supply, urban development, residential areas), and human resource development.
Secondly, Korean companies have contributed greatly to Vietnam maintaining its high GDP growth rate.
Thirdly, Korean companies have contributed to strenthening socio-economic development in terms of expanding exports from Viet Nam to international markets, increasing budget revenue through taxes, employing over 500,000 Vietnamese workers, and contributing to various social and humanitarian activities in Viet Nam.
Lastly, according to international market evaluation organizations, Korean companies are considered very successful in Viet Nam and have enjoyed the highest profit rates there in comparison with companies from other countries. Korean companies’ efficient performances, impressive achievements and significant contributions to the country’s socio-economic development are appreciated by the Vietnamese government and its people.
Q: What do you think are the most promissing areas in which Korea can make the best of its participation in your country?
A: Vietnam is in the process of expediting its industralization and modernization so as to basically become a modern-oriented industrialized country by 2020. Korea, as an industrially-developed country with high technologies, rich financial resources, miraculous development experience, and highly effective management skills, has a lot to offer.
The most promissing areas in which Korea can make the best of its participation in Viet Nam can be seen from the country’s objective to become a modern-oriented industrialized country by 2020. In the economic field, we must combine the strong economic, financial and technological potential of Korea with the development needs of Viet Nam, particularly in the following areas:
(i) Infrastructure: which includes both hard and soft infrastructure. In terms of hard infrastructure, Korea can participate in the construction of roads, highways, bridges, seaports, airport, power plants, and water processing and supplying systems. In regards to soft infrastructure, Korea can take part in the improvement of governance, human resource development, capacity building, improvement of socio-economic infrastructure, and scientific and technological development. All this infrastructure is badly needed by Viet Nam over the next 10-20 years. Along with investment in the forms of FDI and ODA, Korea can also effectively cooperate with Viet Nam in public-private partnership (PPP), which is strongly encouraged by the Vietnamese Goverment.
(ii) Supportive industries: Korea has already established various basic industries in Viet Nam, such as automobile, audio-visual, computer, and mobiphone. One of the urgent needs of Viet Nam is to develop supportive industries to those basic industries so as to achieve the goal of localization of products. The Vietnamese Government has issued various incentive policies to develop supportive industries, such as free advertising on the websites of the Ministry of Industry and Trade and Provincial Departments of Industry and Trade, the favourable provision of land use and bank loans, financial support to investment and trade promotion activities, and import and export tariffs concession, etc.
(iii) Green growth: Viet Nam is Korea’s strategic partner in green growth and Korea has been committed to its cooperation with Viet Nam in this area so as to ensure the harmonous combination of fast economic growth and effective environment protection, as well as to successfully cope with climate change which is becoming an increasing challenge for costal countries such as Vietnam and Korea. Viet Nam encourages cooperation in the development of environment-friendly technologies and industries, an area that Korea has vast potential in.
Q: As Ambassador of Vietnam to Korea, are there any particular requests or expectations you would like to share during your stay in Korea?
A: First, I have a deep admiration for the Korean Government and its people for their miraculous development over a relatively short period of time. Throughout itheir 5,000 year history, the Korean people have well preserved their cultural identity, national traditions and language. Korea has successfully turned itself from a poor agricultural, backward country devastated by war into an industrialized country in a very short period of time and is now enjoying an increasingly high position in the world. Korean people are generous, ready to share with developing countries their development experience, promote investment and grant ODA assistance. I would like to see the Korean development miracle become more widely-known in developing countries as an example for them to develop their respective economies.
Second, Vietnam and Korea share a similiar history, cultural traditions and values, especially the common objective of building prosperous, happy countries in a peaceful, stable environment. The two countries also share a very special relationship, with there being over 50,000 Korean-Vietnamese families. All those factors have bound Viet Nam and Korea together in a special relationship – strategic cooperation partnership. The two countries must by all means strengthen their friendship and cooperation so as to serve their common objectives.
I expect and strongly believe that this special relationship, imbued with warm sentiment and shared interests, will be respected, maintained and further developed by the present and future generations of both Vietnamese and Korean people.