ASEAN Businesses: Looking to Regional Corporation

4:58:54 PM | 8/16/2007

Vietnamese Prime Minister Nguyen Tan Dung has affirmed Vietnam’s determination to successfully build the ASEAN Community from three pillars of security, economy and socio-culture. The Prime Minister’s visit to six ASEAN member countries, accompanied by a large group of businesses, demonstrates Vietnam’s efforts in this direction.

In August, Prime Minister Nguyen Tan Dung paid an official working visit to six countries in Southeast Asia; Indonesia, the Philippines, Singapore, Myanmar, Brunei and Malaysia.

Harmonisation of national and ASEAN interests

PM Dung said that in order to successfully build the ASEAN Community by 2015, each ASEAN member country, first and foremost, needs to combine and harmonise its own interest and ASEAN common interest.

ASEAN needs to raise the efficiency of its organisation and operational mechanism. ASEAN has practical and effective measures to bridge the gap among its members. ASEAN needs to maintain and consolidate its central role in regional cooperation arrangements for peace, cooperation and development in the Asia Pacific. The Prime Minister affirmed that Vietnam actively takes part in ASEAN cooperation activities and contributes to ASEAN unity, strength and a higher position on the international arena.

Thus, the first visit of Prime Minister Nguyen Tan Dung since he was re-elected is to ASEAN nations. Interestingly, his visit also coincides with the 40^th anniversary of the Association of Southeast Asian Nations (ASEAN).

Awakening commercial potential

The Prime Minister is accompanied by more than 40 leading Vietnamese companies operating in information technology, electronics, construction, mechanical engineering, services, agriculture and forestry. The Vietnamese business community reportedly attaches special importance to ASEAN markets. Mr Pham Dang Hung, Deputy General of Quang Minh Pharmaceuticals Company said, “I think the visit of the Prime Minister to ASEAN countries will have a huge influence on Vietnamese businesses as well as partners’ ones. The visit bolsters confidence for the two communities to sign business deals, and sign and carry out more new projects. I think the preferential tax from zero to 5 per cent for commodities within the bloc enables Vietnam to export more goods to foreign countries.”

ASEAN markets now occupy some 20 per cent of Vietnam’s total export earnings and take some 25 per cent of Vietnam’s expenditure on imports. ASEAN markets are the largest consumers of Vietnamese farm products, especially rice, while they are the major suppliers of machinery, equipment, materials and especially petroleum products to Vietnam.

Mr Le Thanh Chau, director of Vinh Dinh Mechanical Technique Trade and Service Co. Ltd said, “In my opinion, the levels and technologies of regional countries are similar. Of course, each country will have products of with specific advantages and will find cooperation opportunities.”

Regarding investment cooperation projects during the Prime Minister’s visit, Mr Tran Tu Kha, general director of Vietnam Golf Tourism Joint Stock Company said, “My company plans to seek partners for travel and hotel projects in Vung Tau and Da Lat cities. Currently, we are heading for integration and ASEAN is a common house; we want close cooperation with partners from ASEAN countries in the tourism field.”

Stepping up investment cooperation

The direct investment capital flows from ASEAN countries into Vietnam are recovering after the regional financial crisis in 1997. According to the Foreign Investment Agency under the Ministry of Planning and Investment, ASEAN region investors have invested in around 1,000 projects worth more than US$16 billion in Vietnam so far.

According to economic experts, investment capital from ASEAN countries will continue flowing into Vietnam in the coming time, because a large majority of ASEAN countries are developing export-oriented economies based on processing technology, but they lack material and have high-paid labour, while Vietnam is a big market with a low-paid labour force and rich material sources.

Mr Hoang Thai Son, Vice Chairman in charge of the southern region of Vietnam Electrical Industry Association said, “The Southeast Asian market has rich potential for electrical equipment manufacturers, especially in Myanmar, Brunei and Indonesia. At present, association members export some US$10 million worth of electrical parts to Southeast Asian nations. After the visit, we will boost investment and business cooperation.”

To further draw investment capital from regional countries, especially in potential partners, the Government is speeding up the inspection and categorisation of projects from ASEAN countries, to create the most favourable assistance measures for them, especially those from Singapore, Malaysia and others.

The Government also encourages and assists Vietnamese enterprises to invest in ASEAN member countries by opening seminars for information exchange and organizing market surveys.

Investment from ASEAN countries into Vietnam (US$)

Country	No. of projects	Total investment capital	Legal capital	Realised capital
Singapore	503	9,600,965,157	3,458,383,443	4,072,036,493
Malaysia	223	1,755,606,518	789,520,234	1,137,480,492
Thailand	153	1,540,027,929	595,118,448	832,736,253