Robust Development in Vietnam- Japan Cooperation

“There will be more models of good business practice of Japanese investors in Vietnam in the coming time”, emphasized H.E Mr Hida Harumitsu, Consul General of Japan in Ho Chi Minh City in talk with Vietnam Business Forum. Duy Khang reports.

 

The Vietnam – Japan Economic Partnership Agreement (VJEPA) was signed in December 2008 and came into effect in October 2009. VJEPA has partly strengthened free trade and investment cooperation between Vietnam and Japan. For example, textile and garment products – key export of Vietnam- enjoys an increasing amount in Japanese market. Moreover, VJEPA has pushed up development cooperation in other fields including healthcare, tourism, etc. I believe that economic exchange between both countries will continue to grow in the coming time. Therefore, I think that VJEPA will play an important role in the development of Vietnam-Japan economic relations.

 

Vietnam-Japan diplomatic and friendship relationship has been continuously developed in the recent years based on strategic partnership status. As the largest ODA donor for Vietnam based on our special assistance plans for Vietnam, Japan has been executing assistance programmes for key sectors such as speeding up economic growth, strengthening international competitiveness ability, improving living standard, narrowing the gap between the rich and the poor, improving environment, etc. About quota for ODA of Japan for Vietnam in the future, although there are some unclear reasons such as earthquake disasters and tsunami in Eastern Japan, upcoming inflation situation in Vietnam, but I think that assistance package of Japan for Vietnam will be remained as previous years.

 

The Consulate General of Japan in Ho Chi Minh City has supported many activities not just in Ho Chi Minh City but other provinces and cities in Southern Vietnam. Specific characteristics of Japanese investment in Southern area focus on interdisciplinary activities, not just large enterprises but small and medium-sized ones. The number of members of Japan Business Association in Ho Chi Minh City (JBAH) stayed at 221 in 2000, the number is now 526 members. Additionally, the investment capital is on an increasing trend.

 

Thanks to EPA, I believe that there will be more and more models of good business practices of Japanese enterprises in Vietnam. As I know, Japanese enterprises are interested in investing in all sectors that Vietnam has competitive advantages.

 

These sectors are not those with cheap labor costs. In the context of high inflation and rising labor cost in recent time, there is a possibility that Japanese enterprises will move their production in Vietnam to other countries like Cambodia, Bangladesh, etc. To reduce trade deficits, I suppose that Vietnam need to enhance the added value of products, building supporting industries to actively produce materials & spare-parts, developing privately small and medium-sized enterprises as a crucial part of manufacturing sector.

 

Public-private-partnership (PPP) is still a new form of investment in Vietnam and Japanese Consulate General in Ho Chi Minh City is paying a special attention to this model. PPP aims to strengthen private sectors; this model is capable of using ODA capital. Although the PPP is still in process of surveying, but some projects such as “construction of environmental friendly industrial parks & traffic infrastructure” of Long An province; “infrastructure development for water sector” in Phu Quoc, Kien Giang province; “project of Long Thanh International Airport” in Dong Nai province, etc, are typical examples of PPP model using ODA capital of Japan. These projects are still under studying, but it is not clear that if they can be granted ODA capital or not, we are now closely monitoring these projects in the coming time.