Viet­nam seen as S Ko­rea’s en­try to Asean

The Phnom Penh Post - - BUSINESS -

SOUTH Ko­rea’s in­vest­ment played a key role in the co­op­er­a­tion with Viet­nam, but the link­age be­tween for­eign di­rect in­vest­ment and the do­mes­tic sec­tor re­mained rel­a­tively weak.

Viet­nam is seen as a gate­way for busi­nesses from South Ko­rea to en­ter the Asean mar­ket, said ex­perts at a fo­rum in Hanoi on Mon­day.

The fo­rum on South Ko­rea’s New South­ern Pol­icy and the im­por­tance of South Kore­aViet­nam re­la­tions was co-or­gan­ised by the Na­tional Cen­tre for So­cio-eco­nomic In­for­ma­tion and Fore­cast­ing (NCIF), and the Korean In­sti­tute for In­ter­na­tional Eco­nomic Pol­icy (KIEP).

In his open­ing speech, NCIF Di­rec­tor Tran Hong Quang said over the past three decades, Viet­nam-South Ko­rea re­la­tions have seen fine de­vel­op­ments in all fields. At present, South Ko­rea is one of the two largest for­eign in­vestors in Viet­nam with ac­cu­mu­lated cap­i­tal of $57.6 bil­lion by the end of last year. Viet­nam is also the fourth largest in­vest­ment des­ti­na­tion and the big­gest aid re­cip­i­ent of South Ko­rea.

South Ko­rea is the sec­ond largest trade part­ner ofViet­nam, with two way trade in­creas­ing 117 times since 1992, when the two na­tions set up their diplo­matic ties, hit­ting $61.5 bil­lion last year.

The two coun­tries have also seen pos­i­tive col­lab­o­ra­tion in labour, cul­ture and tourism.

By the end of last year, theViet­namese com­mu­nity in South Ko­rea num­bered 162,000, most of them are guest work­ers, those get­ting mar­ried to South Koreas, and stu­dents. Mean­while, around 150,000 South Kore­ans, mostly busi­ness­peo­ple, are liv­ing in the South­east Asian na­tion.

“Viet­nam al­ways at­taches im­por­tance to and wishes to deepen the strate­gic co­op­er­a­tive part­ner­ship with South Ko­rea, which gives high pri­or­ity to col­lab­o­ra­tion with Asean, in­clud­ing Viet­nam,” said Quang.

KIEP Pres­i­dent Lee Jae-young said the New South­ern Pol­icy aims to raise South Ko­rea’s co­op­er­a­tion and diplo­matic re­la­tions with Asean coun­tries and In­dia on par with those with the US, China, Ja­pan and Rus­sia.

No­tably, in its eco­nomic re­la­tions with Asean – a fo­cus of the pol­icy, Viet­nam plays a cru­cial role, ac­count­ing for more than half of co­op­er­a­tion in al­most all fields such as trade, in­vest­ment, of­fi­cial devel­op­ment as­sis­tance and peo­ple-to-peo­ple ex­change.

Ko­rea Univer­sity’s Park Bun­soon said there were many ar­eas in which South Ko­rea and Viet­nam could fur­ther co­op­er­ate, in­clud­ing in the devel­op­ment of high-tech in­dus­tries, Viet­nam’s re­struc­tur­ing of sta­te­owned en­ter­prises, trade and in­vest­ment.

“Korean in­vest­ment would con­tinue to flow in­toViet­nam in the fu­ture,” Park said.

South Ko­rea’s in­vest­ment played a key role in the co­op­er­a­tion be­tween the two coun­tries but link­age be­tween for­eign di­rect in­vest­ment and the do­mes­tic sec­tor re­mained rel­a­tively weak.

He said the cap­i­tal flow from South Ko­rea should be en­cour­aged to de­velop Viet­namese small- and medium-sized en­ter­prises and the part-sup­ply in­dus­try. At the same time, Viet­nam should de­velop its ca­pac­ity to ab­sorb tech­nolo­gies by en­hanc­ing co­op­er­a­tion in re­search and devel­op­ment.

“Viet­nam also needs to pro­vide op­por­tu­ni­ties for Korean in­vestors to par­tic­i­pate in merg­ers and ac­qui­si­tions.”

Stress­ing the role of Viet­nam in Asean, Prof Park said that South Ko­rea might seek a ‘Viet­nam +1’ strat­egy, adding that busi­nesses from both sides could make joint ef­forts to en­ter neigh­bour­ing mar­kets.

Tran Toan Thang from NCIF said that as part of the New South­ern Pol­icy it was im­por­tant to link South Ko­rea to Asean through Viet­nam.

Thang pointed out the large and in­creas­ing trade deficit with South Ko­rea and poor link­age be­tween Viet­nam’s do­mes­tic firms and South Korean firms re­mained is­sues to be ad­dressed i n boost­ing co­op­er­a­tion be­tween the two coun­tries.

An­other prob­lem was the low per­cent­age ofViet­namese en­ter­prises – only 33 per cent in the first six months of this year – tak­ing ad­van­tage of the Viet­namSouth Ko­rea free trade agree­ment ( VKFTA) d u e t o un­aware­ness of Viet­namese firms and the un­avail­abil­ity of a proper cer­tifi­cate of ori­gin sys­tem for Viet­namese firms.

“It is crit­i­cal to strengthen link­ages be­tween Viet­namese and South Korean firms and im­prove aware­ness of Viet­namese firms on rules of ori­gin un­der the VKFTA,” Thang said.

Ad­di­tion­ally, fo­cus should be placed on pro­mot­ing the con­sump­tion of Viet­namese goods in South Ko­rea and es­tab­lish­ing a net­work con­nect­ing busi­nesses on both sides, he said.

At the con­fer­ence, KIEP and NCIP signed a re­newed mem­o­ran­dum of un­der­stand­ing.

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