15:57 | 30/12/2015 Cooperation
(VEN) - Vietnam’s foreign trade since the beginning of this year has now reached about US$300 billion in value, of which trade between Vietnam and Indonesia accounted for just nearly US$5 billion. The establishment of the ASEAN Economic Community (AEC) by the end of this year promises great prospects for economic cooperation between the two countries.
Vietnamese Deputy Minister of Industry and Trade Do Thang Hai (third from the right) visits an Indonesian trade fair in Vietnam
Vietnam and Indonesia signed a comprehensive partnership agreement in 2003 and upgraded bilateral relations to a strategic partnership in 2013. Vietnam currently is Indonesia’s only strategic partner in Southeast Asia.
Indonesian Ambassador to Vietnam Mayerfas believes there are a lot of opportunities for the two countries to expand cooperation, bringing into play the advantages of each side. Indonesia currently is the largest market in Southeast Asia. Vietnam and Indonesia have total population of 340 million, accounting for more than half of the regional population. The two countries have set a US$10 billion target for bilateral trade by 2018.
Trade between Vietnam and Indonesia increased from US$2.3 billion in 2009 to nearly US$5.4 billion in 2014. In the first 11 months of this year, bilateral trade reached nearly US$5 billion, including about US$2.29 billion worth of Vietnamese exports to Indonesia, and US$2.17 billion worth of imports from this market. Major Vietnamese exports to Indonesia included telephones and components, iron and steel, and materials for textile, garment, and footwear production. Vietnam imported Indonesian products such as paper, machinery, equipment, instruments, and chemicals.
In terms of investment, by the end of November 2015, Indonesia had nearly 50 projects ongoing in Vietnam with total investment of over US$407 million, ranking 28th among 105 countries and territories investing in Vietnam.
Opportunities for Vietnamese businesses
According to Ambassador Mayerfas, Indonesia is one of the world’s largest rice consumers, and although it is a rice producer, Indonesia still has to import rice from other countries, including Vietnam. He hoped that Indonesia’s demand for importing one million tonnes of Vietnamese rice annually would be satisfied.
Indonesia also has high demand for importing coffee. Last year, it imported US$40-50 million worth of Vietnamese coffee, and the import value is expected to increase in the future.
Regarding Indonesia’s investment attraction policy, Pratito Soeharyo, Director for Business Empowerment at the Indonesia Investment Coordinating Board, said the Indonesian government would create more favorable conditions for Vietnamese businesses to invest in provinces located far from the country’s center through a number of preferential policies. When they invest in Indonesia, foreign businesses will be offered tax exemptions for a period of 5-15 years or even 20 years if their investments cover strategic sectors of the Indonesian economy. Indonesia is developing a one-stop, one-seal system for administrative procedures, so it just takes businesses 7-15 days to get an investment license. Potential areas for Vietnamese businesses to invest in Indonesia include infrastructure, agriculture, tourism, seaports, and mining.