12:20 | 12/03/2017 Vietnam - Asean
(VEN) - Vietnamese Minister of Industry and Trade Tran Tuan Anh, and Myanmar Minister of Commerce Than Myint, met for a talk in January 2017 about trade and investment cooperation.
Exceeding the target
According to the Ministry of Industry and Trade, two-way trade turnover between Myanmar and Vietnam reached an estimated US$536 million in 2016, exceeding the target of US$500 million set out by the two countries. Vietnam’s export turnover to Myanmar of steel, vehicles, spare parts, machinery and equipment stood at US$456 million, an increase of 20.4 percent compared to 2015. Meanwhile, import turnover of rubber materials, wood, agro-forestry and fishery products totaled US$82 million, a year-on-year increase of 45.2 percent. Thanks to such results, Vietnam was Myanmar’s ninth largest trade partner.
Tran Tuan Anh said that room for growth of bilateral trade between Vietnam and Myanmar is huge. To improve trade, the two sides agreed on several measures such as further strengthening trade promotion activities, promoting the role of the East-West Economic Corridor on trade facilitation, maintaining the Vietnam-Myanmar Joint Sub-Committee on Trade, and enhancing Cambodia, Laos, Myanmar and Vietnam (CLMV) cooperation.
The Vietnamese Ministry of Industry and Trade is proposing that the Myanmar Ministry of Commerce support Vietnam in cement exports, narrow the list of products that require an import license, and create favorable conditions for Vietnamese businesses in strengthening investment in Myanmar.
Improving the investment environment
Around 80 Vietnamese businesses have invested in Myanmar with total capital of more than US$1 billion, bringing Vietnam to 10th place in the list of foreign investors in Myanmar. Some large Vietnamese businesses have invested in Myanmar, such as Hoang Anh Gia Lai, the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), and Viettel. The Vietnamese telecom giant is one of the most successful investors, with four projects in Myanmar. The fourth project, with total investment capital of US$2 billion, was licensed in January 2017.
Than Myint said there are opportunities for Myanmar to promote foreign direct investment (FDI). Myanmar is a signatory of the Generalized Scheme of Preferences (GSP) that allows it to pay less or no duties on exports to the EU, the US and India. Foreign investors in Myanmar might be able to take advantage of this scheme to benefit from incentives if they export goods to those countries.
The Myanmar government has also issued an economic development program with a focus on promoting the development of private businesses and strengthening global integration. To promote FDI, the Myanmar government has promulgated a new law on investment, while conducting tax reforms in accordance with international practices.
The Myanmar government is committed to creating favorable conditions for Vietnamese investors. According to Tran Tuan Anh, in addition to large corporations, many small and medium-sized enterprises have also expressed interest in the Myanmar investment environment.
Tran Tuan Anh also said that to attract Vietnamese businesses, the Myanmar government needs to further improve the investment environment, as well as facilitate their operation. Vietnamese businesses are reporting that some policies in Myanmar have caused difficulties, such as a threshold requirement of US$40 million for the operations of BIDV in Yangon and policies that do not allow foreign banks to conduct direct transactions with local businesses.
Also burdening Vietnamese operations in Myanmar is a transportation infrastructure not yet developed in line with local economic growth, negatively affecting its investment environment. To promote investment from Vietnam and other countries, the Myanmar government is said to need appropriate policies to engage the participation of private businesses in the development of transport infrastructure based on private-public-partnership models.