Spurring Vietnam-Russia economic ties

14:26 | 09/04/2015 Cooperation

(VEN) - Vietnamese and Russian businesses are expecting that bilateral economic, trade and investment relations should see a breakthrough after the official visit to Vietnam by Russian Prime Minister Dmitry Medvedev from April 5-7, 2015.

Spurring Vietnam-Russia economic ties

Vietnam and Russia have great potential for cooperation in energy.

Trade exchange remains modest

Given Europe’s embargo of Russia, the country needs to import a large amount of goods from other countries. However, it seems that Vietnamese businesses are still facing numerous difficulties in exporting their products to this market.

This is reflected through trade revenue which remains very modest. According to the European Market Department under the Ministry of Industry and Trade, two-way trade between Vietnam and Russia came to US$2.76 billion in 2013. According to the Vietnamese General Department of Customs, bilateral trade revenue dropped by 7.6 percent to US$2.55 billion in 2014. Of this, Vietnam sold about US$1.7 billion worth of goods to Russia, a 9.3 percent decrease, and bought US$820 million worth of goods from this market, a 3.8 percent decrease from a year ago.

Two-way trade continued to face difficulties in the first two months of this year as total export and import revenues reached an estimated US$309 million, a 24.33 percent decrease from the same period last year, including US$220 million worth of Vietnamese exports, a 25.08 percent drop, and US$89.7 million worth of Vietnamese imports, a 22.42 percent decline.

According to the European Market Department, trade between the two countries is facing difficulties, largely due to payment problems such as drastic changes in the exchange rate of the Russian rouble and unfavorable bank transfer.

Many engines to promote comprehensive cooperation

Vietnam and Russia have set a goal to achieve two-way trade revenues of US$10 billion by 2020 as a result of the Vietnam-Customs Union of Russia, Belarus and Kazakhstan Free Trade Agreement (VCUFTA).

Regarding priorities for economic cooperation between the two countries in the near future, Russian Ambassador to Vietnam Konstantin Vasilievich Vnukov said that Russia particularly encourages Vietnamese businesses to export their agricultural products and invest in agriculture in Russia including food and foodstuff production and processing. Their investments should go not only to the capital of Moscow and neighboring areas but also potential regions such as the Far East, the central region in Russia and Siberia which are vast, fertile and ideal locations for development of agricultural projects. Russia is currently suffering from European sanctions. “However, this is an opportunity for Vietnamese friends, which you must seize quickly,” said Ambassador Konstantin Vasilievich Vnukov.

According to the European Market Department, to boost economic cooperation, the two parties need to strongly promote VCUFTA negotiations and try to conclude talks in the early half of this year. In addition, they should try to strengthen activities of the Vietnam-Russia Senior Workgroup on Priority Investment Projects in order to make a list of highly-feasible priority investment projects, while at the same time continuing to implement resolutions set at the 17th Session of the Vietnam-Russia Joint-government Commission on Economic, Trade and Science-Technology Cooperation.

Apart from trade, Vietnam and Russia have great potential for cooperation in energy. A number of Vietnamese businesses such as Rusvietpetro and Gazpromviet have invested in oil and gas in Russia. Meanwhile, many Russian giants such as Gazprom, NK, Rosneft and Zarubezhneft are investing effectively in the energy industry in Vietnam.

By Nguyen Phuong

Theo ven.vn