Vietnam, Indonesia to reach US$10 billion in bilateral trade

09:19 | 15/09/2017 Vietnam - Asean

(VEN) - “I expect Vietnam and Indonesia can reach a total trade value of US$7.5 billion by the end of 2017. This will be a step to reach US$10 billion by the end of 2018”, said Ibnu Hadi, Indonesian Ambassador to Vietnam in a talk with Vietnam Economic News’ Nguyen Huong about economic cooperation between the two countries. 

vietnam indonesia to reach us 10 billion in bilateral trade
Ibnu Hadi, Indonesian Ambassador to Vietnam

Please tell us about the cooperation between Vietnam and Indonesia recently, especially in the fields of trade and investment cooperation?

According to the World Bank’s statistics, Indonesia is the world’s 16th largest economy and also the largest market in Southeast Asia. Despite global and regional economic uncertainties over the past time, trade between Vietnam and Indonesia has made significant strides. At present, Indonesia is Vietnam’s fourth largest trade partner in the Association of Southeast Asian Nations (ASEAN), with two-way trade expanding from US$4.6 billion in 2012 to US$5.6 billion in 2016, and an annual average growth rate of about five percent. In 2016, export and import revenues between the two countries reached US$2.6 billion and US$3billion respectively.

In the first six months of 2017, Indonesia’s exports to Vietnam reached US$1.76 billion, and the top four export items were automotive, coal, metal, equipment and devices. On the other hand, Vietnam’s exports to Indonesia reached the same value of US$1.75 billion, with the four largest items being mobile phones and parts, metal, equipment, devices, computers and spare parts.

Vietnam and Indonesia should step up their cooperative efforts in order meet the bilateral trade target of US$10 billion by 2018.

Recently, the Indonesian Embassy launched many events to promote economic cooperation between the two sides. What are the results of these programs?

Actually in the last two months of June and July 2017, the Embassy of the Republic of Indonesia organized three seminars and business forums.

The products that we are trying to improve the bilateral trade between Vietnam and Indonesia are automotive, coal, palm oil and paper which are always Indonesia’s top commodities exports to Vietnam. We hope these business forums will give chances to Indonesian and Vietnamese importers and exporters to meet each other to have possible business, which can increase to the overall bilateral trade volume between the two countries.

What is AEC’s impact on the relation between the two countries? What should the two sides do to take all AEC advantages?

The ASEAN Economic Community was established on December 31, 2015 with an underlying agenda of economic integration of ASEAN countries to eliminate or minimize obstacles in economic activities across the region, trade, goods and services, and investment. AEC creates greater economic opportunities for Indonesia, specifically with the marketing of goods and services from Indonesia by expanding its reach to other ASEAN countries including Vietnam. Under AEC, exports and imports will be processed cheaper with an additional benefit tied to labor from other countries in ASEAN, as people from these countries will be free to work in Indonesia and in contrast, Indonesian workers (TKI) will be free to work in other countries in ASEAN.

In its core, AEC will create a single regional common market of ASEAN countries, which comprises five core elements - free flow of goods, free flow of services, free flow of investment, free flow of capital and free flow of skilled labor. Regionally, there will be a competitive market of over 600 million people.

A single market for goods and services will also facilitate the development of production networks in the region and enhance ASEAN’s capacity to serve as a global production center or as a part of the global supply chain. Through AEC, there will be greater capital and people mobility among the ASEAN countries, which benefit the economic growth of its member countries.

Now, bilaterally speaking, such improvement and dynamic will be beneficial to strengthen our economic cooperation because AEC will urge member states to raise the standard and competitiveness, and in that essence the trade and investment will only enhance between Indonesia and Vietnam.

What is your expectation on economic cooperation between Vietnam and Indonesia in the future? Do you have any specific plan to promote relations between Vietnam and Indonesia in the future?

By witnessing the total trade value between Indonesia and Vietnam for the first six months of 2017, I expect we can reach a total trade value of US$7.5 billion by the end of 2017. This will be a step to reach US$10 billion in total trade value of both countries by the end of 2018.

Opening a direct airway between Hanoi and Jakarta is my greatest wish. And I will do my best to be able to do this during my tenure in Vietnam. In addition, I expect that in 2017 the two countries will come to the conclusion of the EEZ, will have a cooperative tie in fisheries. I’m looking forward there will be 20 investment projects in Vietnam or expansion of existing projects. In addition, I hope that the two countries will have greater cooperation on health and education too. Indonesia can provide medicine or open universities and colleges in Vietnam, no necessarily in Hanoi. We have two scholarships after all this time, Damasiswa and BSBI, but I still hope both countries can also increase the interest of the student exchange program to promote both cultures to the youth in hope it can increase the promotion.

Nguyen Huong