Vietnam, Russia set trade and investment goals

08:08 | 10/06/2015 Trade

(VEN) - During a recent meeting with Ho Chi Minh City People’s Committee, business associations and companies in Ho Chi Minh City, Vietnam President Truong Tan Sang underlined that Vietnamese firms need to try to increase Vietnamese-Russian trade revenues to about US$10 billion by 2020, following the Free Trade Agreement (FTA) between Vietnam and the Eurasian Economic Union (EEU).

Vietnam, Russia set trade and  investment goals

According to Truong Tan Sang, Vietnam and Russia have good and traditional relations in many areas such as politics, culture, security and defense. However, the economic and trade relations has yet to match its potential, and bilateral trade remains modest.

The economic, trade and investment relations between the two countries have increased in recent years reaching US$2.59 billion in 2014. Vietnamese major exports to Russia include telephones, garments, agricultural products and seafood. Vietnamese major imports from this market are gasoline, oil, steel, iron, fertilizer, machinery and equipment.

From more than US$100 million in investment capital in 2008, Vietnam currently has 19 investment projects with total capital of US$2.47 billion in Russia, focusing on petroleum and trade. Vietnamese major investment projects in Russia include the Rusvietpetro petroleum joint venture, Gazpromviet and the Hanoi Trading Center project in Moscow.

According to the Ministry of Industry and Trade’s European Market Department, Russia has stable politics, a large economy, an open market and great potential. The two countries have established a banking system, which provides convenient payment services. A large number of Vietnamese people are living in Russia. The Vietnamese business community in this country is quite big including many big-name businesses such as Rolton and Milton.

Russia adopted a draft agreement on an FTA between the Eurasian Economic Union (EEU) and Vietnam on May 25, 2015. Prior to that, an agreement on establishing the EEU was signed by the presidents of Russia, Kazakhstan and Belarus on May 29, 2014, and took effect on January 1, 2015. According to the EEU Establishment Agreement, goods, services, capital and labor force will move freely among the EEU countries including Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan.

The Bank for Investment and Development of Vietnam (BIDV) is looking to provide support for Vietnamese direct exporters to Russia such as considering a preferential credit package for exporters, connecting Vietnamese businesses with the Incentra Company and other partners in Russia, establishing a BIDV representative group in Russia, working with banks in Russia, and drawing-up a safe payment mechanism for Vietnamese export companies.

According to BIDV Management Board Chairman Tran Bac Ha, Vietnam is promoting its light industries investment projects in Moscow to encourage Vietnamese light industries businesses to invest in Russia. Vietnam expected to start work on an industrial park on 100-120ha in Moscow this coming September. Nineteen businesses have applied to operate in the park leasing about 39,000sq.m and employing 3,600 people./.

By Thanh Thanh