Russia and Vietnam seek improved ties
HANOI - Trade and investment flows between Russia and Vietnam are
well below potential and are out of step with the two countries' renewed
strategic partnership, according to AT Sinikov, Russian Trade
Representative to Vietnam.
Sinikov said that although Russia is the sixth largest investor in Vietnam,
with involvement in 30 projects worth US$1.5 billion, mutual trade
cooperation could be significantly better. "Vietnam still has many needs
that Russian manufacturers can meet, such as automobile technology,
machinery, spare parts, ferrous metals, cable and fertilizer," he said. "On
the other hand, Vietnam can export tropical fruit, vegetables, rice, tea,
tropical essence oil, natural rubber, garments, textiles and handicraft
products to Russia."
Energy, fuel, oil and gas fields, petrochemistry, construction materials,
railways, roads and bridges are also worthy of greater cooperation,
Sinikov said.
Since Russian President Vladimir Putin's visit to Vietnam in February, the
number of Vietnamese coming to Russia to scope out business
opportunities has increased markedly. The two countries have also
provided each other with special deals, including Russia's backing for a
Vietnamese trading center in Moscow.
Petec, a Trade Ministry export-import company, has set up a branch
office in Moscow, and Vietcom bank is also completing the registration
procedures to open a branch office in Russia.
According to Nguyen Thi Phong Thao, a specialist in Vietnam-Russia
trade, the Vietnamese business network in Russia numbers almost
150,000 people. "Vietnamese goods are still in favor with Russian
consumers and there are plenty of opportunities for Vietnamese
entrepreneurs there," she said. "But because Russia is also in the process
of reforming itself, there is an element of uncertainty about the economy
there."
Thao also warned that interest rates in Russia are still high, and that it is
occasionally difficult to make letter of credit payments. "Because of the
time difference and the geographical distance, it often takes three months
to complete a contract. This weakens our products' competitiveness over
there compared to countries bordering Russia," she said.
Vietnam's Trade Attache to Russia, Nguyen Chi Tam, revealed that
Russian businesses have expressed interest in forming joint ventures with
Vietnamese partners to process tea, make condensed fruit juice and
manufacture high-quality garments in Russia for export to the European
Union markets.
The Vietnam Leather and Footwear Company is following this route.
Tam said that the company plans to establish plants to produce shoes in
Russia for the Russian market.
Meanwhile, Russian business people in Vietnam are reportedly happy
with the progress of the two countries' joint venture projects. Deputy
Trade Minister Ho Huan Nghiem said that although investment capital
flows are still modest, bilateral business ties will probably see a rapid
increase in the future.
Asia Times - November 15, 2001.
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