Ties with Indonesia to become stronger

09:23 | 26/09/2011
Following Vietnamese Prime Minister Nguyen Tan Dung’s recent visit to Indonesia, VIR’s Kieu Linh speaks with Nyoman Gurnitha, Counsellor of the Indonesian embassy in Vietnam about bilateral relations between the two countries.

What is your assessment of the overall state of trade and investment relations between Vietnam and Indonesia?

We are very pleased to see the remarkable development ofthe relations and cooperation between Indonesia and Vietnam in multifaceted aspects over the recent years, especially in terms of trade and investment. In 2010 the value of trade between the two countries reached $3.5 billion, which was the highest figure ever during the 66 years of diplomatic relations between the two countries.

However, the development of the trade cooperation between our two countries is still far from our potential, especially when taking into account the huge domestic markets of both countries and the increasingly growing purchasing power of our people. Therefore, we must work harder and harder in the coming years to double our bilateral trade turnovers.

We hope that the Vietnamese business people do not ignore Indonesia with multiple opportunities for foreign investors. Indonesia’s investment climate is becoming more conducive while its competitiveness index has also been improved significantly, which hopefully, would be attract more Vietnamese entrepreneurs to do business in Indonesia.

In addition, looking at the progress achieved by Vietnam, we think that Vietnam is also a promising market with increasing purchasing power which should not be missed out by the Indonesian businessmen.

As of August 20, 2011, Indonesia had 28 direct investment projects registered in Vietnam with combined capital of $206 million. In what fields are Indonesian investors currently interested in Vietnam?

Indonesian investors are very interested in infrastructure and property sector. Currently, infrastructure development is very important due to its highly important impact on the improvement of Vietnam’s economic growth.It is estimated that Vietnam would need a fund of about $150 billion for infrastructure development within 5-10 years. In the next five years, transportation infrastructure developmentwould become a special concern of the Vietnamese government.

Therefore, the Vietnamese government is encouragingthe private sector to invest in transportation infrastructure which has undergone fundamental changes, particularly in terms of highway, rail, river, sea and air transportation infrastructure. In line with the course of national development and integration with regional and international communities, the infrastructure sector is becoming a key driving force for high growth rates with priority given to investment projects, particularly in the field of transport infrastructure. To achieve these targets, the Vietnamese government will provide investment funds from the state budget amounting to 3.5 per cent of gross domestic product.

The Vietnamese government is also seriously undertaking promotional activities to attract foreign investors in the development of the property sectorby facilitating the construction of facilities and infrastructure, allocation of land and stabilisation of land prices, and especially improving the transparency and simplification of administrative procedures. Development of the property sector is truly crucial to the Vietnamese economy following the agro-industrial and service sectors. We think that opportunities are still open for investors from Indonesia to invest in the property sector including industry, real estate and apartments as pioneered by Ciputra Group in Hanoi.

What are your opinions about the investment environment in Vietnam?

Vietnam's investment environment is attractive to foreign investors due to several factors. These include Vietnam having a strategic position in the region and is growing very rapidly,  Vietnam’s macroeconomic and political conditions are relatively stable,  Vietnam has many mineral resources, Vietnam has a low-cost, diligent and skillful labour force, Vietnam has a large domestic market, Vietnam has the potential to be a prospective supplier for the EU and US markets, and  the Vietnamese government is committed to continue to its economic liberalisation and reform efforts.

In addition, Vietnam’s economic integration with the global economy has made Vietnam attractive as an investment destination. This is evidenced by the Vietnam’s accession into ASEAN in 1995 and the World Trade Organization in 2007, followed by a surge in the ratio of exports and imports to GDP which was recorded at 150 per cent in 2010.

What do you expect about economic, trade and investment cooperation between Vietnam and Indonesia after Dung’s visit to Indonesia?

We hope the visit of Dung will speed up the enhancement of the relationship and cooperation between the two countries in multiple fields, including economy, trade and investment. We consider Dung’s visit as an impetus for the business people of both countries to foster their business contacts to explore opportunities of mutual interests. Although the trade value reached more than $3 billion last year, we are not yet satisfied with the results and aiming at a double value of our bilateral trade in the near future. There are also numerous fields of cooperation which we have not adequately explored yet such as fisheries, agriculture, food, industry and healthcare.

We arealso delighted to see that Indonesia’s direct investment in Vietnam is on the increase with 28 projects and a capital investment at around $206 million. However, in real terms the value of Indonesia’s capital investment in Vietnam is more than $2 billion due to a number of projects being registered in a third country. We hope the success achieved by Indonesian investors in Vietnam will give special encouragement to other investors to take advantage of the prospective investment opportunitieshere.

Dung’s visit is not only a great honour for us but also sets out a mission for us touphold the existing relations and cooperation between our two countries to a higher level. The outcomes reached during Dung’s visit are expected to be the guidelines for Indonesia and Vietnam to work harder and move faster towards our common goals for the sake of prosperity and welfare of the people of both countries.

Dung’s trip to Indonesia has shown that Vietnam considers Indonesia as an important partner in ASEAN as well as in the region and showed the possibilities of lifting bilateral relations to a strategic level. What do you think about this?

The visit shows the close and historic diplomatic relations between the two countries. Indonesia is the second country visited by your prime minister following his re-election. It shows that Vietnam sees Indonesia as an important partner in the region. We think the most notable achievement is the signing of the Plan of Action between Indonesia and Vietnam to implement the Declaration in 2003. With the conclusion of the Plan of Action (POA) 2012-2015, the two countries would have a clear path to better explore the bilateral cooperation in politics, security, defence, economy, trade and investment, agriculture and fisheries, culture, education and training, sports and tourism and other potential aspects,particularly to reach the target of $5 billion in trade by 2015.

Dung and Indonesia’s President Susilo Bambang Yudhoyono noted the successful organisation of the three rounds of negotiations on demarcation of the exclusive economic zones. The two leaders also agreed to foster cooperation in marine and fisheries, including the need to prevent, combat and diminish Illegal, Unreported and Unregulated (IUU) fishing, as well as other issues of mutual concern as stipulated in the Memorandum of Understanding on Marine and Fisheries Cooperation signed in 2010.

Our leaders also witnessed the signing of the MoU on Joint Activities to Enhance Bilateral Communications and Consultations between the Ministries of Foreign Affairs of Vietnam and Indonesia, and shared a common standpoint on the organization of the meeting of the Joint Commission on Economic, Scientific and Technical Cooperation.

We consider all of the outcomes achieved during Dung’s visit to Indonesia as vivid reflections of both countries’ determination to continually uphold our traditional ties of amity and bilateral relations. 

By Kieu Linh


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