"Strengthening bilateral relationship"

2007.5.19

1. What do you think about the two countries'''' relationship, particularly in the field of economic, commercial cooperation in the past time?

  ㅇ This year marks 15th anniversary of the establishment of diplomatic relations between Korea and Vietnam.  Since the establishment of diplomatic relations in 1992, Korea and Vietnam have developed their overall relationship into a "comprehensive partnership in the 21st century" over the past 15 years.

  ㅇ In particular, the relationship in the fields of economic cooperation, trade and investment has shown remarkable developments.  Two way trade has increased by 50 times, while investment into Vietnam by Korea has accumulated by over 80 times.

  ㅇ I believe that this kind of rapid development of relations between countries is a rare case worldwide.

2. According to statistics of the Ministry of Planning and Investment, in 2006, Korea was the 1st ranking investor in Vietnam with the triple increasing in FDI compared to the year 2005.  What is your opinion on this increasing and Vietnam''''s investment environment?

  ㅇ Korea ranked 1st in registered amount of FDI in Vietnam in 2006.  As of late April, 2007, Korea continued to rank 1st and captured the 2nd rank among foreign countries investing into Vietnam in terms of accumulated FDI volume. 

  ㅇ Last year, we have seen many massive and diverse Korean investment projects from north to south of Vietnam, including big investments of the heavy industry and construction field.

  ㅇ I am confident that Korean enterprises would continue to expand their investment into Vietnam as Vietnam continues to make efforts to improve investment environment for foreigners as well as its nationals.

3. Vietnam highly appreciated the support of the Republic of Korea to the Vietnam''''s economic development cause, particularly the latter''''s ODA and EDCF to implement some projects on socio-economic infrasturucture in the past years.  Can you say something about some big projects and the Korean helps in the future?

  ㅇ The Korean government, selecting Vietnam as one of the top priority countries to further advance the comprehensive partnership between the two countries, has been continuously expanding its ODA(grant aid and soft loans) to Vietnam, corresponding with the Vietnam''''s national development strategy and based on the Korea''''s comparative strengths.

 ㅇ KOICA(Korean International Cooperation Agency)''''s grant aid to Vietnam from 1991 until 2006 totalled 67.3 million USD with focus on such sectors as education, health, IT, etc., and Korea is now supporting the two large-scale projects in education and health sectors to promote the social development in the central region, one of the most under-developed region in Vietnam.

   - The project for the establishment of Korea-Vietnam Friendship IT College in Da Nang, which amounts to  10 million USD grant aid will be complete in the second half of this year and the college is scheduled to open in October 2007.

   - The project for the establishment of a Central General Hospital in Quang Nam Province which amounts to 35 million USD grant aid, the biggest in the history of our grant aid will be complete in 2009.

  ㅇ Moreover, the assistance through EDCF(Economic Development Cooperation Fund: soft loan) is expected to scale up, currently standing at 150 million USD annually from 2006 to 2009. So far, EDCF has supported relatively small projects but Korea plans to identify and proceed with large-scaled, and symbolic projects. Therefore, EDCF is now developing the Greater Mekong Subregion(GMS) Southern Costal Corridor Project with ADB, to which more than 150 million USD will be extended by EDCF, having significance as not only the first regional development project but also the first more than 100 million USD project.

4. In a talk between Prime Minister Phan Van Khai and Prime Minister Lee Hae Chan in 2005, the two leaders stressed to make all efforts to double the trade turn-over of the year 2010, compared to the year 2005, concurrently, reducing the trade gap by the way that Korea would import rice and agricultural products from Vietnam periodically.  Now, what is the progress of this issue?

  ㅇ Two way trade between Korea and Vietnam has increased by 10 times over the past 15 years and Korea became 7th largest trade partner of Vietnam last year. Over the recent six years, the two way trade has increased by more than 16% per year on average.  If Korea and Vietnam can keep this increasing rate in the coming years, it would not be difficult for us to meet the target of doubling the trade volume of 2005 in 2010. 

  ㅇ I believe the accession of Vietnam to WTO and the coming into effect of the Korea-ASEAN FTA on trade in goods this year would help boost trade relations between Korea and Vietnam.  On the other hand, Korea and Vietnam will continue to closely consult each other to reduce the gap in trade, which is mainly caused by the difference of the industrial structure of two countries and trade pattern related to Korean investments into Vietnam.

5. What do you think/assess the economy of Vietnam and Vietnamese Government efforts to development the economy?  What advantages should Vietnam uphold and adjust to develop the economy?

  ㅇ I think Vietnam is viewed as one of the most promising emerging markets not only in this region but also in the world on the basis of the rapid economic growth it has achieved and its potential to further develop in the future. 

  ㅇ The Vietnamese government and people are making great efforts to develop the economy and enhance living conditions while opening up and incorporating its economy into the international economy.  From my point of view, Vietnam needs to take this advantage as much as possible to sustainably develop its economy by way of actively implementing WTO commitments and government policy of reform in all sectors.