Vietnam’s ambassador to Russia Bui Dinh Dinh speak with VIR’s Chau Ba about prospects for trade and investment cooperation between the two countries.

You said Russia was a potential export market for Vietnamese goods. Could you name some specific commodities that Vietnam can boost exports of and advantages Vietnamese exporters can take from this market?

Vietnam and Russia have a special traditional friendship. Since the establishment of diplomatic ties nearly 60 years ago (January 30, 1950), the two nations have always supported each other, particularly during the national liberation war and post-war national construction. The people of Vietnam have received great support from the people of the former Soviet Union and the present Russian Federation.

Currently, relations between Vietnam and Russia are at the strategic partnership and comprehensive cooperation level, in which cooperation on economics, trade and investment is a very important component.

With a population of roughly 142 million and a per capita income of $14,000 per year and total import spending of $293 billion in 2008, Russia is a potential market for Vietnamese exports.

Russian exports to Vietnam [mainly petroleum, machines, steel, fertiliser, and paper] and Vietnamese exports to Russia [mainly agro-forestry-fishery products, light industrial products]complement one another. The Russian market is in need of goods such as aquatic products, seafood, apparel, handicrafts and fine arts, woodwork, electric utensils and more. In addition, there is a good opportunity for Vietnam to ship ceramics, sanitary wares, plastic products and oriental medicines to Russia.

According to Russia’s General Department of Customs, despite the negative effects from the global economic and financial crisis, in the first eight months of 2009, in order to meet the domestic consumption demand, Russia imported $2.4 billion in apparel, $862 million in footwear, $902 million in woodwork, $841 million in fish, $290 million in tea and $150 million in coffee. Vietnam’s products accounted for some of the market share, but the value was still very modest.

The Russian market has great potential, with diversified demand for goods serving consumers with different income levels. These are big advantages for Vietnamese exports to Russia. One more great advantage is that high-ranking leaders of the two countries always take interest in accelerating the development of bilateral economic, trade and investment relations in order to reach the strategic level of the political relations.

The medium-term action roadmap in the fields of trade and investment until 2012 was approved by both nations at the Inter-governmental Committee’s meeting held in Hanoi on September 19-21, 2009. Under this roadmap, the two sides will implement cooperation plans in specific fields including measures to boost exports of agro-forestry-fishery products to Russia, as well as to raise the possibility of setting up joint ventures to process these commodities.

In the middle of December, 2009, Prime Minister Nguyen Tan Dung paid a visit to Russia. Accordingly, the Vietnamese leader and his Russian counterpart discussed and agreed on specific measures to further promote the efficiency of economic, trade and investment cooperation between the two nations.

How do you assess the prospects of Vietnam-Russia trade in 2009 and the possibility of $3 billion in turnover in 2010?

International trade was reduced by 12 per cent in 2009 due to the world economic crisis. Russia and Vietnam were also affected by the slump. According to Russia’s General Department of Customs, in the first nine months of 2009, trade between Russia and other countries dropped 44 per cent to more than $321 billion, while Russia-Vietnam trade increased by 4.1 per cent on-year to $1.116 billion. Of which, Russia exported $660.6 million to Vietnam, up 38 per cent, and Vietnam exported $500.6 million to Russia, down 21 per cent.

According to Vietnam’s customs figures, in the first 10 months of 2009, Vietnam-Russia trade turnover reached $1.52 billion, up 6.5 per cent as compared with 2008. Of which, Vietnam’s exports to Russia were down 38 per cent to $347 million and Russia’s shipments to Vietnam rose by 37 per cent to $1.172 billion.

Thus, according to both sources, Vietnamese shipments to Russia fell considerably because fish and fish products - Vietnam’s key exports to Russia, were temporarily suspended from being imported into Russia between late December, 2008 and late April, 2009.

Over the past years, Vietnam-Russia trade has recorded significant breakthrough, fetching over $1.64 billion in 2008, up 62 per cent on-year. In 2009, despite a number of difficulties and disadvantages, as mentioned above, the value was forecast to be equal to or surpass 2008’s figures.

The target of $3 billion in bilateral trade in 2010 is within reach, as the world, Vietnam and Russia are all recovering from the recession. There is also the implementation of economic and trade cooperation through 2012, and the active implementation of economic and trade cooperation agreements signed between the two countries during Dung’s visit.

However, with a view to narrow Vietnam’s increasing trade gap with Russia, Vietnamese enterprises must diversify exports, seek more new commodities, improve product quality, closely abide by food safety and hygiene standards for agro-forestry-fishery products and find new ways to cooperate.

Could you share your views on investment opportunities for Vietnamese businesses in Russia?

In regards to Vietnam-Russia economic, trade and investment cooperation, investments in both countries is really potential. In general, Russia’s Law on Investment is open and non-discriminatory to foreign investors. Vietnam’s Investment Law is also widely open. The thing here is that Vietnamese and Russian businesses must find fields and projects of the same concern and bringing in mutual benefits.

Vietnamese enterprises can join hands with Russian partners in some areas such as construction of bridges and ports, mining and machinery manufacturing to take advantage of Russian capital resources and new technologies.

Vietnamese companies can invest in Russia in the fields of agro-forestry-fishery processing, as well as small and medium-sized consumer goods production like apparel, footwear and woodwork to directly distribute to the Russian market.

VietNamNet/VIR