More Korean ODA for Vietnam

Currently, Korean ODA to Vietnam makes up 0.09 % of Korean GDP and will increase to 0.25 % in the near future. It is part of the strategic cooperation with Vietnam.

Bilateral relations have continued to improve ever since the establishment of diplomatic relations in 1992. The two-way trade value in 2008 was US$8.8 billion (double that of 2005) with US$1.78 million of Vietnamese export of agriculture-forestry-fisheries produce and handicraft products and US$7 billion worth of imported materials for industrial production and contractual products for export. Vietnam is not only an important economic partner but also a priority and example of “National assistance strategy” of the Republic of Korea. In the past years, Vietnam has been ranking first in the list of recipients of Korean ODA. In 1993-2008, Korea has provided Vietnam grant aid worth nearly US$90 million and soft loans of US$680 million. While ODA projects focused on education, health, public management, agriculture and rural development, industry, energy, environment. Since 2008, Korean grant aid was US$17.5 million. The two countries have signed a framework agreement in which Korea will provide soft loans to Vietnam in 2008-2011 on average of US$250 million a year.

At the Vietnam-Korea Business Forum in Hanoi last October, the Korean side promised to increase ODA for Vietnam from 0.09 to 0.25 % of Korean GDP. Speaking at the forum, Korean President Lee Myung Pak confirmed that Vietnam is different from other developing countries. While others are interested only in financial assistance, Vietnam is interested in the sharing of experiences from Korea and other countries. In the discussion with Vietnamese leaders, there are also many things that can be learned from Vietnam. Korea is still fighting with the past, while Vietnam is looking to the bright future with great confidence and resolve. Therefore, Vietnam will make fast progress, even faster than Korea.

In 2009, Korea ranks second in foreign investment in Vietnam with total investment capital of US$17.9 billion after only the US of US$23 billion. It is a bit different from 2001 when Korean investment was only US$60 million. In the coming years, Korean investments will be diversified and focused on manufacturing, mining, real estate and financing. It will be different from 1995 with 86 % of investments for manufacturing.. As a result, Korean companies will create 400,000 jobs in 2009, instead of 150,000 jobs in 2006, accounting for 24 % of jobs generated by foreign investments.

It is expected that with increased ODA from Korea – the 13^th biggest world economy, Vietnam – a dynamic and promising economy will make unprecedented progress and join with other economies of the world.

Korean government plans to increase ODA three times in 2015 to assist less developed countries. Korea gives high priority to ODA and its efficiency. Presently, Korean ODA is worth US$1 billion, three times that of 2000. Besides ODA, Korea is playing a crucial part in the establishment of East Asia Climate Partnership Fund valued at US$200 million to help developing countries fight climate change in the next five years.

Posted by VBN on Jan 5 2010. Filed under Int'l Cooperation. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry