Vietnam – Russia: Aiming to Raise Bilateral Trade Turnover to US$10Bln

Russian President Dmitry Medvedev and Vietnamese President Nguyen Minh Triet hosted a meeting with more than 100 leading business representatives at the Vietnam – Russia Business Forum held by the Vietnam Chamber of Commerce and Industry (VCCI) as the Russian President attended the 17th ASEAN Summit in Vietnam.

At the forum, President Medvedev praised the effective bilateral cooperation in energy, expressing his pleasure at the signing of an intergovernmental cooperation agreement on building a nuclear power plant in Vietnam and starting oil production at the Vietnam-Russia joint venture Rusvietpetro at Russia’s Neneski oilfield.

The two leaders also pledged to create favourable conditions for Vietnamese and Russian joint ventures and other companies to do business. However, the two heads of state noted that economic, commercial and investment cooperation must increase to meet its potential and the aspirations of both parties to fulfil their status as strategic partners. Therefore, Vietnam and Russia need to speed up the finalization of the free trade area between the two countries and other countries in the tariff alliance, and put the Vietnam – Russia Investment Fund into operation to facilitate two-way trade and investment promotion, aiming to raise bilateral trade turnover to US$3 billion in 2012 and to US$10 billion by 2020. At the same time, the two sides urgently need to reach consensus on measures to implement the major energy cooperation projects already signed.

VCCI President Vu Tien Loc considered this forum an occasion to accelerate economic and trade relations between Vietnam and Russia, and a good opportunity to promote better understanding between the two nations’ business communities.

Russia is currently an important trade partner of Vietnam, particularly in energy investment cooperation.

Two-way trade revenue has grown strongly from only US$350-400 million in the 1990s to US$1.64 billion in 2008 and US$1.83 billion in 2009. Vietnam’s main exports to Russia include seafood, apparel, rubber and footwear, while its main imports from the European nation are coal, steel, steel ingots, fertiliser and petroleum.

On investment, Russia currently has 55 projects with a total registered investment capital of US$302.9 million, ranking 23rd among 81 countries and territories investing in Vietnam. Meanwhile, the Southeast Asian nation has 11 investment projects worth US$34 million in Russia. In particular, oil, gas and energy are traditional fields of cooperation that remain highly effective and generate a large source of income for both nations.

In October 2008, the two sides signed a protocol to transform the Vietsovpetro oil and gas joint venture into a two-member limited liability company after 2010. Russian gas group Gazprom and Russian overseas petroleum group Zarubezneft are advancing their cooperation with the Vietnam National Oil and Gas Group (PetroVietnam). The two sides also set up new joint ventures like Vietgazprom, Rusvietpetro and Gazpromviet to expand oil and gas cooperation, operating not only in Vietnam and Russia, but also in third countries. Russia continues cooperating with Vietnam in modernising and developing new energy projects in the Southeast Asian nation. Under an agreement reached during Vietnamese Prime Minister Nguyen Tan Dung’s working visit to Russia in December 2009, Russia would build the first nuclear power plant in Vietnam.

At the forum, the General Director of Rosatom Nuclear Energy State Corporation (Rosatom) pledged to complete the first two nuclear complexes on time. “Vietnam is a pioneer among Southeast Asian nations in developing nuclear energy and we will work with Electricity of Vietnam to build appropriate infrastructure to develop nuclear energy technology in Vietnam,” said the Rosatom executive.

Dr Vu Tien Loc said VCCI would be a bridge linking the Vietnamese and Russian business communities. The Vietnamese government and business community will always create favourable conditions for Russian companies to invest and do business in Vietnam, aiming to boost economic cooperation under the traditional friendly relations, comprehensive partnership, expectations of state leaders and cooperation potential of the two countries.

After finishing high-level talks and witnessing the signing of bilateral cooperation agreements, President Dmitry Medvedev and President Nguyen Minh Triet visited the Bank for Investment and Development of Vietnam (BIDV). On this occasion, BIDV and the Russian Bank VTB signed a cooperation agreement on the formation of the Vietnam – Russia Investment Fund.

BIDV and VTB will set up a bilateral working group to build the fund formation plan and build an effective and professional fund management company. To date, preparation for establishing the investment fund has basically been completed. This US$500 million fund will focus on Vietnam’s electricity, water, energy, metal, mining, infrastructure, chemical, environment, transportation, consumer goods and telecom sectors. Its first phase, to be launched at the end of 2011, plans to raise about US$100 million. The fund will offer investment opportunities to Russian, Japanese, South Korean and Middle Eastern investors. – VCCI

Tags: Vietnam Russia trade