Businesses from the Republic of Korea (RoK) are busy preparing to pour billions of US dollars into Vietnam in the hope of becoming one of its leading direct foreign investors.
Prime Minister Nguyen Tan Dung has encouraged foreign investment in long-term domestic projects. His recent speech at the 2013 Shangri-La Dialogue in Singapore has helped galvanise foreign businesses’ confidence in the Vietnamese market.
In an article on June 7, the Korea Herald praised PM Dung as one of Asia’s outstanding politicians, who has helped to bring the emerging economy out of the global economic crisis.
A number of international scholars also appreciated his efforts to build strategic trust as a key to maintaining peace and promoting development in the region.
Dung took office in the midst of the global economic crisis but managed well to maintain Vietnam’s economic growth rate at 8.23% in 2007, with export earnings rising 24% from two year earlier.
Vietnam then became the 150th member of the World Trade Organisation (WTO), and has established its Permanent Normal Trade Relations with the United States. More importantly, the country has enjoyed political stability and social security during Prime Minister Dung’s two terms in office.
The International Monetary Fund’s (IMF) latest report on macroeconomic performance and policy governance shows Vietnam’s financial sector has improved thanks to the State Bank’s liquidity provision and the merger of some small banks. The current account surplus has increased by over US$9 billion, partly due to a decline in imports that helps to maintain the hard currency reserves at a level almost three months worth of import value.
According to the IMF, Vietnam’s economic policy has proved successful to a certain extent as seen in ensuring macroeconomic stability, controlling inflation and increasing the value of the domestic currency.
After its recent successful operation of a US$1.5 billion smartphone project in Bac Ninh province, Samsung is investing an additional US$2 billion in a smartphone and high-tech manufacturing complex in Thai Nguyen province.
LG Electronics is also going ahead with a US$300 million electrical appliance and electronics project in Haiphong city.
Heasung Vina, a camera producer for Samsung smartphones, is committed to spending US$36 billion on raising its annual capacity to 25 million units.
Doosun Industries is expected to take part in Samsung’s support industry project soon after receiving an investment license for a US$14 million high-tech printing plant in Vietnam on May 14.
The Korean Chamber of Commerce (Korcham) Chairman is confident more companies are eyeing future Vietnam-based investment as Samsung’s and LG’s support industries continue to develop.