A lot of room for growth in the potential for Vietnam - Rok financial cooperation

The delegation of the Ministry of Finance led by Minister Ho Duc Phoc had a working session with the RoK’s Deputy Prime Minister and Minister of Economy and Finance Choi Sang Mok.

At the meeting, Deputy Prime Minister Choi Sang Mok spoke to welcome Minister Ho Duc Phoc and the delegation to work in the RoK this time. Deputy Prime Minister Choi Sang-mok also sent congratulations to the delegation for successfully organizing the Investment Promotion Conference in Korea on March 7.

Speaking at the meeting, Deputy Prime Minister Choi Sang-mok emphasized that Vietnam and Korea are each other's leading trading partners. Korea is the number one foreign direct investment country in Vietnam, making Vietnam a key economic partner for Korea in Southeast Asia.

He also emphasized that the two countries need to strengthen the expansion of areas of cooperation and investment based on the strategic agreements that the leaders of the two countries have made, as well as promote the implementation of agreements in trade expansion area; increase investment; promote supply chain development and technology and human resources cooperation.

Deputy Prime Minister Choi Sang-mok said that Korea wants to promote quick implementation of the agreement on capital support through the Economic Development Co-operation Fund (EDCF) and the Korean Economic Development Promotion Fund (EDPF) worth US$4 billion. In particular, it is necessary to strengthen cooperation in areas where Vietnam has needs and Korea has strengths.

In the new situation, the cooperative relationship between the two countries needs to be strengthened for mutual benefits. Vietnam should create a favorable environment for Korean businesses to invest and operate effectively, successfully and sustainably in Vietnam.

The Deputy Prime Minister said that Vietnam has great potential for growth. Last year, the leaders of the two governments also expressed their desire to further develop economic relations between the two parties.

“Korea is a large investor in Vietnam, but that is not enough, we need to promote investment more for mutual benefits. We need to increase cooperation efficiency in infrastructure, logistics, digital currency, virtual currency. Korea wants to import the "dynamism" of Vietnam's economy," the Korean Deputy Prime Minister emphasized.

On the Vietnamese side, Minister Ho Duc Phoc also expressed his gratitude to the Deputy Prime Minister and the Korean Ministry of Economy and Finance for taking the time to welcome and work with the delegation; and told the Korean Deputy Prime Minister about the economic situation in general and the state budget financial management in particular in Vietnam.

The Minister affirmed that Vietnam and South Korea have upgraded their relationship to a comprehensive strategic partnership from December 2022. This is a big milestone in the cooperation between the two parties. Vietnam highly values Korea as a strategic cooperation partner in all fields, especially economics, trade and investment.

Until December 2023, Korea has invested in Vietnam with a registered capital of nearly US$86 billion. Regarding trade, Korea is always in the group of Vietnam's largest trading partners.

Besides, Vietnam is also the top priority partner to which Korea provides ODA (about 20% of Korea's total aid). Korea is Vietnam's second largest Asian bilateral donor.

To date, the Ministry of Finance of Vietnam and the Export-Import Bank of Korea (Kexim) have signed 64 loan agreements with a total funding value of US$2.8 billion in many fields, focusing on transportation, health, environmental sanitation.

In the context that the two sides have signed framework agreements with a total pledged capital of up to US$4 billion, Minister Ho Duc Phoc proposes the Korean side to coordinate with the Ministry of Finance and relevant Vietnamese agencies in boosting implementation of new projects funded by this capital source, especially EDPF capital.

Deputy Prime Minister and Minister of Finance of Korea Choi Sang Mok (left) and Minister of Finance Ho Duc Phoc.

According to the Minister, the potential for economic and trade cooperation between Vietnam and Korea still has a lot of room for growth, especially after the two countries upgraded their bilateral relationship to the Comprehensive Strategic Partnership.

Specifically, the Minister said, in terms of infrastructure, Vietnam is prioritizing investment development such as highways, seaports... especially high-speed railway projects with an estimated capital of US$67 billion.

According to the plan, this project's investment policy will be completed by 2024; and the construction will start in 2027. Therefore, besides attracting ODA capital, Vietnam also attracts construction contractors.

The Minister expressed his hope that Korea will pay attention and support Vietnam in the fields of circular economy, green energy, infrastructure, business cooperation, carbon certificates, green bonds, and digital currency. This is Vietnam's development orientation.

“Currently, Vietnam's public debt only accounts for 37 of 60% of GDP. We want to promote this advantage in infrastructure investment, promote ODA cooperation, and support businesses from both sides to invest in projects," the Minister emphasized.

The Minister also said that the Ministry of Finance has continued to review to amend, supplement and issue new financial and tax policies in accordance with the actual situation, especially solutions on extension, exemption and reduction of taxes, fees, charges; supported production and business development, promoting growth and implementing integration commitments.

At the meeting, Minister Ho Duc Phoc respectfully invited Deputy Prime Minister Choi Sang Mok to visit the Ministry of Finance of Vietnam in the near future; expected to jointly hold a dialogue conference with Korean businesses in Vietnam.