Bridging Information Gap between Vietnamese & Thai Businesses

The economic relationship between Vietnam and Thailand will grow much stronger in the next few years because of the complementarity in many areas, especially, in the manufacturing and services sectors. 

With the completion of the East West Corridor under the Greater Mekong Subregion (GMS), Vietnam and Thailand will be linked together with many road and rail infrastructure. The cost of doing business between the two countries will be reduced through many initiatives under the ASEAN Economic Community Blueprint which aim at facilitating trade and investment among ASEAN Member Countries. 

 

The purpose of visiting Vietnam Chamber of Commerce and Industry (VCCI) is to ensure better coordination of business community in Vietnam and Thailand in taking advantage of these opportunities. 

 

Although Thailand stands at only number 10 of investor in Vietnam in terms of volume, but there is a large varieties of investment by the medium size businessmen from Thailand. Investment ranges from food processing, automotive parts, construction, real estate, tourism and medical services. This is because, like in Vietnam, majority of business enterprises in Thailand are of small and medium size. 

 

I feel that this is where ASEAN Economic Community (AEC 2015) will be built – from the investment of many SMEs from each country, not only from the large operator, which may or may not be from ASEAN countries. 

 

In general, Thailand is about to take-off in its economic development. Thailand will need to import many raw materials and inputs from countries like Vietnam. For example, the agro-industry is growing rapidly and needs to import agricultural products from Vietnam for processing for consumption and export. This offers a good opportunity for Vietnam products. However, the story of business usually does not stop at only buying and selling. With more familiarity with the market, the exporter from Vietnam will naturally look for investment opportunity both in Thailand and also in Vietnam to expand its business. 

 

Five years from now, I can see a large number of small and medium operator from Vietnam invest in Thailand as more small and medium investors from Thailand investing in Vietnam. 

 

Looking for a partner that you feel comfortable to work with, keeping in mind the longer term business relations. 

 

Where to look?

Thai government has many agencies in Vietnam that can introduce the interested party from Vietnam to these enterprises. The Vietnam-Thailand Business Association can also be a place to look for advice on potential partners.

 

There are also a large number of private consulting companies that can help to match the business partner from the two countries. 

 

Thai government organizes many trade and investment events for different industries and products around the year. By visiting the event (on the industry you are interested) you will get to see the operator in those industry and talk to them directly.

 

Making use of benefit from ASEAN – AFTA, other ASEAN FTAs and other privileges, such as investment

There are many FTAs that ASEAN has with others countries, especially, China, Japan, Korea, India, and Australia. Exporters should look very carefully at these potential benefits and understand the process to obtain the concession, especially, the rules of origin.

 

Looking beyond Vietnam and Thailand – joint activity in other ASEAN countries and joint activity in non-ASEAN countries

With globalization, the market goes far beyond just ASEAN. The major benefit of the EAST-WEST Economic Corridor lies beyond ASEAN. The potential markets are China and India, which need foods and other materials to sustain their economic development. 

 

In the next five years, there will be many infrastructure projects which will open up many business opportunities. The construction services and construction materials will be directly stimulated by the building of infrastructure. Once the road and infrastructure is completed, tourism, manufacturing and other businesses will be set up along the road. The construction work will move to build, hotel, houses, shops, etc. With people moving to settle around the town and urban areas, services such as retailers, repair services, health care, financial and insurance services will follow. 

 

Based on this dynamic pattern, many business opportunities for Vietnam and Thai business enterprise will emerge. 

 

The economic cooperation in ASEAN, including the East West Economic Corridor, will create a lot of opportunities for Vietnam and Thai business. Currently there is no concrete business plan how to make use of these opportunities. VCCI can play an important role in stimulating this interest in various sectors. At the same time, Thai business from various sectors should also do the same thing. Currently, there is an information gap from both sides: what does Vietnam business want from Thailand and what does Thai business want from Vietnam. 

 

In order to close this gap, my proposal is that VCCI come up with proposals from various business associations on what they want to do and the business associations from the Board of Trade from Thailand also come up with business proposal for Vietnam businessman. From these proposals, a business match making exercise can be done, on a sector by sector basis.