Vietnam - Japan Comprehensive Cooperation

At the ceremony, Mr Bui Quang Vinh, Minister of Planning and Investment, appreciated Japan’s pledged ODA loan as it would help Vietnam develop its important socioeconomic infrastructure like Da Nang - Quang Ninh section on North - South Highway (30 billion yen), infrastructure system for Lach Huyen Port in Hai Phong City (32.287 billion yen), bridges and roads in Lach Huyen Port (22.88 billion yen), and fourth-cycle climate change response programme (10 billion yen). The signing of the exchange of notes will be a common condition for the provision and use of ODA for the above four programmes and projects. Based on terms approved by the two governments, the Ministry of Finance of Vietnam and the Japan International Cooperation Agency (JICA) will sign specific loan agreements for each program or project.

Minister Vinh said, due to general difficulties in the world in 2014, Japan’s ODA for Vietnam fell to 100 billion yen. In the fiscal year 2015, the two governments agreed to raise its ODA commitments to a record high of 300 billion yen (with over 95 billion yen to be spent in the first round).

 

Japanese Ambassador to Vietnam Hiroshi Fukuda said Japan’s fiscal year 2015 started on April 1, 2015 and will end on March 31, 2016. In addition to credit pledges for the four above projects, the two sides will sign an agreement for three additional projects before the end of March 2016. He also stressed that the two sides will actively coordinate with each other to conclude the signing of credit pledge of over 300 billion yen. Since ODA granting was resumed in 1992, Japan has always given a big sum of ODA for Vietnam every year. With a more than 95 billion yen ODA loan pledged at the signing on January 15, Japan’s ODA commitments, both refundable and non-refundable, for Vietnam have reached some 2,600 billion yen.

 

Minister Bui Quang Vinh said the above ODA fund will have strong ripple effects and impacts on Vietnam’s upcoming socioeconomic development, especially in the fields that both nations are strong in, like agriculture, electronics, and infrastructure.

 

According to many economists, Japanese investors will likely seek investment opportunities in Vietnam’s agricultural sector. They will focus on supplying high-quality crops and stock, transferring technology, machinery and equipment, linking production with local businesses and farmers.

 

Mr Kosaburo Shimose, who is in charge of agricultural affairs at the Embassy of Japan in Vietnam, added that, in 2015, the governments of Vietnam and Japan approved “Vietnam - Japan medium and long-term vision in agricultural cooperation” policy under which both nations are committed to firmly carrying out the vision in five years (2015-2019) in Nghe An and Lam Dong provinces and Ho Chi Minh City with the aim of solving long-term problems of Vietnam's agricultural sector. According to many experts, the potential for bilateral cooperation in agriculture is very abundant and favourable for growth. For example in September 2015, Japan permitted the import of Vietnam's Cat Chu mango. Before that, a variety of vegetables (e.g. carrots, vegetables and spinach) and fruits (papaya, dragon fruit, aloe and tamarind) were allowed for import into the Japanese market.

 

Also in the agricultural trade promotion programme launched by the two countries, JETRO recently led more than 20 Japanese companies to seek investment opportunities and explore the market in Thai Binh, Ha Nam, Nghe An, Ho Chi Minh City, Can Tho, Lam Dong and other localities. After this visit, many Japanese companies have shaped their investment, cooperation and connectivity in agricultural production in Vietnam. They also saw that Vietnamese farmers are still focusing on output rather than quality. In animal husbandry, aquaculture and cultivation, antibiotic residues and pesticide residues are still found in end-products because of poor scientific application.

 

Speaking of Japan's advantages and potential in agricultural cooperation with Vietnam, Mr Hirotaka Yasuzumi, JETRO Director in Ho Chi Minh City, said that about 10 Japanese agricultural projects were licensed in Vietnam in 2015 and that he expected a strong growth in agricultural investment projects in the coming time. He said the past visit told Japanese investors about huge potential for broader and deeper agricultural cooperation. For example, Japanese companies can supply specialised equipment for enhancing crop and livestock productivity, fertilisers, seedlings, and technologies to Vietnamese farmers. And, they will consider and decide investment scales and they prefer cooperating with Vietnamese businesses and farmers to form specialised high-quality production areas where products are qualified for import into the Japanese market, he added.

 

Mr Tu Minh Thien, Director of the Management Board of the Agricultural Hi-tech Park of Ho Chi Minh City, said, to catch the wave of international investments, Ho Chi Minh City advocated expanding a fishery high-tech park in Can Gio district (90 ha), agricultural high-tech park in Binh Chanh district (150 - 180 ha) and horticulture high-tech zone in Cu Chi district (200 ha). The city also has issued many mechanisms and policies to support agricultural development, including land rent reduction, a 50-year tenure, 50 per cent support for infrastructure maintenance, credit support, import and export duty reduction, vocational training financing, and trade promotion and consulting services. These are clear opportunities for Japanese investors to seek business opportunities in Vietnam.