06:57 (GMT +7) - Monday 18/06/2018

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Mutually reinforcing

Released at: 10:41, 18/12/2017 Vietnam - South Korea Relationship

Mutually reinforcing

H.E. Lee Hyuk, Ambassador of the Republic of Korea (RoK) to Vietnam / Photo: Viet Tuan

H.E. Lee Hyuk, Ambassador of the Republic of Korea (RoK) to Vietnam, shared his thoughts with VET’s Thu Trang on the stellar relations between the RoK and Vietnam to date.

by Thu Trang

What is your view of relations between the RoK and Vietnam over the last 25 years?
This year marks the 25th anniversary of diplomatic relations between the RoK and Vietnam. Since the establishment of bilateral ties in 1992, our two countries have established a truly miraculous relationship across the board, including political, economic, development cooperation, culture, and people-to-people exchanges, drawing on our historical, cultural, and sentimental similarities.

The RoK can be seen as a model for Vietnam, having accomplished world-record economic growth in a short period of time. The project to establish the Vietnam - Korea Institute of Science and Technology (V-KIST), which is now on track, is the result of the mutual understanding of our two countries to replicate the RoK’s success story here in Vietnam. V-KIST will be the place for Vietnam and the RoK to conduct more cooperation in the field of science and technology. As such, our two nations have now become indispensable partners. 

What have been the achievements in bilateral relations between the RoK and Vietnam in terms of trade and investment?

The trade volume between our two countries has increased almost 100 times, from a mere $500 million in 1992 when we established diplomatic relations to over $50 billion as at October 2017. With the entry into force of the Korea-Vietnam Free Trade Agreement in 2015, our two countries have laid a solid foundation to further increase bilateral trade and investment and ultimately achieve our common goal of free trade. 

As the RoK’s fourth-largest trading partner and investment destination, Vietnam is now its biggest economic partner among the ten ASEAN countries. At the same time, the RoK is Vietnam’s top investor, second-largest ODA provider, and third-largest trading partner, becoming one of Vietnam’s leading partners. Furthermore, over 150,000 Vietnamese people are living in the RoK and about the same number of Koreans are living in Vietnam, which is helping to promote the bilateral friendship.

The RoK is already the largest investor in Vietnam. What sectors in Vietnam will be able to attract more foreign direct investment (FDI) from the country?

The RoK has been ranked the No. 1 investor in Vietnam since 2014. As at October 2017, total FDI from the RoK amounted to $57.1 billion and is expected to reach $60 billion by the end of this year. 

While the majority of investment has been focused on the manufacturing industry in the past, there has recently been a growing shift towards investment in high-tech areas. High-tech industry is expected to attract more investment from the RoK in the years to come, and it is hoped that more investment will go to high-tech agriculture, marketing, sales and distribution, and banking. 

The FTA is expected to see bilateral trade between the two countries reach $70 billion by 2020. What should the Vietnamese Government do to boost the development of the Vietnam-RoK economic partnership and bilateral trade?

There is no doubt that the FTA has been a powerful spur of sharp increases in our bilateral trade, which is cautiously forecast to hit the $60 billion mark this year. As such, the previously-agreed target of $70 billion by 2020 seems to be within reach. 

However, further effort needs to be exerted by both governments and private sectors alike to further boost the trade volume. The comparative advantage of an abundant low-wage workforce will lose its strength little by little, which in turn will bring about fiercer rivalry for FDI. In this regard, now seems to be the most opportune time to further improve the investment environment, expand overall infrastructure, and explore new trade items like consumer goods. 

How do you see trade ties between Vietnam and the RoK during the next five years?

The mutually reinforcing economic structure of our two countries made the hundred-fold increase in trade in just 25 years possible. In view of the ever-lasting bilateral friendship, going beyond mere economic interests, it is highly anticipated that the RoK and Vietnam will continue to remain indispensable trade partners. 

Vietnam is not simply an export destination for the RoK’s products but is also a true partner that jointly explores new markets in third countries. Many RoK companies are willing to cooperate with Vietnamese counterparts to enter into markets in the US and Europe as well as in other ASEAN areas. RoK investment is expected to contribute to the enhanced competitiveness of Vietnam’s manufacturing industry and thereby help Vietnamese export to increase greatly. 

What do you see as the milestones for diplomatic ties between the RoK and Vietnam over the last 25 years? 

RoK President Moon Jae-in sent a special diplomatic envoy to ASEAN member countries, including Vietnam, in May this year immediately after his inauguration. This is the first time an RoK President has sent a Special Envoy to ASEAN, a move demonstrating the government’s policy of treasuring ASEAN and Vietnam.

Our bilateral relationship began in 1992, in the spirit of moving towards the future while standing on the past. In less than 20 years, the relationship expanded to a “Comprehensive Cooperative Partnership” in 2001 and was then upgraded to a “Strategic Cooperative Partnership” in 2009.

Such rapid and remarkable development of bilateral ties did not happen overnight. Vietnamese leaders making a resolute decision to adopt the “doi moi” economic reform policy with the goal of restoring the war-torn nation, the Vietnamese Government being consistent with its supporting policies for FDI in Vietnam, and the Vietnamese people warmheartedly welcoming Korean people have all helped to bring about the relationship we share today.

While the last 25 years was a period during which our two countries saw an enormous expansion in the volume of economic cooperation, the next 25 years will be a period during which we will establish a long-term win-win relationship, with the RoK becoming Vietnam’s best partner in accomplishing its goal of becoming a “modernized and industrialized country”.

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