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Positive sentiments

Released at: 09:53, 14/06/2017

Positive sentiments

Photo: Japanese Embassy in Hanoi

As Prime Minister Nguyen Xuan Phuc visits Japan, H.E. Umeda Kunio, Japanese Ambassador to Vietnam, shares with VET’S Ha Anh about the two countries’ bilateral cooperation to date.

by Ha Anh

How do you view bilateral economic cooperation between Vietnam and Japan over recent years?

The economic relationship has been steadily expanding, deepening mutual dependence. Vietnam is home to 2,500 Japanese companies, ranking it third among ASEAN countries, after Thailand and Singapore. In terms of membership of Japanese Business Associations in Vietnam, the number has surpassed 1,600, a 60 per cent increase within the last five years.

The number of Vietnamese people living in Japan has increased to 200,000, an increase of 4.5-fold in the last five years. Of these, the number of Vietnamese technical interns jumped seven-fold to 88,000, making the country lead by nationality and surpass Chinese technical interns. Vietnamese people in Japan make significant contributions to the Japanese economy, which is suffering from a labor shortage triggered by its aging population and diminishing birthrate.

The fact that the Japan National Tourism Organization (JNTO) and the Japan Student Services Organization (JASSO) opened offices in Hanoi this year is symbolic of the strengthening people exchanges between the two countries.

Since 1992, Japan, as the top ODA donor to Vietnam, has been cooperating in the fields of infrastructure development, human resources development, and improvements in Vietnam’s investment climate. Although we are concerned about some of the problems the Vietnamese Government is currently facing, such as rising public debt and delays in ODA disbursement, we continue to support its effort to develop the country from a viewpoint that stability and prosperity in Vietnam corresponds with Japan’s national interest.

Japan stands in second place in terms of registered foreign direct investment (FDI) in Vietnam. Some Japanese companies are interested in investing in the service sector, not just manufacturing, which still dominates. As a middle-income country, Vietnam will be able to attract further FDI from many countries, including Japan, as long as the Vietnamese Government continues to implement stable and predictable policies for the development of the domestic market. In this regard, I would like to stress that the Vietnamese Government should proceed with further administrative reforms, including the simplification of administrative procedures, in order to attract small and medium-sized enterprises (SMEs) from Japan, and to develop support industries.

What outcomes can we expect from Prime Minister Nguyen Xuan Phuc’s visit to Japan?

Japan and Vietnam have positive sentiments towards each other and the mutual trust among leaders is solid. In addition, the two countries share strategic interests and are economically complementary. For Japan, Vietnam is one of the most trustworthy countries, and I hope that Vietnam feels likewise.

Japan would like to further strengthen the “extensive strategic partnership” between the two countries on the occasion of PM Phuc’s visit. More specifically, in addition to issues relating to peace and security in the region, such as North Korea and the East Sea, we are also preparing a number of cooperation programs in the areas of ODA projects, investment projects, human resources development, and education. We would like to have as many concrete results as possible. We would also like to take this opportunity to strengthen cultural and sports exchanges for the 45th anniversary of the establishment of diplomatic relations between Japan and Vietnam in 2018. 

What are the achievements in the Japan-Vietnam Joint Initiative to improve the business environment in Vietnam? What are the challenges in further improving Vietnam’s investment environment?

The Japan-Vietnam Joint Initiative to improve the business environment in Vietnam, which was launched in 2003, is now in its sixth phase. The Initiative has seen a range of successes. We are having a series of discussions with relevant ministries in seven areas, including labor, wages, and legal institutions in investment and corporate laws, and pharmaceutical imports, etc. In order to further improve the investment environment, we believe an urgent response is needed to the following two fundamental problems.
Firstly, it is necessary to establish a government structure that implements policy objectives. It is advisable that the Vietnamese Government improve the government structure to enable the steady implementation of policy objectives.

The second problem relates to business costs, so-called “informal fees” that occur in the process of completing administrative procedures. Such informal fees have a negative impact on the business environment and transparency in Vietnam and could be a factor impeding productivity increases in the country. Low salaries in the public sector could be a factor in this problem. In order for Vietnam to achieve substantial economic growth in the future, removing these costs is a necessary step. 

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