Encouraging Indonesian businesses to invest in Vietnam in new fields

The Prime Minister affirmed that Vietnam always welcomes Indonesian businesses to invest in the banking and financial sectors - *Photo: VGP/Nhat Bac*

The meeting was attended by representatives of the ASEAN Business Advisory Council (ASEAN ABAC) 2023, the Vietnam Federation of Commerce and Industry (VCCI), and a number of Vietnamese enterprises, to discuss solutions to promote business and investment relations between Indonesia and Vietnam.

Indonesia is currently Vietnam's third largest trading partner, while Vietnam is Indonesia's fourth largest trading partner in the region. Two-way trade turnover in 2022 reached 14.1 billion USD (of which exports from Indonesia to Vietnam increased by 26.8%; exports from Vietnam to Indonesia increased by 15.7%). In the first 7 months of the year, two-way trade reached 7.9 billion USD.

Regarding investment, as of June 20, 2023, Indonesia has 113 valid projects with a total investment capital of 645.8 million USD, ranking 29th out of 143 countries and territories investing in Vietnam and 5th in the ASEAN region. Many Indonesian corporations are successfully doing business and investing in Vietnam such as Ciputra, Traveloka, Gojek, etc.

For its part, in the general context of the regional and international economy , although the Vietnamese economy still faces some difficulties, overall it still maintains its growth momentum. The macro economy continues to be stable, inflation is under control, major balances of the economy are ensured, public debt, government debt, and foreign debt are well controlled.

Vietnam has become one of the 40 largest economies in the world, in the top 25 trading countries; ranked 32nd in the top 100 strongest national brand values in the world, with a high brand growth rate. Vietnam has signed 16 FTAs with over 60 major markets; is continuing to promote negotiations to upgrade a number of FTAs with partners.

In the first 8 months of 2023, Vietnam's trade balance of goods had a trade surplus of 20.19 billion USD. Vietnam is an attractive destination with more than 37,000 FDI projects in operation, with a total investment capital of over 446 billion USD. In the first 8 months of 2023, newly registered FDI capital reached 18.15 billion USD, up 8.2% over the same period, demonstrating foreign investors' confidence in Vietnam.

At the meeting, Indonesian businesses spoke about the potential for cooperation between businesses of the two countries; reported on achievements and results of operations in Vietnam, short-term and long-term plans; made proposals and recommendations for cooperation, especially in the fields of finance, banking, electric vehicles, renewable energy, mineral exploitation such as rare earth, housing for low-income people, agriculture, rice and rubber trade, carbon credit trading, etc.

Responding to comments, Prime Minister Pham Minh Chinh assessed that after nearly 70 years of establishing diplomatic relations (1955-2025) and 10 years of establishing the Strategic Partnership framework (2013-2023), the Vietnam-Indonesia relationship has continuously developed strongly; in which economic, investment and trade cooperation occupies an important position and is always promoted. The two countries are also aiming to elevate their relationship, which is an important foundation for businesses of the two countries to promote trade and investment cooperation.

Vietnam promotes attracting and has policies to encourage and promote projects in the fields of high technology, innovation, research and development; projects to facilitate Vietnamese enterprises to participate in the value chain; projects to promote digital economy, green economy, circular economy, sharing economy, sustainable development; strategic infrastructure development projects...

The Prime Minister affirmed that Vietnam always welcomes Indonesian businesses to invest in the banking and finance sector, which is a field with a lot of room for the two sides to cooperate and share experiences, especially in developing smart finance.

The Prime Minister also said that Vietnam is aiming for zero net emissions by 2050, including policies to encourage the development of an electric vehicle ecosystem; proposed that the two sides cooperate effectively in exploiting minerals serving green development such as producing electric vehicle batteries, as well as cooperating in selling carbon credits.

Regarding the real estate market, the Prime Minister said that Vietnam is facing an imbalance in supply and demand, especially a lack of social housing and housing for low-income people. He hopes that Indonesian enterprises investing in Vietnam will promote social responsibility, increase investment in housing development for middle-income and low-income people, and work together to "leave no one behind".

Regarding agriculture, the Prime Minister said that the two countries need to have agreements in areas such as rice and rubber supply so that the two countries can cooperate stably and proactively in terms of supply, products, etc. with market prices on the basis of harmonious benefits and shared risks.

The Prime Minister suggested that VCCI and KADIN need to coordinate more closely and effectively in connecting and promoting businesses of the two countries to cooperate in investment and business more effectively, saving costs and time.

In the spirit of "harmonious benefits and shared risks", the Vietnamese Government always accompanies, listens, shares, supports and creates favorable conditions for foreign investors in general and Indonesian investors in particular to deploy successful, sustainable and long-term investment and business activities in Vietnam.

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