[Vietnamization] New Milestone for Cambodia and Vietnam Bilateral Trade

On April 2, Vietnam’s National Assembly swore in former security minister and police general Tran Dai Quang (in uniform) as its new president. Reuters

New Milestone for Cambodia and Vietnam Bilateral Trade

Khmer Times [CPP's mouthpiece in English] | 15 June 2016

The two-day official state visit to the Kingdom, that started yesterday, by Vietnam’s new President Tran Dai Quang marks a new milestone for bilateral trade and investment between the two close neighbors that would also have a multiplier effect of attracting overseas capital into the Kingdom, said a representative of Vietnamese businesses in Cambodia. 

Leng Rithy [a Vietnamese national with a Khmer name], a representative of the Vietnamese Investment Association in Cambodia and president of the Vietnam Rubber Group in Cambodia told Khmer Times that the state visit will further cement the strong commitment of Vietnamese investors and businesspeople in Cambodia. 

He said that Vietnam had been injecting billions of dollars in Cambodia over the last two decades mainly in the agro-industry sector, especially in rubber plantations [more open in past recent years forced by external information made public].

“The visit of our new president will further build the confidence of Vietnamese businesspeople to invest in Cambodia and this will have a multiplier effect, too, for other investors,” said Mr. Rithy who is a Vietnamese national. 

“The multiplier effect will be seen within the Asean Economic Community (AEC), as both Vietnam and Cambodia, as Asean members, expand their trade and investments,” he added.

Mr. Rithy said the investment flow from Vietnam to Cambodia will keep increasing in the years to come. “Our investment here [in Cambodia] complements both countries.”

According to official embassy figures, by 2020, total Vietnamese investment in Cambodia will reach $6 billion.  This will make Vietnam one of the biggest investing countries in the Kingdom.

Currently, Vietnam is ranked fifth in terms of total investment in the country after China, South Korea, the European Union and Malaysia.

On April 2, Vietnam’s National Assembly swore in former security minister and police general Tran Dai Quang as its new president. Quang, 59, was also a law professor.

Mr. Rithy said he hopes his new president, in talks with Prime Minister Hun Sen, will address the challenges of Vietnamese businesses operating in Cambodia to overcome current problems.

“I would like both leaders to prioritize discussions on how to provide better assistance to the agro-industry sector, especially the natural rubber industry which is reeling from the extreme climatic effects of El Nino,” he said. “Vietnam’s investment in the natural rubber industry is long-term and it is important to address these issues.”

The current prolonged El Nino has brought drought to Cambodia and this has a negative impact for the production of many commodities, especially rubber cultivation. In addition to that, the industry is also suffering from low global prices for natural rubber.

David Van, the managing director for Cambodia in Bower Group Asia, told Khmer Times that Vietnam-based operators in the hospitality industry were also keen to invest in the country but often their investments were outsized by others.

"Hospitality industry investments from Vietnam are outsized by neighbouring Thailand investments in the same sector, as more Thai-operated hotels and restaurants open here [in Cambodia] compared to Vietnamese-operated ones," he said.

Mr. Van said Mr. Hun Sen should seek investments in areas where the Vietnamese are familiar with, like agribusiness and the construction industry.

Meanwhile Chheang Vannarith, chairman of the Cambodian Institute for Strategic Studies (CISS) said that the visit shows that Vietnam’s foreign policy prioritizes the country’s relationship with its immediate neighbors.

He said that bilateral economic and trade ties, defense, security and cultural cooperation will be on the main agenda for discussion. 

“Vietnamese President Tran Dai Quang's visit to the Kingdom augurs well for the bilateral relationship between the two neighbors. Vietnam is trying to ensure that its smaller neighbors will not become the client states of China, which in turn threaten Vietnam's interests and security,” he added.