VietNamNet Bridge – Japan is the biggest ODA bilateral donor, the second biggest foreign direct investor and the fourth biggest export market for Vietnam. However, this does not mean that the Japanese crisis will only negatively impact upon Vietnam’s economy.
No Japanese partner has canceled orders
With the “double catastrophes” – tsunami and nuclear crisis – occurring in Japan, experts have warned that they will have a major impact on Vietnam’s national economy, since Vietnam will lose a big donor, Japanese investors will cancel plans to invest in Vietnam to focus on some of their projects, and Vietnam’s exports to Japan will decrease when Japanese have to tighten their belt.
Japan is now the fourth biggest export market for Vietnam, behind the US, EU and ASEAN. In 2010, Vietnam exported $7.73 billion worth of products to the country, which is equal to 10.7 percent of the total export turnover. In the first two months of 2011 alone, Vietnam exported $1.2 billion worth of goods. Meanwhile, Vietnam imported $8.1 billion worth of products from the market, accounting for 11.3 percent of total import turnover.
With such high figures, a local newspaper has warned that Vietnamese exports would be “rocked” on the tsunami.
However, Vietnamese exporters are more composed than reports would suggest. Nguyen Huu Dung, Deputy Chair of the Vietnam Association of Seafood Exporters and Producers VASEP, said to date seafood exporters have not received any notices on canceling contracts from the Japanese partners. “At this moment, what we should do is to send letters of condolence to them,” Dung said.
Tuan, Director of Casumina, a tyre producer, also told VietNamNet’s Vietnam Economic Forum that the catastrophe in Japan would not overly affect Casumina’s trade with Japan. The company plans to export nearly three million dollar worth of rubber-made products, serving the automobile manufacturing, to Japan this year.
Bui Huy Son, Director of the Asia-Pacific Department under the Ministry of Industry and Trade, said that Japan is a key market for Vietnam and that the crisis in Japan will certainly have an impact upon Vietnam. However, he said it is too early to say how major the impact would be, and the ministry would only be able to update the information in one or two weeks.
Japanese reconstruction may be an opportunity for Vietnam
Dr Le Dang Doanh, a well-known economist, said that the Japanese economic crisis will certainly impact on global economies, including Vietnam. In the short term, the disbursement rate of ODA capital would be slower, while Japanese foreign direct investment would decrease. Besides, less Japanese people would travel to Vietnam.
Currently, Japan is providing 30 percent of the total ODA Vietnam receives from its donors. The Japanese Government has pledged the 1.76 billion dollar aid out of the total of 7.9 billion dollar given to Vietnam in 2011.
Japan is the fifth biggest foreign investor in Vietnam with $20.8 billion worth of foreign investment. In the first two months of the year, Japanese investors committed investment capital of 33.6 million, or 2.3 percent of the total foreign direct investment capital.
The number of Japanese travelers to Vietnam ranks third among the biggest tourism markets of Vietnam, just after China and South Korea. In 2010 alone, Vietnam received 442,000 Japanese travelers.
Ho Quang Minh, Director of the Foreign Economic Department under the Ministry of Planning and Investment, said that to date, the committed ODA projects or agreements have been running as scheduled. What the two sides have committed to is still being implemented.
Doanh asserted that the Japanese crisis will not only bring negative impacts to Vietnam, and that reconstruction in Japan would be the good opportunity for Vietnam. For example, Japan is seriously lacking food, rice and articles of daily necessity - things that Vietnam can provide.