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NIKKEI ASIAN REVIEW
Vietnam courts North Korean officials for pole position on trade Pyongyang
delegation toured factories and smart farms during Trump-Kim summit HO CHI MINH CITY --
Vietnamese companies remain eager to do business in North Korea should
international sanctions be lifted, positioning themselves to lead the
way into one of Asia's last undeveloped markets. While last week's
U.S.-North Korea summit failed to produce a political breakthrough, some
of the biggest corporations in the fast-growing Southeast Asian economy
received guests from Pyongyang in parallel with the talks in Hanoi. Vingroup, the country's
leading private conglomerate, showed a North Korean delegation led by
Workers' Party senior official Ri Su Yong around its factories and
high-tech farms in Haiphong, the second-largest city in northern
Vietnam, on Feb. 27, a company staff who organized the tour told the
Nikkei Asian Review. "Members of the
delegation showed interest in our products, especially eco-vegetables,"
said the staff, who requested anonymity. The tour went on while U.S.
President Donald Trump met with North Korean leader Kim Jong Un. VinFast Production and
Trading, a group manufacturing subsidiary, operates an electric scooter
factory in Haiphong. VinEco, the group's agricultural unit, also runs
greenhouses in Haiphong to grow bean sprouts, herbs, vegetables, fruits
and mushrooms. State-owned Viettel, the
country's largest telecom company, also received delegates from
Pyongyang. North Korea's Ri, who
serves as vice chairman of the Workers' Party Central Committee and head
of international affairs, said during the visit that Pyongyang is
interested in telecommunications equipment for smart communities, and
hopes for further cooperation soon, according to a March 1 statement by
Viettel. CEO Le Dang Dung said
earlier this year that Viettel had first sought approval from North
Korea to build a mobile network in 2010, according to Reuters. But now
the military-backed company is "waiting for sanctions to be lifted and
the country to open its market to foreign investors." These one-party
socialist states have diverged in their economic development since the
Vietnam War. Vietnam now has two stock markets and continues taking
steps to open up to foreign investment, while North Korea remains
shackled by international sanctions imposed in response to its nuclear
weapons program. "Vietnamese companies
are interested in doing business in North Korea, and they are preparing
to enter the country when Pyongyang opens its market," Le Dang Doanh, a
former member of the United Nations Committee for Development Policy,
told the Nikkei Asian Review. As the former president
of Vietnam's Central Institute for Economic Management, Doanh presented
the country's economic model to North Korean teams that paid unofficial
visits to Vietnam before the summit. He said Vietnamese
companies acknowledge they would have to compete against rivals from
other countries including China, South Korea and Russia, who are waiting
for reforms and a clear legal framework for foreign investors from the
North Korean government. "But that is unlikely to
happen anytime soon unless all the sanctions against Pyongyang are
lifted by the U.S.," Doanh said. As Vietnam is a member of the World
Trade Organization and the United Nations, Hanoi must comply with
resolutions on North Korea from these international bodies, he added. Experts said Vietnamese
companies also can seek opportunities in sectors including
infrastructure, real estate and tourism, as well as investment into
consumer goods factories, generating employment in North Korea. Vietnam and North Korea
share a long history through the friendship between the respective
ruling parties. With the similar political regimes and theories, the
peers were once defined as "fellow socialist powers" beside China. Relations between North
Korea and Vietnam have ebbed and flowed over the past 60 years, but
Pyongyang and Hanoi still view each other as "traditional friends."
Vietnamese Prime Minister Nguyen Xuan Phuc reaffirmed this when meeting
with North Korea's Kim on March 1. Kim became the first North Korean
leader since his grandfather Kim Il Sung to make an official visit to
Vietnam. While complying with
international sanctions in the wake of Pyongyang's nuclear tests and
missile launches, Hanoi has consistently supported a dialogue-based
solution to the North Korean nuclear standoff. Vietnam exported
$579,000 worth of goods to North Korea in 2018, including confectionery
products, wood products and medicines, according to government
statistics. Trade between Vietnam
and North Korea largely depends on barter. Vietnam stopped importing
North Korean products in 2011 in response to U.N. sanctions, but
continues to export consumer goods to the market. Trade between the two
countries peaked at $15 million in 2012. (Nikkei) |