Photo credit: Bangkok Post
TRADE, ECONOMY, AND INVESTMENT
Laos and Vietnam sign nine agreements to enhance bilateral ties
(27 February 2019) Laos and Vietnam inked nine agreements to enhance bilateral relations during Vietnamese President Nguyen Phu Trong’s two-day state visit to Laos on February 24-25, on the invitation of Lao President Bounnhang Vorachit. The bilateral meeting in Vientiane culminated in the signing of nine agreements covering areas such as financial cooperation, construction of the Vientiane-Vung Ang railway, as well as electricity and mining development. Vietnam has thus far invested US$4.1 billion in 409 projects in Laos and is the third largest foreign investor in the country. Trade between the two countries reached US$1 billion in 2018, up 13% from 2017. Furthermore, Laos reaffirmed its support for Vietnam’s candidacy as a non-permanent member of the UN Security Council for the 2020-2021 tenure and as ASEAN Chair in 2020.
Cambodia and Vietnam sign five agreements to boost bilateral relations
(26 February 2019) Cambodia and Vietnam signed five agreements to enhance bilateral ties during Vietnamese President Nguyen Phu Trong’s two-day state visit to Cambodia on February 25-26. Cambodian Prime Minister Hun Sen was also present during the signing ceremony held at the Peace Palace in Phnom Penh. According to a Xinhua report, the agreements cover the enhancement of land and water connectivity, trade facilitation, tourism promotion as well as a US$25 million grant to assist with the construction of Cambodia’s parliament administration building. Furthermore, both parties agreed to aim for a bilateral trade volume of US$5 billion by 2020, up from US$4.68 billion in 2018. Vietnam has around 210 investment projects in Cambodia worth US$3.03 billion, while Cambodia has 19 projects worth US$63.42 million in Vietnam.
Vietnamese telco records US$2.2 billion in revenue in its first decade in Cambodia
(21 February 2019) Vietnamese state-owned telecommunications company Viettel’s international brand Metfone announced that it recorded an accumulated revenue of over US$2.2 billion in its first 10 years of operating in Cambodia. Metfone also announced that it saw an accumulated profit of US$300 million, demonstrating a high EBITDA. Further, the company has reportedly created 3,000 direct jobs, contributed some US$500 million in taxes to the Cambodian government and increased Cambodia’s mobile phone density from 25% to 120% in its decade of operation. As such, Cambodian Deputy Prime Minister Samdech Pichey Sena Tea Banh lauded the company, saying that it has made a “significant contribution” to the country’s development.
Vietnam asks Thai cement conglomerate to continue investing in the country
(26 February 2019) Vietnamese Prime Minister Nguyen Xuan Phuc extolled Thai Siam Cement Group’s (SCG) many investments in Vietnam and encouraged them to continue doing so, during a reception hosted by the Prime Minister for SCG head Roongrote Rangsiyopash in Hanoi on February 26. The Prime Minister also highlighted the group’s petrochemical complex project in southern Vietnam, saying that the petrochemical industry is vital to the country’s economy. Rangsiyopash stated that they will ensure that the 460 Vietnamese staff involved in the project will be given intensive training to improve their professional skills. He also reaffirmed the company’s commitment in ensuring that the project is operational by 2023.
AirAsia doubles down on the Mekong subregion with new Thailand-Vietnam routes
(26 February 2019) Thai AirAsia launched new routes connecting Thailand and Vietnam as it looks to increase its market share in the Mekong region; composed of Cambodia, Laos, Myanmar, Thailand, Vietnam and provinces in southern China. The airline’s recent launch of its Chiang Mai-Da Nang route is one of three new routes slated to launch this year alongside routes from Don Mueang to Can Tho and Nha Trang. AirAsia previously launched a Chiang Mai-Hanoi route in 2018 which has so far maintained a load factor average of 88%, thus suggesting the need for more routes in the subregion. According to the Vietnamese Ministry of Tourism, the country received 349,000 visitors from Thailand in 2018, up 15.9% from 300,000 in 2017. According to AirAsia, the airline serves 19% of all passengers between these two countries with an average load factor of 87% across its routes.
About Greater Mekong Subregion (GMS)
The Greater Mekong Subregion (GMS) Economic Programme was launched by the Asian Development Bank in 1992 connecting five developing ASEAN countries, namely Cambodia, Laos, Myanmar, Vietnam and Thailand, and Chinese provinces of Yunnan and Guangxi Zhuang Autonomous region. The region has some of the most robust economies sharing the Mekong River Basin thanks to its reform and liberalisation. The subregion is growing at a faster pace than the whole of East Asia and the Asia Pacific as the GDP growth rate for 2017 was at 6.4 percent, according to the World Bank. The population at the subregion as of 2016 is at 340 million while the GDP at PPP is at US$3.1 trillion in 2016. In 2015, trading within the region was at US$444 billion.