Authorised agencies and related ministries from Vietnam and Japan will hold several meetings before the end of 2024 to discuss Japan’s schemes to provide more official development assistance (ODA) for Vietnam. Japan is also expected to expand trade and investment by opening its doors to more Vietnamese products, especially farm produce.

“Prime Minister Pham Minh Chinh expects that Vietnam and Japan will soon consider new mechanisms to create bigger breakthroughs to boost their bilateral economic, trade, and investment cooperation,” the Government Office said two weeks ago following a Hanoi meeting between PM Chinh and Shindo Yoshitaka, Japan’s Minister of State for Economic and Fiscal Policy.

In addition to calling for more Japanese investment into Vietnam, PM Chinh proposed that Japan continue supporting Vietnam in boosting national industrialisation and modernisation with new projects based on science, technology, innovation, green growth, digital economy, circular economy, sharing economy, and knowledge-based economy.

The Japanese fund is partly helping to push forward key metro line and other transport projects in Vietnam, Photo: Le Toan

Vietnam also suggested that Japan boost the consideration and opening of its doors to more Vietnamese products, including fresh fruit, starting with pomelo and then assorted grapes, passion fruit, and Japanese peaches. Japan is also proposed to facilitate Vietnamese businesses’ engagement in Japanese companies’ production and supply chains, as well as export-import chains.

Two-way trade reached $45.3 billion last year, including $23.5 billion worth of Vietnamese exports and imports of $21.8 billion. In the first half of this year, the total trade hit $21.7 billion, including Vietnamese exports valued at $11.3 billion – up 1.8 per cent on-year, and imports worth $10.4 billion, up 1.7 per cent on-year, according to Vietnam’s Ministry of Industry and Trade.

Besides the Comprehensive Strategic Partnership forged in November 2023, Vietnam and Japan are also members of many other free trade agreements and economic cooperation frameworks, most recently the Indo-Pacific Economic Framework for Prosperity. These cooperation frameworks play an important role in promoting trade, investment, and business relations between the two countries to a new level, according to the Vietnamese Government Office.

Last December, Japanese Prime Minister Kishida Fumio told PM Chinh at bilateral talks in Japan that his country would continue assisting Vietnam in industrialisation and modernisation, and building an independent, self-reliant economy that deeply integrates into the global community. The Japanese leader expressed his desire to continue to actively support Vietnam through ODA in the sectors where Japan’s technology and expertise can be utilised.

Vietnam and Japan have exchanged cooperation documents involving the fourth loan agreement for Ho Chi Minh City’s urban railway construction project, the Japan Development Scholarship project, and the equipment supply project for Vietnam’s K Hospital, with a total sum of ¥42.3 billion (nearly $300 million). Construction progress of the Japanese-funded Metro Line No.1 Ben Thanh-Suoi Tien, worth over VND43.7 trillion ($1.82 billion) in Ho Chi Minh City has reached about 98 per cent, and this project is expected to begin commercial operations at the end of 2024.

At a meeting in Japan last December between PM Chinh with Tanaka Akihiko, president of the Japan International Cooperation Agency (JICA), he suggested that Japan continue providing new-generation ODA for Vietnam with more incentives regarding lending rates and loaning time, with a focus on five key sectors: strategic infrastructure development, emerging sectors such as digital and green transformation, human resources training, healthcare and education, and environmental protection.

Earlier, JICA effectively worked with the Vietnamese side to implement procedures for a new-generation ODA sum valued at ¥50 billion ($332 million) and ODA-funded projects, making Japan the largest ODA provider for Vietnam.

Vietnam and Japan have welcomed the prospect that the actual amount of yen loans in the fiscal year 2023 from Japan could exceed ¥100 billion ($664 million).

“JICA will continue providing high-quality ODA for Vietnam to implement in a wide range of sectors such as infrastructure, health, human resource development, and climate change,” Sugano Yuichi, chief representative at JICA Vietnam told VIR last week. “Cooperation in such fields will make significant contributions to Vietnam’s economic growth and social security. It will also help it attract more private investments, including those from Japan.”