More Russian capital to flow into Vietnam with FTA?

Flag of Vietnam (Visual by zdiviv, Freedigitalphotos.net)

A recent diplomatic visit by Russian Prime Minister Dmitry Medvedev to Vietnam and Thailand may signal an increase in Russian capital flowing into Vietnamese and Thai markets, suggests a report by The Diplomat.

In the wake of the Crimea Incidentamid increasing economic isolation from Western markets, Russia finalised a SU$400 billion energy deal with China.  Politically, this represents a shift away from Russian Eurocentrism and a policy overhaul that could see significantly more capital being invested in the Asian markets.

Later in 2015, a free trade agreement (FTA) between the Russian-led Eurasian Economic Union (EEU) and Vietnam is schedule to be signed. Russia is hoping that this will pave the way for a similar deal with others in the ASEAN economic community in the future. Medvedev stated that Vietnam and Russia had “…agreed on most contents of the agreement.”

Between 2015 and 2020, Medvedev and Nguyen Tan Dung, prime minister of Vietnam, have predicted that Russia-Vietnam trade could quadruple to $10 billion. Two-way trade between Russia and Vietnam amounted to $3.7 billion in 2014, a reduction from $4 billion in 2013.

Among many other deals made during the course of a high-level discussion, was  the Gazprom Neft agreeing to acquire 49 per cent of Vietnam’s Dung Quat refinery.

Nguyen explained “Our turnover has decreased slightly in the recent years, so, in order to improve the situation, we decided to instruct our ministries, businesses and agencies on both sides to take measures in signing an agreement on a free trade zone between Vietnam and the Eurasian Economic Union in the first half of 2015. We have seen some reduction in trade in the past year, which, as we have stated, will be temporary, and we are sure about it.”

Establishing a FTA between Vietnam and the EEU has benefits of increasing the size of the markets accessible to Vietnamese goods, as well as increasing the business opportunities for Vietnam. For Russia, it establishes access to the growth engine of Southeast Asia and surmounts the diplomatic and economic isolation it faces in Europe.

Given the size of the Eurasian Economic CommunityVietnamese businesses would be able to access a market with 213.9 million people and an economy with a GDP estimated at to be worth $2.4 trillion.

Related Stories:

Vietnam’s BIDV, Russia’s VTB sign MoU to boost their JV bank VRB

Russia’s Gazprom Neft to buy 49% in  Vietnamese Refinery

Vietnamese cos can expand abroad by developing hi-tech products: Minh

Image: freedigitalphotos.net

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.