Investment cooperation relationship between Vietnam and Denmark

Minister of Planning and Investment Nguyen Chi Dung and Minister of Foreign Affairs of Denmark
Kristian Jensen at the 5th Meeting of the Vietnam - Denmark Intergovernmental Cooperation Committee.
Photo: Minh Trang (MPI)

Vietnam - Denmark development cooperation

From 1992 to 2015, Denmark's total official aid commitment to Vietnam reached about 1,320 million USD, with the average annual commitment in the period 2000-2013 reaching about 64 million USD/year. In recent years, Danish aid has mainly been in the form of budget integration or direct sponsorship/co-financing for large projects and programs, typically: Project to support the national target program on clean water and rural environmental sanitation, period 2011-2015; Business sector support project, period 2011-2015; Climate change adaptation and mitigation program in Vietnam, period 2009-2014; Justice Partnership Program, period 2010-2015; Pilot program for scientific research cooperation, period 2008-2013;...

In recent times, Danish non-refundable aid has significantly contributed to the poverty reduction process in many regions, especially rural areas of Vietnam. Denmark's aid projects are mainly concentrated in cities, large towns and rural areas in the North and North Central Plains, while the South and mountainous areas do not have many or are still at a limited level. In recent years, Denmark has shifted its strategy, increasing support for the northern highland and mountainous provinces.

Regarding ODA loans, Vietnam has signed with Denmark 3 framework agreements on mixed credit, of which each agreement has a credit value of 40 million USD. On that basis, Vietnam has signed 3 credit limit agreements with Danish credit institutions. In 2013, the Ministry of Planning and Investment and the Danish Ministry of Development Cooperation signed a new Framework Agreement on general procedures and terms and funding institutions for projects using the Danida Corporate Finance Tool for Vietnam.

Up to now, there are 22 projects that have been and are being implemented with a total committed capital of about 120 million USD, of which 14 projects have been completed, 03 projects are being disbursed and 05 projects are in preparation.

Vietnam - Denmark investment cooperation

As of early September 2016, Denmark ranked 26/112 countries and territories investing in Vietnam with 128 projects and total registered investment capital of 632.44 million USD. Denmark has investment projects in 17 provinces and major cities of Vietnam, mainly focusing on the processing and manufacturing industry with 42 projects, total registered capital of 303.61 million USD, accounting for 48% of total investment capital. Next is the transportation and warehousing sector with 10 projects, total registered capital of 276.77 million USD, accounting for 43.6%; Professional, scientific and technological activities with 30 projects, total investment capital of 31 million USD; Information and communication fields and agriculture, forestry and fisheries.

Danish investment capital is mainly made through joint ventures with 58 projects and a total investment capital of 371.22 million USD, accounting for 58.7% of total investment capital, followed by 100% foreign capital with 70 projects with a total investment capital of 261.22 million USD, accounting for 41.3%.

Denmark is one of the early Nordic countries to invest in Vietnam. Increasing the flow of foreign investment from Denmark as well as EU countries into Vietnam is one of the effective measures to accelerate our country's industrialization progress. To strengthen investment cooperation between Vietnam and Denmark, the two sides need to research the direction of establishing field groups with potential for cooperation between the two countries to regularly and periodically exchange investment trends, resolve difficulties and obstacles and share experiences to promote the trade and investment process. Close cooperation in investment, trade and tourism promotion to enhance mutual understanding of the two sides' policies and investment environment to accelerate the flow of investment capital into Vietnamand vice versa. Maximize the benefits from implementing signed agreements and increase propaganda so that businesses on both sides understand and apply the terms of the agreement in business activities. Encourage investment in industries that are Denmark's strengths such as shipping, shipbuilding mechanics, seaport construction, energy equipment manufacturing, cement, pharmaceutical industry, aquaculture and processing and food technology, economical and efficient production and use of energy, wind energy and renewable energy, environment and clean green technology, industrial design and consumer goods, health and education.

Commercial

In recent years, Vietnam - Denmark trade cooperation has developed smoothly, achieving positive results, Denmark currently ranks 43rd in export market and 37th in Vietnam's import market. In 2015, the total two-way trade turnover reached 533 million USD, accounting for 0.2% of the country's total import-export turnover. In the first 7 months of 2016, Vietnam's export turnover to Denmark reached 162 million USD, down 8.5% over the same period last year; Import turnover from Denmark reached 199 million USD, an increase of 47%, the trade balance of the two countries is in a trade deficit.

Denmark is an important partner of Vietnam and also an important trade gateway for the Northern European market in particular and Europe in general. In the coming time, the two sides need to further promote investment and trade cooperation in the fields of environment, food, agriculture, fisheries, health, education... on the basis of thoroughly exploiting and taking advantage of existing strengths and potentials and bringing benefits to both sides./.