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Mission boosts Vietnam trade ties

Business junket sees investment in highways, energy

By Paul Voosen
Staff Writer, The Prague Post
March 26th, 2008 issue

A trade mission to Vietnam led by Prime Minister Mirek Topolánek netted more than $1 billion (16.18 billion Kč) in new contracts between Czech and Vietnamese companies, further bolstering long-existing commercial ties between the two countries.
Last year, the government approved a trade strategy focused on Vietnam that is now reaping results. Smaller Asian countries have drawn interest from domestic firms that are not able to navigate the larger ponds of China and India, experts say.
“A lot of Czech companies are going to Mongolia, Vietnam and Pakistan,” said Jan Stolár, spokesman for the Czech Export Bank (ČEB), which is financing many of the projects in Vietnam. “Vietnam is poised for an invasion of Czech exports,” he added.
Currently, 86 percent of the ČEB’s credits go to projects in Asia or the Commonwealth of Independent States, the bloc of former Soviet Union republics ringing Russia.
The Czech Republic and Vietnam totaled some $253 million in trade last year, an increase of 60 percent from the previous year, according to the government. Overall, the Czech Republic had a trade deficit with Vietnam, with the former exporting $66 million in goods and the latter $187 million.
Like nearby China, Vietnam is experiencing a capitalist surge while it remains under the control of the Communist Party, a regime Topolánek described as oppressive when he met reporters March 23. But the country’s autocratic government should not prevent engagement with Vietnam’s industries, many of which are state-owned, he said.
With increasing wealth, “the middle class will gradually push for changes in environmental protection, human rights and in a number of other standards that are common to us,” Topolánek said.
The largest deal inked during the mission focuses on a highway project that will, once completed, connect Ho Chi Minh City with the Mekong Delta, Vietnam’s largest agricultural region, the Vietnamese News Agency reported. The 82-kilometer-long highway will cost $1.2 billion and open in 2015.
Also, the real estate developer Finep agreed to work on a $500 million residential project in Hanoi and Ho Chi Minh City with Vietnamese partners, Michal Kocián, a Finep board member, told the Czech News Agency (ČTK).
A memorandum of understanding was signed between the ČEB and the shipbuilder Vinashin for a $45 million bus project. The ČEB, along with a Vietnamese bank, would invest $33.75 million, providing 75 percent of the total capital.
Škoda Praha, a subsidiary of the dominant energy utility ČEZ, is also working to finalize a deal to construct a massive coal-fired power plant in Vietnam worth over $3 billion, ČTK reported, details of which surfaced last year.

Paul Voosen can be reached at pvoosen@praguepost.com


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