Vietnam and Myanmar Sign MoU to Strengthen Mutual Cooperation in the Banking Sector
Vietnam and Myanmar are building economic ties, primarily in the banking sector, after signing a memorandum of understanding on cooperation between a state-owned Vietnamese bank and a Myanmar industrial-related bank in Yangon earlier this month.
The two banks that signed the agreement are the Small and Medium Industrial Development Bank of Myanmar (SMIDB) and the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV).
The Manila Times reports, “The MoU is aimed at capacity building and transfer of technology in the banking sector as well as monetary and foreign exchange activities, said SMIDB, adding that Myanmar bank staff will be provided with further training in Vietnam to serve for Myanmar’s SME sector development.”
At the time, BIDV announced that it would provide SMIDB with US$30 million in loans at a four percent interest rate for five years. Although it already has a representative office in Myanmar, BIDV has plans to open a formal branch in the country in the near future.
BIDV will assist the Myanmar bank in its areas of expertise and strength, including information technology application, consultation, training and surveying. Both sides also agreed to make regular exchanges to explore new cooperation opportunities in other spheres.
Myanmar and Vietnam have vowed to step up bilateral cooperation, including increased investment in Myanmar by Vietnamese entrepreneurs.
According to official statistics, Vietnamese investment in Myanmar amounted to US$513.19 million as of April 2014, ranking 8th in Myanmar’s foreign investors’ line-up since Myanmar opened itself up to the outside world in late 1988.
In May 2013, as part of the ongoing bilateral cooperation, a 45-member delegation of Vietnamese entrepreneurs visited Myanmar to initiate an MoU with the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) on cooperation in various economic sectors.
Both sides agreed to cooperate in various economic sectors such as textile, hotel and tourist, electronic and spare parts, marine products, food, oil and gas, construction materials, fruits and vegetables, agriculture, housing and sanitation.
Official statistics show bilateral trade between Myanmar and Vietnam reached US$66 million in 2012-13 and it is expected to reach US$500 million by 2015.
Vietnamese entrepreneurs are not the only driving force behind this bilateral cooperation. The governments of both counties are also encouraging greater economic collaboration.
Last month, during a visit from Myanmar’s Minister of Industry, U Maung Myint, to Hanoi, Vietnamese Prime Minister Nguyen Tan Dung stated that the Vietnamese government will help local businesses invest in Myanmar, highlighting the positive developments that have been made in economics, investment and trade between the two nations.
Vietnam and Myanmar have been working toward greater economic cooperation for some time now. In recent years, Vietnamese Hoang Anh Construction and Development House Joint Stock Company were involved in a US$300 million project developing an international-standard hotel and housing in the city of Yangon.
Vietnam generally imports from Myanmar goods such as forestry products, marine products, vegetables and rubber, while it exports to the country iron products, machines and spare parts, plastic, textiles and clothing.
Given the emphasis both Vietnam and Myanmar have placed on international cooperation, not only between the two nations but with their ASEAN neighbors as well, it seems likely that these Southeast Asian countries will build strong ties, both politically and economically.
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