Despite the recent natural disasters to strike Japan, economists have said that the country will still make efforts to fulfill its capital commitments to Vietnam.
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| Hai Van Pass Tunnel was funded by Japanese ODA |
For the next one to three years, Japan’s pledged ODA and FDI for Vietnam could be settled despite the effects of the earthquake and tsunami, said Tong Minh Tuan, an expert of macroeconomic issues of BIDV Securities Company.
However, he also said that in the long-term, Japan may have to slim down its ODA programmes.
Foreign indirect investment (FII) in Vietnam may not be affected, as this is considered an emerging market. No signals of capital withdrawals from the Vietnamese market have been identified as of yet, he added.
Concerning FDI investment, Nguyen Duc Do, from Academy of Finance’s Institute of Economics and Finance, said being an economic power in Asia, Japan may do its utmost to fulfil its financial pledges in order to maintain its prestige in the region.
Japanese FDI in Vietnam in the time to come will much depend on how attractive the Vietnamese investment environment is, Do noted.
If Vietnam has stable macroeconomic policies and good investment environment, Japanese investment in the country may not only be maintained but also increased, he attributed.
According to Do, precise assessments on effects of Japan’s earthquake and tsunami on Japanese investment in Vietnam could be made after damages and losses are calculated.
In the meantime, Nguyen Minh Phong from Hanoi Institute for Socio-Economic Development Studies said, “I believe that Japan will fully complete its ODA commitments to Vietnam in the time to come, in addition to its great efforts to overcome the aftermath of natural disasters.”
In the long-term, Japanese firms will maintain important activities in their business plans with focuses on restructuring its branches in the world, according to Phong.
He added that Vietnamese firms should have plans to boost exports to Japan in the time to come to meet increasing demand for goods there.
