'S FAST GROWING ECONOMY, AGRIBUSINESS SUCCESS STORY AND PROSPECTS FOR COOPERATION WITH THE by H.E. TRUONG TRIEU DUONG

Honorable Ramon Ilusorio, Honorable Victorio Amante, Ladies and Gentlemen of the Management Association of the Philippines, It is my honor to be the guest speaker today to brief with you the fast growing economy of Vietnam, the success story of Vietnam's sector and the prospects for cooperation between the enterprises of Vietnam and the Philippines. I. Vietnam's fast growing economy: Viet Nam, after two decades of rapid economic growth, is today considered a development success story. Political and economic reforms (Doi Moi) launched in 1986 have transformed Viet Nam from one of the poorest nations in the world to a middle-income country within a quarter of a century. This dramatic growth, with per capita income rising from below US$100 to an estimated at US$1,596 in 2012, has coincided with a dramatic reduction in poverty from 58 to 14 per cent between 1993 and 2008 and an estimated 11.8 per cent in 2011. With 88.5 million people from 54 different ethnic groups, Viet Nam is a diverse nation with a rich culture that has witnessed a century of dramatic change. Having emerged from periods of colonialism and decades of conflict, the reunification of Viet Nam in 1975 following a costly war with the and the Doi Moi economic revolution in the 1980s have transformed one of the world's poorest nations into one of Asia's most dynamic and fastest growing economies, with aspirations to be a developed nation by 2020. The rise of this aspiring Asian tiger economy resulted from a shift from a centrally-planned to a 'socialist market' economy in 1986, with the resulting inflows of foreign direct , emergence of the private sector and a more globalized approach to business and trade as a result of Viet Nam's accession in 2007 driving its economic growth engine. This language for change translate^ into a breathtaking period of social change amid rising living standards and a reduction in poverty.

l Amid such rapid economic growth and dramatic changes in society, the resulting growing pains leave Viet Nam facing significant challenges today. If left unchecked, these mounting challenges and growing disparities will severely compromise the country's . While there has been an eye• catching drop in the rate of poverty, it is not reflected in ethnic minority and rural populations with more people vulnerable to falling back below the threshold. Further poverty reduction efforts will be hampered by continuing domestic macroeconomic instability and the need to employ a new economic growth model, along with the ongoing global economic crisis and associated reduction in donor funding. Unlocking the door to a more equitable and prosperous society will depend on success in regulating economic growth in environmentally sustainable ways, improving governance and distributing wealth and social services more evenly across society. The Socio-Economic Development Strategy 2011-2020 calls for 'breakthroughs' in structural reforms, environmental sustainability, social equity and macroeconomic stability to allow Viet Nam to lay the foundations for a modern, industrialized society by 2020. Viet Nam has won global recognition for its development and poverty reduction successes on the back of rapid economic growth during the past two decades. It has transformed from one of the world's poorest nations to boasting one of the fastest growing economies, with lower middle-income status attained in 2010. This growth, based on robust economic reforms and World Trade Organization-driven global integration, helped drive down poverty from 58 to 14 per cent between 1993 and 2008 and an estimated 11.8 per cent in 2011. Rising living standards have been matched by a steady improvement in a number of development indicators, with improved access to education and health, along with targeted social safety nets for a broader range of society. Viet Nam has been applauded for taking steps toward creating a more equitable society that is inclusive of the most vulnerable members of society, including the poor, ethnic minorities, women and the disabled. With an eye to the future, Viet Nam is now recalibrating its economic model to drive a new period of growth and sustainable development. II. Vietnam's Agribusiness Success Story: Ninety percent of the poor in Vietnam, or three quarters of the population, live in the rural areas which is why rural development and agriculture are critical to Vietnam's development. Agriculture accounts for 22 percent of GDP, 30 percent of and 60 percent of employment. The majority of the rural population makes its living by growing and selling crops ( accounts for 45 percent of agricultural production), raising and selling livestock and fish, and from forest products. 1. Crops: Vietnam's topography and climatic conditions are favorable for growing both tropical and subtropical crops. About 29% of the country's total land area of 33 million ha is agricultural land and 37% is classified as forest land. Agriculture development has been largely due to the increase in crop output. Rice: Rice is grown in over half of the agricultural lands in the country and represents more than 60% of the cultivated area. The Red and Mekong River Deltas are main rice - producing regions (wet rice cultivation, accounting for 70% of the total national production. Between 1986 and 2013, rice output more than doubled, from 16 million to 35.8 million tons, making Vietnam the second largest rice exporter in the world. The factors contributing to this success are: The MRD is a veritable rice growing paradise of ample rainfall (1800mm or 72 inches per year), tropical temperatures, and fertile soils. Add to this is the vast dyke and irrigation infrastructure built by the Vietnamese. The development of irrigation systems has been greatly enhanced in the past 40 years with a network currently estimated at 30,000-40,000 kilometers of inter-connected canals within the MRD alone. Nationwide, fully 97 percent of all land sown to rice in Vietnam is irrigated. Farmers in the MRD region cultivate 3 crops of rice each year, divided into winter, spring, and autumn seasonal periods. Total rice production currently averages about 15.3 million tons (milled basis), with the spring crop being the largest (6.75 million tons) followed by the autumn (5.75 million) and the winter crop (0.54 million tons). In the last several years the government has provided financial support to farmers in the MRD to reinforce or increase the height of existing dykes and build new ones for enhanced seasonal flood control. : Coffee is the second largest agricultural after rice and the most important industrial crop in Vietnam. In the late 1980s, the state -owned coffee farms began to allocate plots of land to individual households that were responsible for the production on the plots. These reforms substantially affected the coffee sector, making production grew from 10,000 ha to more than 500,000 ha in recent years, concentrating in Central Highlands. About 90% of coffee is produced by independent farm households with areas smaller than 2 ha per farm. In the late 1990s, world market prices of coffee declined, hence, the government started to diversity to other crops.

3 Pepper: Vietnam is the biggest pepper producer in the world, with 50,000 ha of land devoted to pepper, annually yielding 73,000 tons of black pepper. : Vietnam is the world's third biggest producer in cashew nut and are the fourth largest agricultural export of Vietnam. The number of households participating in cashew growing was estimated at 273,000 with 87% of them having areas smaller than 2 ha. Sixty percent of Vietnam's cashews are sold on the international market as the world's best quality nut and international customers finding them hugely attractive. The country gained US$1.5 billion in export revenue in 2012, outstripping the record made last year of US$1.4 billion. In 2012, the biggest importers of Vietnamese cashews included the US with US$307 million, US$192 million, and the US$132 million. Rubber: Rubber is the third largest agricultural export commodity, occupying the largest land area among industrial crops. The total area of rubber is 450,000 ha, yielding 400,000 tons of dry latex. 2. Livestock and Poultry: In 2012, Vietnam had 2.8 million buffaloes, 4.4. million cattle, 25,million pigs and 250 million birds. Livestock production accounts for about 14% of agricultural GDP. Under the Livestock Development Strategy, the country would increase the ratio of livestock production to 38% of the total agricultural output by 2015 and 42% by 2020 from the current 30%. By 2020 the livestock industry targets production of 5.5 million tons of meat, 14 billion eggs, and more than 1 million tons of . This translates into 56 kg of meat, 140 eggs, and more than 10 kg of milk per capita per year. 3. Fishery: Vietnam's marine resources' potential is 4.2 million tons of which the annual allowable catch is 1.7 million tons, making Vietnam one of the world's largest seafood producers and exporters along with and . In 2012, Vietnam seafood exports reached US$6,134 billion, up 0.3 percent from those of 2011. exports made up the largest proportion of total export value, with US$2.24 billion, down 6.6% over that of 2011 in which white-leg shrimp hit US$741 million (up 33%) and black tiger shrimp hit US$1.25 billion (up 56%), the rest was other species of shrimp. Pangasius products were exported to 142 markets. EU was the largest market but exports to the block snowed the strongest decline of 19%, hitting US$1.74 billion. Exports to the U.S. remained the growth of 8.4%. Other markets 4 kept the positive growth in which China was the most prominent market with the growth of 31.5%. In 2012, Vietnam delivered its tuna to 94 markets with export turnover of US$569 million, up 50 percent compared to that of 2011. Out of Vietnam's key exported seafood items, tuna experienced the highest growth thanks to higher catch landings and raw tuna to process and re-export. According to the Vietnam's General Department of Customs, in the first half of 2013, seafood exports reached US$2.89 billion, increasing by only 0.3%. Shrimp products made up the largest part in total export revenue with US$1.1 billion. Shrimp also got the strongest growth of 8.6 percent among Vietnam's exported seafood products. III. Prospects for cooperation with the Philippines: Vietnam and the Philippines' economic relations have been growing tremendously during the past few years. The prospects for more cooperation between the two countries' enterprises in the fields of trade, investment, education and are huge. I hope that the members of MAP will exploit these opportunities in the near future. 1. Trade: Two-way trade turnover has grown from 450 million USD in 2003 to 2, 84 billion USD in 2012. Rice is the main exporting commodity of Vietnam to the Philippines. In the year 2013, Vietnam has exported 687 thousand tons of rice through the government channels. Vietnamese rice has also been confiscated by smugglers at Subic port. I hope that the private enterprises of the Philippines will realize the domestic demands and rice from Vietnam through private channels as well. In addition, there are many more products the two countries can exchange. Vietnam exports electronic equipment and agricultural products. Vietnam imports from the Philippines fertilizers, equipment, minerals, oil and gas, pharmaceuticals and building materials... 2. Investment: Investment from the Philippines to Vietnam remains modest. Until now, Philippines has possessed 30 investment projects with the total capital of 300 US$ million, ranking 4th in ASEAN (after , Thailand and ) and 27th among the countries/territories investing in Vietnam.

5 Enterprises like Ayala, San Miguel, United Pharmacy, Oishi, Maynilad have had big successes in Vietnam. As a fast growing economy with a stable political system, Vietnam is indeed a good destination for your investment. 3. Education: In the past few years more and more Vietnamese students have been coming to the Philippines to enjoy the excellent English teaching education system. This is a field that both countries can exploit in the near future, either by attracting more Vietnamese students to the Philippines or the Philippines sending teachers/ instructors/ opening English institutions in Vietnam. 4. Tourism: With two airlines (Philippines airlines and Cebu Pacific Air) having direct flights from Manila to and , tourism is definitely growing in the last few years. However, there are still much potential yet to be discovered. I hope that MAP's members and the Embassy can cooperate to have tourism, cultural exchange projects or shows in both Vietnam and the Philippines to facilitate further flow of tourists from both countries.

IV. Conclusions:

As both fast growing economies in the region, Vietnam and the Philippines share many macro and micro economic challenges and prospects. The two countries also have much potential for cooperation in terms of trade, investment, education and tourism. By strengthening our relations of friendship and cooperation, the two countries will be able to learn and help each other in their economic development.

Once again, I would like to thank MAP for inviting me here today to share the story of Vietnam and to inform your members of the different opportunities for cooperation with Vietnam. My door is always open for the members of MAP if you have any questions or difficulties in your projects in Vietnam in the near future.

Maraming Salamat Po! (Thank you very much!)

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