IBEC: Enhancing trade cooperation of Vietnam with CEE and Eurasia

On November 27, 2019 in Hanoi, the State Bank of Vietnam (SBV) in collaboration with the International Bank for Economic Co-operation (IBEC) organized a Business Forum with the theme of “Enhancing trade cooperation of Vietnam with Central-Eastern Europe (CEE) and Eurasia” on the occasion of the 134th meeting of the IBEC Council in Vietnam. SBV Deputy Governor Nguyen Thi Hong chaired the Forum.

Also attending the Forum were leaders and representatives of the SBV Departments; the IBEC delegation; the Government agencies; the commercial banks; many Vietnamese and Russian businesses, as well as several international financial institutions operating in Vietnam.

In her opening remarks at the Forum, Deputy Governor Nguyen Thi Hong affirmed that thanks to the efforts and determination of the member countries as well as the IBEC Board of Directors in implementing the established Strategy, the IBEC's operations have been significantly improved, having initially met the confidence and expectations of the member countries. The positive results achieved by the IBEC include: (i) the IBEC's credit - trade finance portfolio has been increasing sharply, and as of September 30, 2019 reached EUR 219.5 million, an increase of nearly 10 times compared to the end of 2017 (EUR 22 million); (ii) in March 2018, the IBEC participated in the credit rating for the first time and was rated at BBB- by Fitch, with a stable outlook, and this rating has been maintained since then; (iii) in October 2019, for the first time in its history, the IBEC successfully issued the first bonds in Russia with a scale of nearly EUR 99 million, thereby helping the IBEC to access long-term capital in the capital market and marking a new step in the operations of the IBEC, contributing to promoting the image and the position of the IBEC in the international financial community.

In particular, one of the important orientations strongly supported by all of the member countries in the IBEC's Strategy for Recovery and Development is the focus on developing the function of providing trade finance for transactions among the member countries, and between the member countries and the rest of the world. "This is a very suitable orientation with the development models of the countries and the strengths of the IBEC," Deputy Governor Nguyen Thi Hong emphasized.

Vietnam is an export-oriented country and over the past time, the Government has been stepping up efforts of international and regional economic integration with the signing and implementation of a series of free trade agreements, creating a framework as well as a premise and motivation for promoting economic and trade cooperation between Vietnam and related countries. In particular, the free trade agreement between Vietnam and the Eurasian Economic Union, and the free trade agreement between Vietnam and the EU are among the solid foundations for Vietnam to promote trade cooperation relations with the IBEC member countries within the CEE and Eurasia.

The current objectives and tasks set forth is how to effectively implement in practice and maximize the benefits that the free trade agreements can bring to all parties. To achieve this, in addition to other decisive factors, the participation and support of the international financial institutions such as the IBEC plays an important role in promoting trade cooperation among the parties through the provision of diversified and convenient financial products and services, thereby contributing to facilitating international trade transactions to be carried out effectively.

Deputy Governor Nguyen Thi Hong hoped that through this Business Forum, the parties would have a good opportunity to initially explore the demands and possibilities of cooperation in order to maximize the inherent potential of each party towards effective and sustainable cooperation in the future. As a State management agency in the monetary and banking operations in Vietnam, as well as the representative agency of Vietnamese Government at the IBEC, the SBV would always accompany and actively support the IBEC and its parties to realize the set-out targets.”

At the Forum, many participants gave their assessments and analysis of the opportunities and potentials for developing trade cooperation between Vietnam and countries in CEE and Eurasia. At the same time, the forum was also a channel for sharing information and experience on cooperation between Russian and Vietnamese businesses, cooperation in the fields of application of blockchain technology and digitalization in the development of trade finance products. This forum aimed to introduce the IBEC and the role of the IBEC in supporting trade development in Vietnam.

Within the framework of the Forum, there was also a signing ceremony for two MOUs between the IBEC and Vietnamese partners. Specifically, the signing of the tripartite Memorandum of Understanding among the IBEC, the Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank), and HATECO Group Joint Stock Company (HATECO Group) establishing a framework for cooperation and encouragement of funding for the construction project of HATECO Logistics Center at Sai Dong B Industrial Park, Huynh Tan Phat Street, Long Bien District, Hanoi City, with a total estimated investment of VND 1,093 billion; at the same time, VietinBank will cooperate with the IBEC to provide HATECO with an effective and safe payment mechanism. In addition, the IBEC and the Vietnam Bank for Agriculture and Rural Development (Agribank) also signed a Memorandum of Understanding on business cooperation...

Deputy Governor Nguyen Thi Hong witnesses the signing of the tripartite MoU among the IBEC-Vietinbank-Hateco Group

The IBEC is an international financial institution consisting of 8 member countries (the Republic of Bulgaria, the Socialist Republic of Vietnam, Mongolia, the Republic of Poland, the Russian Federation, Romania, the Slovak Republic and the Czech Republic) and was established in 1963 within the framework of the Council for Mutual Economic Assistance (former SEV), with the headquarters in Moscow, Russia. The key mandate of the IBEC is on trade finance operations, credit provision, multilateral payments and provision of other banking services to assist its member countries to promote external economic relations and economic development. Vietnam joined the IBEC in 1977.

VA