Apr 11, 2012
While the two massive earthquake in the Indian Ocean yesterday were thankfully non-events in human terms, they do give us the opportunity to look at trade between Indonesia and Vietnam. Looking at the most recent trade statistics between the two countries (which ends at 2010), total trade turnover has increased from $2.39 billion USD in 2008 to $3.09 billion in 2010. Indonesia's imports from Vietnam have risen 63% in that time, representing an increase from 0.56% of total Indonesian imports to 0.84%. Vietnam has represented 1.2% of Indonesia's exports over that same 3 year period, expanding from $1.67 billion to $1.95 billion.
The following charts are of the top 10 imports and exports by % of the total imported/exported. They highlight how important Vietnam is to specific sectors of the Indonesian economy. In the case of a natural disaster it would be expected that Indonesia would increase its imports of food, especially rice.
With the coming AEC, Thailand's importance to Vietnam is likely to increase. Thai banks are looking for partnerships with Vietnamese banks, though SME's are finding Vietnam's barriers to entry too high to take advantage of yet. Significant investment in Vietnam's shrimp and fishing industries are currently underway as well with Thai giant Charoen Pokpland Group investing more then $150 million in Vietnam's fish and chicken processing industries looking to double their business in Vietnam in the next four years.
As we can see from the chart below of the top 10 categories of trade to get an idea of the state of bilateral trade. Vietnam exports mostly raw commodities to Thailand, accounting for nearly half of the coffee and 15% of the meat imported. Conversely, Vietnam imports a much broader range of products from Thailand, mostly higher order goods and those that support Vietnam's garment industry.