Vietnam, Mekong neighbors urged to lean less on China

By Dang Khoa June 6, 2018 | 08:33 pm PT

Leaders of five countries, including Vietnam, wants to be more independence from China investors. Photo by VnExpress/Huynh Phuc Hau

Thailand pushes for five riparian countries to set up infrastructure fund for mutual benefit.

Thailand wants Vietnam and other neighboring countries to set up an infrastructure and project developments fund for the Mekong Delta region, aiming to cut their dependence on Chinese investment.

The Nikkei Asian Review has reported that Thai Prime Minister Prayuth Chan-ocha will propose the idea to the leaders of Vietnam, Cambodia, Laos, and Myanmar at the 8th summit of the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS). The summit is set to be held in Thailand on June 16.

Arthayudh Srisamoot, deputy permanent secretary of Thailand's ministry of foreign affairs, told Nikkei that the fund would be established in 2019 with Thailand providing seed funding of “millions of dollars.”

ACMECS will also welcome contributions from other financial institutions and countries, and raise funds through stocks and bonds. Member countries would mobilize funds through financial institutions and bilateral agreements with parties outside the region.

Even though not much information is available about this proposal, Nikkei learnt that member countries will set up a joint management committee to control the fund.

The proposed fund aims to better connect the five member countries and will follow ACMECS' 2019-2023 master plan.

Arthayudh stressed the importance of ACMECS countries having a common strategy before seeking help from other countries such as China.

China has heavily invested in Mekong countries, including Vietnam's Belt and Road Initiative (BRI), which requires considerable infrastructure development.

According to the 2017 Global Infrastructure Outlook report published by the Global Infrastructure Hub, Vietnam’s need for infrastructure investment between 2016 and 2040 amounts to $605 billion.

Notably, the gap between investment needs and current investment trends is a staggering $102 billion, meaning Vietnam will have to actively seek funding from different sources.

Vietnam has endorsed the BRI as it may become an important source of funding in the future.