Vietnam and North Korea to forge investment pact

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HANOI, Oct 9 (Reuters) A new agreement between Vietnam and North Korea would pave the way for Vietnamese investment in its fellow communist-run ally, which has shown small signs of preparing to step out of isolation.

Vietnam's government web site (www.chinhphu.vn) today said that Prime Minister Nguyen Tan Dung ''approved an investment protection and encouragement pact with the Democratic People's Republic of Korea''.

It said the government asked the foreign ministry and the Ministry of Planning and Investment ''to build a roadmap to implement the pact''.

The two countries have done almost no trade with each other since 1996, according to the Vietnam government.

Vietnam has relations with both North Korea and South Korea. The South Koreans are the biggest investor in the Southeast Asian country whose economy is growing at more than 8 per cent a year.

In the last 20 years, Vietnam has opened the door to a market economy and its GDP is estimated at about 62 billion dollars.

Diplomats have described Vietnam's economic growth and rise from isolation as an example for impoverished North Korea, whose GDP is estimated at 23 billion dollars.

North Korea sent troops to help Vietnam during the 1960s and 70s war against the United States and US-backed South Vietnam and ties have remained strong since.

REUTERS ARB RAI1116

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