Positive signs for foreign investment inflows

In the eyes of domestic experts, the time is ripe for Vietnam to attract foreign investment and ministries and localities should make the best use of this golden chance.

Martin Rama, lead economist of the World Bank in Vietnam, noted that in the reviewed period, many investors have come to the country for the first time, mostly from the US and Europe, and many major projects on information technology and infrastructure construction have been licensed.

The Overseas Investment Agency under the Ministry of Planning and Investment reported that many of the more than 400 foreign investment projects licensed since 2007 targeted areas facing difficulties such as Thai Nguyen, Ha Giang, Cao Bang and Son La.

Minister of Planning and Investment Vo Hong Phuc said that Vietnam’s admission to the World Trade Organisation (WTO) has helped make a breakthrough in economic development, particularly in investment, citing three reasons. Firstly, many strategic investors, including trans-national groups, have entered Vietnam to seek and establish links with their Vietnamese partners. Secondly, Vietnam’s export markets have been expanded. And thirdly, the implementation of WTO commitments, including the opening up of financial, banking and stock markets, have resulted in big inflows of foreign investment into Vietnam.

In their separate surveys announced recently, non-governmental organisations in Vietnam such as the Chamber of Commerce and Industry of the Republic of Korea and the Chamber of European Commerce in Vietnam shared the view that Vietnam’s current business environment is very attractive to foreign investors.

In a recent interview granted to VOV, Sean Hoy, head of the Development Department of the Iceland Embassy quoted Vietnamese Deputy Prime Minister Pham Gia Khiem as saying Vietnam is really a fertile land for foreign businesses. He said in the past three months, several business delegations from the two countries have exchanged visits to seek cooperation opportunities. He expressed his hope that more Icelandic businesses will come to Vietnam and that the Vietnamese Government will further improve its investment environment to facilitate the operation of the private economic sector.

The results of a visit to Vietnam two weeks ago by a German business delegation show that investors from Germany and Europe in general are shifting their interest in Vietnam. Several big German groups operating in Vietnam such as Metro, Daimler Chrysler, Siemens, Deutschebang, Allianz and Bayer are drafting new investment plans.

Gundula Rostel, who is in charge of project development and business strategy of Gelsenwasserr AG company, told VOV that there are numerous investment opportunities in Vietnam and German businesses can cooperate with their Vietnamese counterparts in the form of Build and Transfer (BT).

The Japan External Trade Organisation (JETRO) has recently announced the results of its annual survey on the operation of Japanese companies in 11 Asian companies and territories, including Vietnam. Accordingly, Vietnam was the best investment destination in terms of profits and advantages on investment and labour force. Vietnam came second only to India in Asia and was rated the highest among ASEAN countries where Japanese manufacturers expect to reap higher profits this year.

JETRO chief representative Kenjiro Ishiwata noted that Japanese businesses now enter Vietnam without visas and this is a direct result of efforts made by the two Governments in implementing the Vietnam-Japan Joint Initiative. Currently, the two countries are entering into the second phase of the initiative focusing on amending 46 priority cooperation areas to further improve the investment environment in Vietnam. The Japanese expert considered these efforts important factors for promoting waves of Japanese investment in Vietnam recently.

The JETRO survey also revealed that it is imperative to create a favourable investment environment by raising the quality of services supplied by State agencies and the business sector, and renewing investment-related mechanisms such as the legal system, infrastructure and personnel training.

Minister of Planning and Investment Vo Hong Phuc suggested that Vietnam speed up the disbursement of capital in licensed projects and prepare to approve other big projects to support investment growth in the coming year.

At a recent conference in Hanoi to review investment activities in the first half of 2007, Prime Minister Nguyen Tan Dung pointed out the fact that while many foreign investors have registered to pour billions of US dollars in Vietnam, weaknesses in management, particularly in administrative management, prevented the inflows of investment. He asked ministries and agencies to quickly address the issue to step up the pace.

Head of the Overseas Investment Agency Phan Huu Thang said the Government assigned the Ministry of Planning and Investment and the Overseas Investment Agency to draft a decree that creates favourable conditions for Vietnam to receive the second wave of foreign investment. The crux of the matter, Mr Thang pointed out, is that Vietnam should build a favourable business and investment environment for foreign investors, which is in line with international norms and practices, Vietnam’s laws and policies as well as future plans to attract foreign investment.

“In the decree, we try to point out shortcomings in attracting foreign direct investment and ask ministries, sectors and localities to iron out snags for foreign businesses,” said Mr Thang.

Reality shows that removing barriers for foreign businesses is one of the effective solutions for improving the business and investment environment. Positive results in improving such an environment will be testimony to boosting Vietnam’s economic prospects for international investors.

Source: VOV