The recent World Investment Prospect survey of UNCTAD ranked Vietnam as the sixth most attractive location in the world by transnational companies. The Asian Business Council ranks it third in the world in terms of investment attraction for Asian groups in 2007-2009. Remarkably, in 2007, foreign direct investment (FDI) capital commitment is projected at record US$16 billion. Disbursed FDI capital reached 6.8 per cent of GDP, higher than that in China. This showed effective reform of Vietnam.
The good signal is the decreasing proportion of FDI capital in total social investment and increasing amount of investment capital from the private economic sector. This shows Vietnam’s decreased reliance on foreign capital sources and the optimism of domestic and foreign investors in Vietnam’s economy.
According to Minister of Planning and Investment Le Hong Phuc, 2007 is the best year in Vietnam so far. This conclusion is based on feedback from foreign and domestic investors. The competitiveness index of Vietnam increased strongly.
World Bank Country Director in Vietnam, Mr Ajay Chhibber, said 2007 has been a banner year for Vietnam. As the 150th member of the World Trade Organisation (WTO), Vietnam has become a highly attractive investment destination and the response from the business community appears to have been very positive.
According to the survey in 234 domestic and foreign-led enterprises conducted by the secretariat of the Doing Business in Vietnam Forum, the business climate in Vietnam in 2007 is better than a year earlier. In the World Bank and International Finance Corporation publication “Doing Business Report (2008)” Vietnam ranked 91 out of 178 economies in terms of ease of doing business, jumping 3 places. Up to 90 per cent of businesses in Vietnam planned to expand business in the country. Interviewed enterprises think that favourable economic prospects, market opening, reform and market expansion are core reasons for their business expansion plans in Vietnam.
The government has made greater efforts to institutionalise the legal system to improve the investment climate, reform administrative procedures, increase decentralisation and hold dialogues to settle difficulties for enterprises. Besides, with the support from central and local authorities, investors and enterprises can deal with the difficulties arising from their businesses more easily, according to Mr Ly Dinh Son, Vice Chairman of Vietnam Small and Medium and Enterprises Association.
Representatives from Singapore and Australia business communities – key trade partners of Vietnam – expressed their confidence in the progress of the business climate in Vietnam. Mr Paul Fairhead, President of AusCham in Hanoi, affirmed positive stories of strong economic growth, political stability, successful poverty reduction and international integration. The high increase on foreign capital flows in the past 12 months reflected the common assessment of foreign investors in the potential of Vietnam. In 2007, AusCham members increased by 25 per cent to 450 members. This showed increased interests and optimism of Australian companies in Vietnam.
However, Mr Ajay Chhibber also warned of three difficulties to tackle and said the Vietnamese government and enterprises should work together to develop infrastructure, especially traffic and electricity. The government also needs to streamline administrative procedures and bureaucracy, and the training of skilled workers.
In a recent dialogue with the business community, Minister of Planning and Investment, Vo Hong Phuc, pledged the Vietnamese government’s added effort to improve the business climate to fully tap domestic and foreign resources for investment and development. The government is urgently upgrading infrastructure and streamlining administrative procedures to facilitate investor access to financial sources, land and services.
Kim Phuong
Vietnamese
