Vietnam will host the World Information Technology Forum-WITFOR 2009 for the first time between 26 and 28, August, under the chairmanship of the Ministry of Information and Communications (MIC). The event is not only a chance for Vietnam to affirm its potential for IT development, but also helps to attract more investors in the sector. To know more about the WITFOR 2009, Vietnamese Business Forum had an interview with Deputy Minister of Information and Communications Nguyen Minh Hong.
Could you talk about Vietnam’s IT investment for the past few years?
Vietnam has made remarkable achievements in attracting investment in information and communication technologies. The country is now home to IT giants like Intel, IBM, Canon, Fujitsu, Foxconn, and Samsung. Vietnam is listed in the top ten countries which are promising for software outsourcing globally.
Vietnam has focused on building IT industrial parks to lure more investments, which is also a way to promote the country’s IT potential and advantages. As of July last year, Vietnam had around 186 industrial parks and export processing zones covering a total area of 45,042 hectares. It has also set up five software industrial parks located on a combine area of 737,589 square metres. Several IT parks have made initial successes, including hi-tech parks in Ho Chi Minh City, Da Nang and Hanoi.
According to an unofficial statistics report, by the end of September 2008, Vietnamese IT sector had pulled in 332 projects totalling over US$1.97 billion, with projects licensed in 2007 accounting for 32 %.
Despite facing difficulties resulted from the global economic slump, the local IT industry has not been affected as seriously as many countries in the region and the world. Last year, the sector still gained gross revenue of US$4.5 billion, up 20 % on-year.
In the trend of economic globalisation and rapid IT development, developing countries are emerging as appealing destinations to draw in investment in software outsourcing and IT services due to pressure of price cut and labour shortage. All of these have opened a big opportunity for Vietnam to attempt IT investors.
Vietnam has built open IT investment policies, which is seen as one of criteria for the country to be selected for hosting WITFOR 2009. What are your comments on this?
Vietnam has set up open investment policies and mechanism for the IT sector. This is indicated through a system of comprehensive IT legal documents which have been built and issued, aiming to create a legal corridor for managing IT activities. Vietnam has built the Law on Information and Technology and grinding decrees on the laws on IT application and sanctions on IT violations as well as programmes and plans on IT development.
Vietnam focuses on applying and development IT in the socio-economic development strategy; creating favourable conditions for individuals and organisation to operate in the IT sector; developing IT into a key sector; encouraging IT investment; allocating the state budget for IT application; developing IT human resources; developing national IT infrastructures and offering incentives for individuals and organisations working in the IT sector and enhancing IT exchange and cooperation with foreign partners (Article 5, the Law on Information and Technology). Therefore, all IT policies are comprehensively built to boost the IT development.
In addition, the state always pays attention to IT application and development. A national steering board on IT, led by deputy prime minister, has been established to assist the Government and Prime Minister in working out strategic measures for IT application and development nationwide. Ministries and agencies have set up boards in charge of dealing with IT-related issues.
The IT sector has been offered preferential policies. Software businesses are exempted from corporate income tax for the first four years of their operation and enjoy a discount of 50 % in the nine following year. The country gives investment incentives for projects in the business areas of computer, software and digital content. IT industrial parks also get priorities like other hi-tech parks.
These are several specific contents in Vietnam’s IT policies which are considered open and a criteria for Vietnam to be chosen for hosting WITFOR 2009.
What do you think about Vietnam’s IT human resource? What are the ministry’s strategies for the labour force development in the coming time?
Vietnam has achieved encouraging results in training IT labour force over the past recent years in both quantity and quality. In 1997, the country housed only seven universities which provided IT training courses, however, the figure has grown to 271 nationwide, including colleges.
Vietnam boasts cheap and diligent IT labourers compared to many other countries in Asian. However, in reality, the country still lags behind the region in both the number and quality of IT human resources. Vietnam needs to raise its contingent of IT laborrers to hundreds of thousands from the current several tens of thousands. In terms of the quality, local IT workers are still weak at software skills, management capacity and foreign language skills. To develop the IT sector, I think Vietnam should do more to improve the human resource quality in parallel with increasing the quantity.
The MIC has joined hands with the Ministry of Education and Training to build IT human resource development policies and plans. The two ministries have recently proposed the Prime Minister to issue Decision 698/QD-TTg for approving the IT labour force development plan by 2015 and a vision for further development through 2020. Under the plan, the government will invest VND900 billion on training IT labourers.
Currently, the key factor to lure investors is not priorities, but a favourable and stable investment environment? What are the country’s policies for IT investment attraction?
To facilitate the IT sector’s investment climate, it is necessary to finalise the legal document system and policies. The IT investment policies still fail to meet real demand. The MIC is seeking the government’s approval for a decree on IT application, management and investment using the state budget. The Ministry is also considering price assessment of software and both locally-made and imported spearhead IT products and taxes on IT products. Additionally, completing a legal framework is important to create a favourable investment environment for IT investors in Vietnam.
Other top priorities include modernising communications system, raising quality of transmission lines and lowering communications charges. Vietnam has witnessed a sharp increase in the number of mobile phone subscribers over the past recent years. However, it is necessary to ensure information safety to develop the potential digital content industry.
Furthermore, IT human resource development is among the country’s matters of concern. The sate has issued many policies on the IT labour force development as mentioned above. This is one of the most effective measures to attract investors.
Vietnam also needs to develop supporting industry to diversify its products, meeting investors’ increasing demand, particularly foreigners. The supporting industry’s development will help reduce investment and business costs.
The IT application helps to form the market for the IT sector because it boosts the production of computer hardware, internet equipment, software and digital content.
Improving the IT investment environment needs participation of different ministries and agencies. These are several Vietnam’s orientations for the IT development.
Reported by Nguyen Thoa
Vietnamese
