Businesses Upbeat about Vietnam Prospects

At the "Vietnam Economic Recovery" forum, an activity associated with the Consultative Group (CG) recently held in Hanoi, Vietnamese Planning and Investment Minister Vo Hong Phuc said: "Vietnam has experienced a period of difficulties and volatility of the world economy. In recent years, the Government of Vietnam has succeeded in executing its economic policies and quickly responding to the economic crisis and the level of economic recession by adopting the stimulus package. Then, the country has managed to maintain its economic growth of 5.2 percent this year. To attain such a growth rate, the business environment in Vietnam must be attractive to foreign investors.”

 

Vietnamese Government’s policies to respond the economic crisis in 2009 are highly appreciated by the business community. Most businesses are optimistic about the economic development of Vietnam in the future. According to a survey on the Vietnamese business environment, up to two thirds of interviewees anticipated positive economic growth of Vietnam in the near future and more than three fourths of surveyed businesses planned to expand their operations in the next three years.

 

This year, the most noticeable change is seen in public administration reform and simplification. As many as 65.35 percent of domestic enterprises felt the change compared with 27.91 percent of of foreign-led enterprises. Possibly, this is the effect of the implementation of Project 30 on simplifying public administrative procedures in the period from 2007 to 2012. Domestic enterprises are more heavily affected bureaucracy and red tapes than foreign-invested firms; thus, they feel the change in this area more clearly.

 

In 2009, ministries, State agencies and localities have completed the statistics and have published administrative procedures. The Prime Minister also set out clear objectives for ministries and State organs to reduce at least 30 percent of public administration work. The second most-change field is information and telecommunication sectors. Up to 49.48 percent of surveyed enterprises saw improvements. Surveyed businesses also felt more equal treatment for domestic enterprises and FDI firms.

 

Apart from these measures and leverages to spur economic growth, Vietnam will need more effort to improve its governance to create a healthy investment environment to attract foreign investors. Representatives of many foreign-led enterprises underscored the unclearness and unsteadiness of business environment due to weaknesses in infrastructure, intellectual property right protection, counterfeited good prevention, legal dispute settlement and execution of verdicts of courthouse and economic arbitrators in Vietnam, the ability to access foreign currency and the effectiveness of administrative services, etc. With the economic recovery in 2009, Vietnam is expected to improve its business environment for more foreign investors to do business in the country.