Business Environment Still Face Obstacles

"As many as 89 % of State-owned enterprises have fixed business locations while 51 % of private enterprises use their houses as working places,” said a survey conducted by VCCI in 2010 and announced by Ms Pham Thi Thu Hang, Director of VCCI’s Enterprise Development Foundation, at this conference.

Hang said the private sector does not have equal rights with the State-owned sector in accessing capital and land resources. Only 2 % of private enterprises can access industrial zones.

 

According to the World Bank, land, labour and tax aspects in Vietnam have slow progress in 2010. The outcome of public administration reform is unclear while the progress of reform is incompatible or slow to expectations of businesses.

 

Mr Phan Huu Thang, Director of Centre for Foreign Investment Research under Hanoi Economics University, said: In 2010, the amount of disbursed capital was rather low relative to registered value (estimated US$11 billion versus US$21 billion). This result reflects FDI enterprises’ concerns over the investment and business environment in Vietnam. “Matters relating to investment plan adjustments, administrative reform, legal improvement, supporting industries, human resource quality are considered major obstacles to the Vietnamese business environment by FDI enterprises,” he said.

 

Besides, Dr Tran Dinh Thien, Director of the Vietnam Economics Institute, said: The Vietnamese administrative system has many procedural ‘bottlenecks.’ So, in addition to the reform in administrative papers, the Government needs to improve personnel capacity and strengthen administrative supervision.

 

According to the WB, Vietnam is estimated to need US$70-80 billion for road, railway and port infrastructures in the next 5 to 10 years, and US$120 billion if energy infrastructure is included. Therefore, according the WB, Vietnam must put effort into improving the investment environment to attract FDI and private capital into this field.