Foreign investors and donors are eager to see the Vietnamese government’s clear policies to encourage them to open their wallets.
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Foreign investors are looking for sweeteners to outweigh the bitter investment climate
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A representative of the European Union delegation to Vietnam told the Ministry of Planning and Investment (MPI) at a Hanoi conference last week that many foreign investors and donors were greatly interested in Vietnam’s future economic approach and were waiting for more “positive moves” from the government.
For example, the Ministry of Finance proposed the State Budget Law, issued in 2002, to be amended in 2009, but the amendment was scrapped in 2010 with many questions unanswered.
“The delay in the law’s amendment will continue causing difficulties to foreign donors and investors, including those from the EU, because this law is not transparent now,” he said.
Meanwhile, the European Chamber of Commerce (EuroCham) voiced its concerns over Vietnam’s investment licencing procedures. It cited the Investment and Enterprise laws, under which foreign and local investors must be treated equally. However, the chamber noted different treatment still existed in term of licencing procedures, particularly for foreign investors to set up their first wholly foreign-owned or joint venture enterprises in Vietnam.
A World Bank representative said Vietnam’s 2011-2015 Socio-economic Development Plan was “very important to the World Bank”, which was underway to devise a strategic cooperation plan with Vietnam.
He said the government needed to indentify more specific priorities for the economy over the next five years, especially in view of investment projects.
Australian ambassador to Vietnam Allaster Cox noted that Vietnam needed to focus on some key projects and programmes if it wished to attract more foreign investment “Foreign investors are seeking safe investment destinations for fresh investment,” he said.
MPI Minister Bui Quang Vinh said amid the world’s economic difficulties, foreign direct investment (FDI) tended to move into East Asia including Vietnam. Especially, after the 2009 financial crisis, many financial investors had been seeking new safe long-term investment destinations.
They wanted to invest into infrastructure projects in countries having public-private partnership (PPP) mechanisms and regulations in line with international practices, he added.
He saw the readiness of investment and insurance funds from developed countries to join the PPP market as an opportunity for Vietnam to develop its infrastructure. “Vietnam will be able to be a good destination for more FDI, if it timely grabs the opportunities and issues more suitable FDI attraction mechanisms,” Vinh said.
The MPI statistics showed that FDI inflows into Asia kept rising, from over $500 billion last year to an expected $600 billion this year, mainly into China and India. However, some investors had begun to shift their investment from China to ASEAN countries including Vietnam due to China’s policy on revising up salary.
“Vietnam ... can become a supplying centre for the whole East Asia and a rendezvous for transnational groups and foreign investors, if its infrastructure is developed better,” Vinh said.