The Vietnam Business Forum (VBF) 2009 took place in Hanoi on Tuesday ahead of today’s year-end Consultative Group (CG) Meeting for Vietnam. The Saigon Times Daily spoke with Simon Andrews, Regional Manager of International Finance Corporation (IFC) for Vietnam, Cambodia, Laos and Thailand, co-organizer of the VBF, about the highlights of the forum. Excerpts:The Saigon Times Daily: What is your perception of the current macroeconomic challenges that Vietnam is coping with?
- Simon Andrews: This is a very important time for Vietnam and great opportunities lie ahead for the country. Vietnam’s Government has been widely acknowledged by the business and investment communities for its decisive and effective economic stimulus measures which are yielding positive and stabilizing results. The global economy is showing signs of recovery and no doubt there will be some bumps ahead as we climb out of the recession, but East Asia is leading the way and I believe Vietnam is well-placed for growth and recovery.
What do you see as Vietnam’s main strengths and weaknesses going forward?
- The financial crisis and the ensuing economic slowdown have been a game-change for economies that have been dependent on export markets for growth. Export-led growth has been the driving force behind many Asian economies, but after 20 years, that source of growth is beginning to look vulnerable and the economies of East Asia will have to look to other sources of growth. Vietnam’s low cost and productive labor force give Vietnam continuing competitive advantage in exports, which is likely to persist for at least the medium term. Vietnam is also at the geographic center of the world’s most dynamic region.
While Vietnam’s prospects are good, there are some challenges that need to be addressed. First among them is Vietnam’s infrastructure bottleneck. VBF’s Business Sentiment Survey identified infrastructure as the leading concern for foreign investors looking at investment in Vietnam. There are many models for financing infrastructure, but what is clear is the role for the private sector in developing and financing infrastructure projects. To continue to bring the private sector into infrastructure requires policy clarity and regulatory certainty, as well as a coordinated approach to structuring infrastructure projects to ensure they meet the country’s needs and are well-integrated into Vietnam’s infrastructure platform.
How about the “red tape” problem that remains a deep concern among international and local enterprises?
- After infrastructure, administrative procedures remain a leading concern for business in Vietnam. For many companies, the complexity of administrative procedures and the sometimes uncoordinated and inconsistent implementation of laws and regulations between different authorities can present a serious hindrance to running a successful business. More comprehensive administrative reforms are critical. We strongly welcome and support the Government’s Administration Reform Project – Project 30, and we acknowledge the Prime Minister’s commitment to reduce Vietnam’s administrative burden through Project 30. IFC is working with Project 30’s Advisory Council and its Special Task Force to support reforms of administrative procedures. Within the framework of Project 30, we have also launched a project reviewing business licensing processes that we believe will reduce associated costs and time by 20%. We are confident of the success of Project 30 and that these reforms will streamline development, enhance the country’s reputation as a favorable place for doing business, and consequently raise the level of FDI.
What can IFC do to help the Government and business communities realize a healthy business environment?
- The VBF, which IFC co-chairs with the Ministry of Planning and Investment and the World Bank, has become an important vehicle for policy dialogue between the government and business community. Participation by the highest national authorities in VBF allows the business community to convey its views and concerns in an effective manner and discuss changes in a constructive framework. Regular meetings of VBF help define policy priorities for business development and encourage further investment in Vietnam. One of the most important contributions we can make is to put our money where our advice is and invest in Vietnam’s future. We are a long term investor and committed to our clients throughout business cycles. Last year as the global crisis hit full swing and investors began exiting emerging markets, we doubled our investments in Vietnam and provided much needed liquidity to Vietnam’s export sector. Looking forward, I hope we will be able to continue to play a unique role in providing long term capital and advice to Vietnam’s businesses and engage private sector resources to further develop Vietnam’s infrastructure.(Saigon Times)
