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Australian firms high on prospects
The Vietnamese government is reacting appropriately to the current global crisis and the country’s economic downturn, leaving foreign investors confident about Vietnam’s quick recovery capabilities, as well as the country’s medium-term outlook.
Charles Goode, chairman of the Australia and New Zealand Banking Group, said that Australian businesses were impressed with the government’s ability to manage short-term problems while still convincing investors to improve the local business environment for the medium- and long-term.
Goode is part of a delegation of leading Australian companies that came to Vietnam last week to get a reading of the medium-term outlook. The delegation met a number of Vietnam’s high-ranking officials.
Members of the delegation, led by Richard Woolcott, the founding director of the Asia Society Australasia Centre, are operating in the education, banking and finance, steel and oil and gas industries. Most of them, including ANZ Bank, RMIT University, Bluescope Steel and Santos Limited, have already been involved in investment projects in Vietnam.
“I found that all those measures [that the Vietnamese Government is taking] are very well linked to international thinking regarding assisting the poor, subsidising interest rates and handing out stimulus packages,” Goode said.
“The strengthening of the agricultural sector during the downturn is a very good stabilisation measure. Agriculture may not be a high growth sector, but it’s a very solid foundation for the economy. That is what we have seen the Vietnamese government following,” he noted.
In early April, the Vietnamese government launched the second economic stimulus package, subsidising 4 per cent interest rates for the business community for two years. The first stimulus package was issued in late January of this year, which provided a 4 per cent interest rate subsidisation to local firms for 8 months to help cut production costs, maintain manufacturing and to ensure jobs.
The Ministry of Industry and Trade, in early April, proposed a plan to the government to promote consumption of locally-made products, spurring on domestic manufacturing. The major plan’s objectives will be farmers, workers in industrial parks and processing zones and students, who have been prioritised for access to no- and low-interest loans to promote their farms and to purchase machinery and equipment.
“We are very impressed with Vietnam’s resilience and with Vietnamese leaders’ good perception of the global crisis,” Woolcott said. “The Australian firms, particularly those in the delegation, are very confident about the medium-term outlook for Vietnam,” he noted, adding that most Australian businesses had demonstrated a strong and long-term commitment in Vietnam.
ANZ currently has one of the largest foreign financial services operations in Vietnam, and was granted a 100 per cent foreign-owned banking licence in October 2008. The bank recently got a licence to open a third branch in Vietnam, with the first two branches in Hanoi and Ho Chi Minh City.
It intends to open a total of six more branches in the next twelve months in Vietnam, according to Goode.
VietNamNet, VIR
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