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Localities slow in releasing development plans, business irked
Local authorities have been very slow in programming distribution networks in their localities: to date, only a half of existing provinces and cities have announced plans for retail and wholesale system development, making it difficult for both domestic and foreign enterprises to draw up business plans.
According to Nguyen Thi Nhu Mai, Deputy Director of the Hanoi Industry and Trade Department, according to the draft programme on market system development, which is expected to be promulgated in September, there will be eight big wholesale markets in Hanoi, including two markets at the regional level.
However, he said that Hanoi’s authorities are working backwards, since they are compiling the programme on market system development while the capital’s socio-economic development programme has not been released yet.
But Hanoi, at least, has released a working development programme for market development.
HCM City has also nearly finished programming its market system development. However, Hanoi and HCM City are just two of 30 provinces and cities which have shown such programmes, according to Hoang Tho Xuan, Director of the Domestic Market Department under the Ministry of Industry and Trade.
The tardiness of local authorities has been criticised by businesses, since this has created difficulties for them in compiling investment plans, especially foreign-invested enterprises. Under WTO commitments, local authorities have the right to apply the rule on ENT (economic needs test) to decide whether to allow foreign retailers to set up second and additional retail bases in the same localities. As the regulations on applying ENT remain vague, enterprises fear that they will meet difficulties in applying for setting up retail bases.
Domestic enterprises are also unsatisfied about the tardiness of local authorities in announcing market development programmes, since they do not know how many markets there will be and whether foreign retailers will be allowed to set up retail bases in the localities. This means that domestic enterprises do not know exactly what their competition will look like.
According to Dinh Thi My Loan, Secretary General of the Vietnamese Retailers’ Association, this will lead to the fact that enterprises dare not make investment or make wrong investment decisions.
Speaking at business forums, foreign-invested enterprises expressed concerns that local authorities will be overly strict in applying ENT in licencing foreign retail branches. Meanwhile, domestic retailers have doubts that local authorities, which always try to attract foreign direct investment, may grant licences too liberally.
VietNamNet, DT
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