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Business optimism a key catalyst for growth
Most Vietnamese businesses are now optimistic about the future, and this positive sentiment is the key factor that will drive the economy upward, says Dr. Matthias Duehn, director of the EuroCham Hanoi Office.
How do you assess the position and potential of Vietnamese firms in the Southeast Asian region?
Matthias Duehn: I believe that Vietnamese companies are becoming better known in and around the region; names such as Vinamilk, Vietnam Airlines and PetroVietnam already have a very good reputation outside of Vietnam.
We have already seen a number of Vietnamese companies investing in the Southeast Asian region, for example Viettel and Vinamilk. More and more Vietnamese companies are contemplating listing on foreign stock exchanges, for example in Singapore and even beyond: On September 18, Cavico Corporation, a major infrastructure development company based in Hanoi, was permitted to list its common stock on the NASDAQ capital market, thereby becoming the first Vietnamese company listed in the United States.
This is a strong signal that Vietnamese companies have the potential and the courage to enter foreign markets. However, this trend is still in its early stages and Vietnamese companies still need to address a number of challenges when competing outside their countries as the competition is also tough. For example, products need to be more customized to the needs of overseas markets.
To this end, Vietnamese companies will have to learn more about market trends in the region and spend more money on market-related research and development. Despite the challenges, I believe that, in a few years, Vietnamese companies will be able to compete with major companies throughout the region.
Asia, including Vietnam, is tipped to overcome the impact of the global financial crisis the soonest. How do you assess the role of Vietnamese businesspeople in helping the country gain this achievement and overcome the crisis? Please share your thoughts on the way Vietnamese firms are overcoming the crisis, compared to those taken by Asian and European companies?
I see that the Vietnamese economy is quite resilient compared to other neighboring economies in the region. This is largely attributed to the government’s intervention early this year with a first stimulus package, and now a tentative second.
Other markets, for example the financial services industry, have not been fully exposed to the crisis in the first place. As a result, despite the crisis, growth for 2009 is still projected at around 5 percent, and the outlook for 2010 is well over 6.5 percent.
So, as a matter of fact, Vietnam has tackled the crisis quite well! Most Vietnamese businesses are now optimistic about the future. This positive sentiment is the key factor that will drive the economy upward.
How do Vietnamese businesspeople demonstrate social responsibility in terms of environmental protection, poverty reduction and such?
We have noted a substantial shift in awareness of corporate social responsibility (CSR) amongst Vietnamese companies. No doubt the Vietnamese business community should play an active role when it comes to CSR.
It has to be understood that CSR is not a charity, but can actually profit the companies themselves. To this end, EuroCham is involved in a UNIDO project aiming at improving
Vietnamese SMEs in implementing CSR to reach the global supply chains for sustainable production.
With regard to environmental protection, EuroCham focused in 2009 on the topic of Green Business and Climate Change. For example we organized a high-profile exhibition and conference called Green Biz in September in Hanoi. We have received a high level of attention from both the government and the local businesses who visited our exhibition.
With regards to poverty reduction, we know that Vietnamese companies have been taking a more active role in joining forces with the government to make a difference in remote and isolated areas.
I think the government should devise more favorable policies to enable these companies to invest in those areas and create jobs for people. If the business community pays attention to the less developed areas, then we can possibly reduce the poverty gap in this country according to the Vietnamese government’s socioeconomic strategy.
What is most important in promoting the role of businesspeople in economic development?
EuroCham has always believed in the long-term development opportunities of Vietnam. The economic data was and remains promising, despite the impact of the economic crisis.
With growth still at almost 5 percent and projected to be well over 6.5 percent next year, Vietnam is back on track already. In particular, with a young and eager population, two thirds of which are under 35, Vietnam has a great pool of talent to contribute to its future success.
EuroCham believes that, to attract investment, three core issues matter.
The first is infrastructure, which is not only limited to roads, seaports and airports, but also includes [sustainable] power generation and power supply, and forms the basis of [foreign] investment.
Second is education. Even with an impressively young and eager population, work processes and demand for labor get more complex and sophisticated. Formerly simple manufacturing jobs now often require solid skills. Accordingly, it is important that the educational institutions improve to meet these standards and cooperate with the companies that require these skills.
Third is favorable government policies. It is important that the provincial government provide transparent rules for potential investors to rely on. Incentives for investment, in particular tax incentives, must be clear and applied predictably.
What does EuroCham do to help firms overcome the impact of the crisis, as well as develop in the post-crisis period?
We are a 10-year-old-plus business chamber established in Vietnam in 1998 with offices in Hanoi and Ho Chi Minh City. Now we are one of the largest foreign business associations in the country, with over 600 member subscriptions and 1,200 chamber representatives.
Open to individuals, companies and organizations of all nationalities, we offer a wide range of benefits and services to make doing business with Vietnam easier. Through our regular business and networking events, sector committees, lobbying and advocacy, EuroCham plays an important part in making Vietnam an attractive destination to do business while ensuring our members’ interests are placed first and foremost.
On an annual basis we publish the White Book on trade and investment issues and recommendations filed by European businesses, welcomed by the government as a constructive contribution to Vietnam’s economic development.
Another important activity of EuroCham is the Vietnam-EU Business Forum (VEUBF), a cooperative venture between EuroCham and the VCCI, formed at the behest of the Prime Minister. In the past two years this forum has been quite active in transferring the best European business practices to Vietnamese companies as well as networking them together.
Bao Van
thanhnien
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