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Investors discuss business climate
Foreign and Vietnamese investors sat down together yesterday at a Viet Nam Business Forum (VBF) in the capital to outline five recommendations for the Vietnamese Government to improve the business climate in the country.
The forum was held two days before the opening of the Consultative Group (CG) meeting for Viet Nam, scheduled tomorrow and Friday, which will focus on macro-economic stability, restructuring the economy for post-crisis growth and improving public administration.
Poor infrastructure remained the greatest hindrance to domestic and foreign investors, participants said.
Nearly 88 per cent of foreign enterprises and 83 per cent of domestic companies saw infrastructure as either "bad" or "very bad." The message therefore, is that the Government must take stronger action to improve infrastructure to investment and exports.
Promotion of private-public partnerships (PPPs) in infrastructure development through the establishment of a legal framework and development of appropriate institutional mechanisms for PPPs would be a welcome solution, the forum heard.
Thomas Siebert, chairman of AmCham, told participants that private sector participation in infrastructure development, finance and management was urgently needed, especially in power generation and deep-water seaports.
There were still deficiencies and delays in development of key infrastructure, especially inter-provincial roads, bridges, electric power plants, strategically located seaports and land-side infrastructure, and intra-city public transport, such as light trains, he said.
Alain Cany, chairman of EuroCham, said the Government’s focus on fiscal stimulus packages might have distracted Viet Nam from general reforms. He said he believed that the Vietnamese Government should not get "side-tracked" by the short-term rebound, but focus instead on the fundamental constraints to the economy’s competitiveness.
In general, he said the correct course for the Government was to accelerate structural changes within the economy to enhance productivity and maximise the nation’s growth potential.
Simon Andrews, International Finance Corporation regional manager, told participants that investors expected that 2010 would be better for Viet Nam. For the first time, issues on macro-economy management, information access, legal documents, capital approach and business expenses were said to have greatly improved the country’s business climate.
In the long-term, enterprises are generally positive about the country’s business environment over the next three years. Business conditions and the environment in 2010 received an average score of 2.62/4, with positive expectations increasing for 2011-12, he said.
However, other issues that worry enterprises include the return of inflation, foreign exchange rates and scarcity of foreign currency. Changes resulting from recently issued tax policies were also drawing concern, especially from the resources sector, Andrews said.
Many also expressed concern about the uncertainty and delay caused by poor implementation of rules and regulations by government agencies – particularly at the local level.
Delays in reform of State-owned enterprises (SOEs) and policies favouring SOEs and slow disbursement of foreign direct investment were also a source of concern.
Tran Vuong Anh, vice chairman of the Ha Noi Young Business Association, said that the credit, foreign currency and gold markets were currently experiencing very complex and unpredictable movements, which in turn affected both State-owned and private enterprises.
"We are concerned that the currency, stock, gold and real estate markets have not been consistently regulated," Anh said. "As a result, each fluctuation in the world market is affecting speculation on these markets and manufacturers are unable to control production input, while export earnings can be zero or even negative."
The IFC and the Ministry of Planning and Investment co-hosted the Viet Nam Business Forum.
VietNamNet, VietNamNews
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