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Amcham says Vietnam is top ASEAN investment destination
Vietnam is considered the leading country for investment in ASEAN by many U.S. companies, executive director of the American Chamber of Commerce (AmCham) in HCMC Herb Cochran told the Daily in a recent interview.
The year 2009 marked a surge in interest of U.S. investors in Vietnam, when the U.S. led 43 countries and territories investing in Vietnam with total capital of US$9.8 billion. In addition, U.S. investors snapped up 56% of Vietnam’s international bonds in an issue of US$1 billion in early 2010, he said.
Recently, many U.S. companies have adopted a business strategy called “China plus one” or “China and India plus one,” said Cochran. He explained that many U.S. companies already have several factories in China or India, and they want to put their next factory in ASEAN, and often Vietnam is considered the leading country for investment.
Cochran noted that ASEAN has been a leading trading partner for the United States, almost equal to China in the year 2000, and a bigger export market than Japan in 2009-2010.
Usually “investment follows trade,” so that is one major reason that U.S. investors are interested in Vietnam. As Vietnam is the Chair of ASEAN in 2010, the country would attract favorable attention and additional investment, said Cochran.
The Executive Director said real estate, hotels, and tourism are key infrastructure sectors to support international business and globalization, so there are a number of U.S. investments in these sectors in Vietnam.
Vietnam is an emerging market that offers tremendous opportunities for growth. Therefore, other companies, especially in the manufacturing sector, including electronics and automotive are looking at Vietnam as a potential location for a new factory as the world recovers from the global recession, he added.
Cochran, however, thinks there’re still barriers to attracting FDI to Vietnam, including small market, inadequate infrastructure, labor relations, shortage of a quality work force and inefficient procedures.
“Neither Vietnam, nor ASEAN, is as attractive as they could be, because of the lack of a single, large regional market, with common standards, customs duties and procedures,” he explained.
Besides, Vietnam’s FDI promotion incentives do not include a “work force development” component, but focus largely on financial and tax-holiday incentives. Foreign investors are also discouraged by inefficient government administrative procedures which are expected to be cut off by the Prime Minister’s “Project 30 - Advisory Council on Administrative Procedures Reform,” he said.
VietNamNet, SGT
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