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Weighing in on the investment climate
Viet Nam has become an attractive and safe destination for foreign investors to do business in recent years, Viet Nam News reporter Thuy Anh sat down with foreign investors to share this view.
Takashi Fujii – Chairman and General Director, Dai-ichi Life Viet Nam (Japan)
I think Viet Nam is an attractive and safe destination for foreign investors. In comparison to other countries in the region, Viet Nam has potential advantages for long-term investments because of its economy, society and political situation. Investors find it appealing because of an aggressive opening up of its market under commitments when it became a member of the World Trade Organisation (WTO), especially in the service industry.
A higher percentage of young people in the population and continually increasing per capita income have led to a higher workload as well as development of the consumer market. In terms of macro-management, the Government is striving to improve administrative procedures, offer more opportunities and help the investment environment by calling for foreign investors.
For Japanese investors in particular, Viet Nam is always an effective and safe environment for investment. A prominent symbol for this faith is the establishment of Dai-ichi Life Viet Nam, the first foreign company with a 100 per cent investment from Dai-ichi Life Japan. We generated profits just after one year of operating here.
Japanese investors used to focus on manufacturing but now they are beginning to diversify into other industries such as services, finance and banking, distribution and others.
Regarding life insurance, the business that our company is operating in, the Government is quite pro-active in their policies to encourage foreign investors as well as active in improving the legal framework for market development. Worldwide, life insurance has had a long history and become increasingly important in people's lives.
But in Viet Nam, it has only operated for the last 10 years. In many business fields, 10 years possibly represents a set-up stage, development stage and stability stage for the industry. However, for the life insurance industry, it is just a fundamental stage. Because this field is still in its infancy, consistency in regulation is sometimes limited. We hope that these problems will soon be improved.
Frankly speaking, Dai-ichi Life Viet Nam and other life insurers have faced many difficulties in the early years of their operation in Viet Nam. These problems are due to the fact that the industry is so new, and life insurance products somehow are a new concept for the people.
Nowadays, we are very pleased that people are more familiar with life insurance products and begin to realise it as one of the most important things for their family.
Khoo Teck Chong, General Director, SetiaBecamex JSC (Malaysia-Viet Nam JV)
The economy is recovering amid the troubled global arena. We agree with analysts that the general current investment climate in Viet Nam, in light of the post-global credit crisis of 2008 and 2009, is one of recovery, which is similar to that being experienced by many other economies. We are pleased to note that despite the current challenges, Viet Nam is expected to register a respectable single digit growth for 2010.
However, the economy is not out of the woods yet. By all accounts, there is neither robust nor quality growth in the developed economies as all recent gains are the result of government stimulus policies (many of which are in the process of being withdrawn). This kind of growth does not drive consumer demand, which in turn will affect an exporting nation like Viet Nam. To compound matters, we now have to confront the sovereign credit crisis in Greece and possibly Spain, Portugal and the UK in the global arena.
These unfavourable external realities, coupled with inflationary anxieties, the twice-depreciated dong and the interest-rate scenario, have prompted us to be cautious like other foreign investors here.
However, caution is not synonymous with a lack of confidence. SetiaBecamex takes a long-term view of our presence here. This is as much a reflection of our confidence in the growth of the nation as it is on the nature of real estate investment. At our EcoLakes project in Binh Duong Province, we will be delivering the first houses to our purchasers in the next few months.
On the role of Government in the real estate arena, it should be mindful of the fact that the property sector has strong multiplier effects on the economy. A review of the various stimulus packages implemented globally in response to the global credit crisis revealed that they all contain policies to spur the property sector. These measures range from subsidies for first-time home buyers to waivers of property-related taxes.
Of course, it goes without saying that we have every confidence in the Government's ability to steer the economy to greater heights. We are sure that the Government is aware of the many options it has when it comes to leveraging the property sector to manage to economy.
Kan Trakulhoon, President and CEO of SCG (Thailand)
Viet Nam's investment environment is still very attractive in the eyes of foreign investors. Despite the global economic crisis, Viet Nam is one of the fastest reformers in the area.
The Government has implemented many important regulatory changes over the past years, which has improved overall business sentiment and facilitated foreign investors, like us, in our operations.
There are more investments now than ever from many developed countries and international enterprises. Thailand, Japan, the US and several European countries are among those that contributed to Viet Nam's growth, particularly through investment projects that created opportunities and strengthened the economy.
We appreciate Viet Nam's governing authority for their efforts of speeding up international economic integration and creating investment stimulus packages, especially the launch of the Enterprise Law which helped reinforce investor protection. Their improved legal framework and the enhanced favourable investment climate significantly benefit foreign investors.
I believe that with the strong support from the Government of Viet Nam, coupled with an abundant labour force and rich natural resources, the countty remains highly competitive and attractive to foreign investors.
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