Vietnam regards foreign investors’ success as its own: leader

Thien Thanh Sanitaryware joint company

Vietnam regards foreign investors’ success as its own: leader

Vietnam welcomes foreign businesses’ stable and long-term investments and operations and considers their success as its own, Prime Minister Nguyen Tan Dung said at the Vietnam Global Investment Forum in Hanoi on September 30. The forum took place amidst an array of opportunities and challenges facing the global and Vietnamese economies, he said, adding that the local Government will make concerted efforts to optimise the country’s development potential.

In his speech, the leader noted that after 30 years of “doi moi” (reform) efforts, Vietnam has transformed from a war-torn country into a middle-income nation. From 1986 (the first year of “doi moi”) to 2010, Vietnam continually recorded a GDP growth rate of about 7 percent per annum. The rate hovered around 6 percent between 2011 and 2015 and is expected to exceed 6.5 percent this year.

It was among the few countries which maintained continuous economic growth during the thirty years and the scale and strength of its economy have been incessantly improved.

Vietnam is entering a new era of development with a stable macro-economy, faster growth pace and lower inflation, PM Nguyen Tan Dung said, adding it targets a GDP growth rate of 6.5-7 percent and a trade increase of 12-15 percent annually between 2016 and 2020. Trade is hoped to approximate 600 billion USD in 2020.

At present, foreign direct investment registered in Vietnam totals about 270 billion USD, poured into over 19,000 operational projects run by investors from 105 countries and territories. Up to 135 billion USD of that sum has been disbursed.

More than 17 billion USD in foreign direct investment was registered in the first nine months of 2015, a year-on-year rise of 53 percent, and around 10 billion USD was disbursed, a yearly gain of 8 percent. A number of multinational groups, including those from Europe, are prospering in the Southeast Asian nation, the leader stressed.

At the forum, he highlighted that Vietnam and its neighbours are striving to form the ASEAN Economic Community later this year. The grouping is a dynamic market with a combined population of 625 million and GDP of around 2.5 trillion USD, forecast to reach 10 trillion USD by 2030.

Vietnam has signed 10 free trade agreements (FTA), the latest of which were inked with the Republic of Korea and the Eurasian Economic Union earlier this year.

It is the first ASEAN country to conclude an FTA with the European Union; the deal is scheduled to be signed in late 2015. The nation has also essentially concluded bilateral negotiations with 11 partners joining in the Trans-Pacific Partnership (TPP) agreement talks, the PM underlined.

The FTAs have opened immense free trading space between Vietnam and 55 partner countries, including G7 and G20 members, he added.

Vietnam is well aware that the achieved results have not matched its potential and could be improved, the Cabinet leader noted, admitting certain shortcomings in the local business climate. The Government is exerting all efforts to employ concrete measures, ultimately addressing challenges and utilising favourable conditions to attain rapid and sustainable development.

PM Nguyen Tan Dung affirmed his country’s determination to bring business climate-related indexes, including those on taxation, customs, social insurance, construction and land and electricity access, on par with averages in Singapore, Malaysia, Thailand and the Philippines in 2016.

In his speech, he said Vietnam is reforming public investment procedures to facilitate domestic and foreign investment in infrastructure development, prioritising high-tech projects and those accompanied by supporting industries and services.

A decree on public-private partnerships (PPP) has been enforced to help attract private sector engagement in infrastructure building, especially through foreign direct investment. The country will publicise projects in traffic, energy, water supply, waste treatment and urban facility construction which are calling for investment under the PPP form as soon as possible.

During more than 20 years of restructuring State-owned enterprises (SOEs), Vietnam has slashed the figure of over 12,000 SOEs by around 90 percent. Since 2011, it has equitised 350 SOEs and is now speeding up the restructuring of major State-owned groups and corporations.

More restructured SOEs will be listed on stock exchanges, a chance for foreign firms to conduct mergers and acquisitions (M&As), the leader emphasised, adding that the nation welcomes foreign groups with good financial, technological and market strength to participate in SOE equitisation and M&As.

He also mentioned the local financial market at the forum, which is being aligned with global equivalents, elaborating that Vietnam has widened the foreign investor ownership rate in Vietnamese listed companies and lifted barriers to their investment in Government and corporate bonds.

The one-day event centred on Vietnam’s accelerating growth, foreign direct investment prospects, the development of capital markets, equitisation and privatisation of SOEs, real estate, investment in agriculture and infrastructure development sponsorship.