AmCham Statement at HCM City Party/Government-Business Dialogue, Dec 20, 2006

Tiếng Việt – Vietnamese

Statement by Walter Blocker
Chairman, AmCham Vietnam in HCM City

Ho Chi Minh City
Party/Government-Business Dialogue
Rex Hotel, Ho Chi Minh City
20 December 2006

Mr. Le Thanh Hai, Secretary of the HCM City Party Committee
Mr. Le Hoang Quan, Chairman of the People’s Committee of HCM City

Thank you for the opportunity to participate in this Party/Government-Business Dialogue to discuss business conditions and economic and social development.

I am Walter Blocker, this year’s Chairman of AmCham in Ho Chi Minh City, which represents over 350 companies, over 700 staff, several billion US dollars in investment in the manufacturing, infrastructure (oil), and service sectors, and hundreds of thousands of direct and indirect Vietnamese employees.

I’d like to highlight five key areas of interest.

1. Trade and Investment Laws and Regulations – WTO and PNTR

Congratulations to all on Vietnam’s WTO Accession. After a number of years, during which we supported and encouraged Vietnam’s efforts, the WTO General Council approved Vietnam’s membership agreement on November 7, Vietnam’s National Assembly ratified the agreement on November 28, and Vietnam will become a WTO member on January 11, 30 days after the official notification to the WTO.

And the U.S. Congress approved the Vietnam PNTR legislation on December 8 and 9, while the President will sign the legislation into law on December 20.

Congratulations also to Vietnam, the Central and Local Governments, and the Vietnam Chamber of Commerce and Industry on hosting the very successful APEC 2006, culminating with the APEC Leaders Summit and CEO Summit in November.

2. Labor-Business-Government Relations

Looking to the future, a key issue is to develop constructive labor-management-government relations, which should be based on cooperation and communications, with full protection of workers’ rights, and implementation of Vietnam’s Labor Code. This is important now in the apparel and other light-manufacturing sectors, but it is also important in the future as Ho Chi Minh City seeks to promote additional “higher-value-added” investment.

Developing a work force with appropriate education and training, and cooperative labor-management-government relations are important factors for attracting FDI.

Vietnam’s reputation as a favorable destination for FDI received a black eye in January 2006 because of widespread illegal strikes with violence. AmCham sent a letter to local authorities, with suggestions to improve Labor-Management-Government Relations, at that time.

3. Physical Infrastructure – especially Seaports and Electric Power

Transport infrastructure is another key factor for firms considering investment.

Infrastructure constraints threaten FDI for manufacturing and export. Private sector participation in infrastructure development, finance, and management is needed urgently, especially in electric power and deep-water seaports.

Port congestion is particularly acute in the Ho Chi Minh City area, area where FDI has been concentrated. In 2004, HCMC accounted for 78 percent of Vietnam’s container shipments.

Demand will begin to exceed terminal capacity next year. The situation will worsen in 2008 and 2009 before the deep-water terminal at Cai Mep becomes operational.

AmCham member firms have submitted recommendations and proposals on both seaport and electric power projects. We request that the authorities allow and encourage this private sector participation in infrastructure development.

4.Anti-Corruption Action Plan

Vietnam has made good progress since the State Inspector General signed an Official Letter on June 16, 2004 announcing that Vietnam endorses the Anti-Corruption Action Plan for Asia and the Pacific.

We appreciate progress on two of the three pillars of the Action Plan:

  • Supporting Active Public Involvement. Government leaders, media and public have exposed and strongly condemned corruption. And have named corruption an *“internal enemy.”*
  • Strengthening Anti-bribery Actions and Promoting Integrity in Business Operations. The Government has removed corrupt officials and initiated appropriate punishment.

However, there is room for improvement on the third pillar:

  • Developing effective and transparent systems for public service.

Existing systems are inadequate to prevent corrupt officials from misappropriating public funds.

We suggest that the Party and Government strengthen preventive measure such as

Independent Assessor for any public infrastructure project funded by ODA; and a

Public Infrastructure Investigation and Prosecution Unit to investigate and prosecute corruption involving ODA-funded public infrastructure.

5. Cooperation in Investment Promotion Activities

AmCham supported missions in 2006 by the HCM City People’s Committee to New York and San Francisco, and by the Dong Nai People’s Committee to Orlando, in Florida, and Los Angeles.

Partly as a result of these missions, Vietnam’s WTO accession and the APEC Summits, we in AmCham have received an increasing number of visits by U.S. companies interested in investing in or sourcing from Vietnam.

We were all pleased with decision of Intel’s decision to invest up to US$ 1 billion in Saigon Hi-Tech Park for its seventh global chip facility.

And a number of large U.S. financial companies have also come to discuss financial investment in infrastructure projects such as bridges, industrial estates, power plants and seaports.

Nearly 40% of total global FDI in 2004 was from the U.S., according to the OECD, and we in AmCham look forward to working with the local government authorities to attract more U.S. FDI to Vietnam.

FDI and Trade, attracted by Good Government, promote growth, economic/social development

In closing, let me remind you again that, as we in AmCham believe and a World Bank study confirmed in 1998 , it is foreign direct investment and trade that promotes growth.

Countries, regions, and cities need good economic policies and a good legal and regulatory infrastructure to attract FDI, promote trade, and spur economic and social development.

We appreciate this opportunity to participate in the Party/Government-Business Dialogue, and the leadership of the Department of Planning & Investment, the Service of Trade, the Service of Foreign Affairs, and the Investment and Trade Promotion Center of Ho Chi Minh City, in facilitating communication between business and the party/government.

I wish good health to the Party Secretary and the Chairman of the People’s Committee, other leaders of the Departments, representatives of business associations and the consular corps, and all of the Representatives here today.

Thank you.

Tiếng Việt – Vietnamese

Notes and Background Information

1. Letter to the Chairmen of the People’s Committee of Ho Chi Minh City, Dong Nai, Binh Duong, January 11, 2006.

2. “Anti-Corruption Initiative in the Construction and Engineering Industry,” Transparency International (UK), September 2003, pp 26ff.

3. “Making aid work,” The Economist, 12 Nov 1998. Review of “Assessing Aid: What Works, What Doesn’t, and Why,” published by the World Bank.

World Bank – Summary

World Bank – About the Report

World Bank – Overview

World Bank – Table of Contents and Full Report: “Assessing Aid: What Works, What Doesn’t, and Why

Press Coverage

Private sector plays a key role in Southern hub, Vietnam Investment Review, 15 Jan 2007

City focuses on business climate, Vietnam News, 21 Dec 06

Southern metro gets serious about business climate, Thanh Nien News, 21 Dec 06

City leaders say will speed up infrastructure facelift, Saigon Times, 21 Dec 06

Foreign investors suggest solutions to improve HCM City’s business environment, HCM City Government web site

Năm giải pháp cải thiện môi trường đầu tư, Báo Người Lao Động, 21/12/2006

Other International Business Association Statements

European Chamber of Commerce in Vietnam (EuroCham)

Hong Kong Business Association in Vietnam (HKBAV)

Japan Business Association in Ho Chi Minh City (JBAH)

Korean Chamber of Commerce in Vietnam (KoCham)