Vietnam is still a promising destination for foreign investment in 2013, but the Government needs to urgently create a business environment friendly to investors if the country is to continue attracting foreign direct investment.
The year 2013 will see many other countries emerging as competitors in attracting investment, representatives of foreign business associations in Vietnam said.
Urgent need for improvements
Kim Jai Woo, chairman of the Korean Chamber of Commerce in HCMC (KoCham), told the Daily in an interview via email that the global financial crisis had lasted since 2008, but the global economy is expected to recover in 2013.
As China is cutting investment incentives for foreign companies, more Korean investors this year will come to Vietnam in areas of manufacturing and infrastructure, such as ports, bridges, and roads, said the KoCham chairman.
Nevertheless, if Vietnam fails to create an agreeable environment, Korean firms will shift their production to other countries, he added. There’re now about 2,500 Korean businesses operating in Vietnam.
Herb Cochran, executive director of the HCMC Chapter of the American Chamber of Commerce in Vietnam (AmCham), said Vietnam is no longer the top-rated investment destination for U.S. companies, since Indonesia, Malaysia, Bangladesh, and even Myanmar seem to attract more interest these days.
While many U.S. firms are successful in Vietnam, a growing number of AmCham companies are finding it more difficult to conduct business here than in the past years. Recent moves by the Government have caused numerous investors to rethink their business and expansion plans in Vietnam, Cochran said.
“Non-market administrative decisions on which items can be imported, how products can be priced, who can work in Vietnam, which programming can be broadcast on television, who can provide health care, and much more have contributed to a perception that investors are not welcome in Vietnam,” he added.
Given the current state of the economy, Vietnam should make every effort to entice foreign investment and resources. To retain existing and attract new FDI, Vietnam’s Government needs to listen to existing FDI companies, according to the representative of AmCham.
“We meet regularly with the Government in the Vietnam Business Forum and other consultations opportunities to discuss what the Government and businesses could do to attract more U.S. FDI,” said Cochran. “Unfortunately, not many of our recommendations have been accepted in recent years, nor have many recommendations from other foreign business associations or international experts,” he said.
In addition, Kim Jai Woo from KoCham added that the Government needs to pay more attention to decisive factors concerning investment, such as curbing production cost increase.