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Vietnam will be a very attractive manufacturing base: IFC Regional Manager Simon Andrews

International Finance Corporation (IFC), an arm of the World Bank, has committed this year to investing US$ 800 million in Vietnam, more than double the amount in 2010. The Saigon Times Daily spoke with Simon Andrews, IFC Regional Manager for Vietnam, Laos, Cambodia and Thailand, on the company’s investment priorities in Vietnam. Excerpts:

The Saigon Times Daily: What are the investment priorities of IFC in Vietnam?

Simon Andrews: It is really around economic development. Our primary mission is to support the development of the private sector, since this is a sector that creates jobs and opportunities for people. We’re involved in three areas. One is in banking. By developing commercial micro-finance models, and increasing banks’ lending capacity, we help improve the access to finance for individuals and small and mid-sized companies.

The second area is infrastructure, both physical infrastructure and soft infrastructure. Over the next ten years Vietnam probably needs to invest about US$200 billion in building roads, ports, power stations, and water treatment facilities. And about half this amount of money will need to come from the private sector. So Vietnam has to develop new models for financing those kinds of projects. PPP, which is beginning to move, can be a solution. Within the second area is soft infrastructure and we invest in projects that can help improve the quality and access to education, the quality and access to health services.

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Vietnam looks to slash public spending

HANOI. Mar 31, 2011. Vietnam is expected to cut public investment by 50 trillion dong ($ 2.4 billion) or 7.4% this year, the central bank said Thursday, in its latest attempt to restore economic stability.

Prime Minister Nguyen Tan Dung, who met with state officials late Wednesday to review the implementation of anti-inflation measures announced last month, asked ministries, provinces and industries to reduce their investment capital in various projects, the central bank said in a statement posted on its website. By reducing investment levels, authorities are hoping to curb the amount of cash circulating in the economy, which in theory should cool growth and help bring inflation down.

Economist Vuong Quan Hoang from Hanoi-based DHVP Research & Consultancy said the government will find it very difficult to cut such a large amount of spending because many of the projects are run by groups with connections to government officials. “It’s not in interests of anyone to cut off the funding,” the economist said.

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