~ Le Viêt Nam, aujourd'hui. ~
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What makes HCM City different ?

When the managing editor of The Saigon Times Weekly contacted me to write an article on the investment potential of HCM City, my initial reaction was to focus on the usual attractions that Vietnam has to offer - a growing economy with a growing private sector, a stable political framework, a highly literate and young population, and so on...

... And yet to write about Vietnam generally does not do HCM City justice. HCM City currently has more than double the number of foreign-invested projects of any other province in Vietnam. If Vietnam is attractive to foreign investors then what is it about HCM City that has made it so successful to date? First and foremost, credit must be given to the People's Committee of HCM City for the manner in which the People's Committee and its departments assist and encourage foreign investors in HCM City.

In May 2000 the Australian Business Group held an Investment Forum in HCM City to coincide with the opening of the My Thuan Bridge. It had been a considerable time since such a forum was held and there were many who were skeptical about its success. Foreign investment in Vietnam in 1999 was down 60% on 1998 and the short-term future looked bleak. The then Vice-chairman of the People's Committee, now chairman, Mr. Le Thanh Hai, was invited to deliver the opening address at the forum with the Australian Minister of Foreign Affairs, Mr. Alexander Downer, delivering the closing address. Mr. Hai spent considerable time before the forum learning of issues that were of concern to those attending in order to prepare a specific and targeted address. After delivering his address he remained to hear the presentations of every other speaker, including representatives of Foster's and Royal Melbourne Institute of Technology, who were then relatively new investors based in HCM City, and who are now major investors. It is doubtful whether the chairman of any other city in the world would devote such time and effort to a similar forum.

Secondly, it is one thing to have leadership that encourages foreign investment but it is another thing to have that leadership support at a departmental level. In HCM City the officers of the Department of Planning and Investment and the Department of Trade, the two departments that regularly deal with potential new foreign investors, display the same enthusiasm and commitment shown by the city's leadership. When meeting with foreign companies they demonstrate a clear willingness to provide assistance wherever possible. Foreign investors find this refreshingly contrary to the occasionally negative international press Vietnam's bureaucracy receives. Further, unlike some cities and countries their enthusiasm does not diminish once capital is invested. Instead, they are there ready to advise when a foreign investor does encounter difficulties in the implementation of a project.

Thirdly, one cannot overlook the people of HCM City who go about their daily lives with an energy and a vibrancy that any new visitor to the city cannot help but comment on. They create a sense that nothing is impossible. So, perhaps the question as to what opportunities are available to foreign investors in HCM City should be turned around to read what opportunities are not available. HCM City's location creates some enormous opportunities for exporters, the size of the domestic market has great potential for manufacturers, these combined with the growing tourism industry result in considerable opportunities for construction companies and property developers, and all of these combined excellent work for service companies.

This is not to say that success is easy. The decline in foreign investment in the late 1990s is ready evidence of this point. Investors in HCM City need to learn from the mistakes of some of the investors at that time. Thorough market research needs to be done to determine the feasibility and viability of a project. HCM City has changed dramatically in the past ten years and business plans need to take into account that the pace of change is likely to be constant. There are significant benefits to be gained from cooperating closely with a Vietnamese partner but foreign investors need to be certain that they share the same objectives and ambitions, and have the same expectations, as their Vietnamese partners.

By Damian Clowes/PricewaterhouseCoopers - The Saigon Times Weekly - September 07, 2002.