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.
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