Foreigners say Vietnam investment easier, not easy
HANOI - Starting up a business in Vietnam has become easier but the communist country needs to improve its infrastructure, worker skills and business regulations, executives from its largest foreign investor Singapore said.
When Teo Yak Long, vice chairman of shipping firm First Logistics Development Co, started a project to build a terminal in 1993, it took one year to get a business licence.
This year, when he was setting up a joint-venture firm, "within four weeks" the licence was issued, he told a conference showcasing fast-growing Vietnam to foreign investors that was funded by the Singapore government.
Asia-Pacific Breweries Ltd. , which produces Tiger and Anchor beer and also began operations in Vietnam about a decade ago, has invested some $210 million in two breweries.
Diversifying out of Singapore's small market, the company sees Vietnam, with its modest consumption of foreign beers, as having "enormous potential", Joseph Lim told an audience of about 500 business people from Asia.
But he said major sticking points were infrastructure, including poor roads and power supply as well as weak language skills among local workers, especially in English.
"That's going to take a while, so you have to be patient," he said.
Teo had the most critical comments among the panelists, who included a consultant from Singapore government investment vehicle Temasek and the head of U.S. diversified company Gannon Vietnam Ltd. Temasek was a co-funder of the conference.
Teo said foreign firms sometimes faced discrimination, written guidelines were often subject to varying interpretations and start dates for projects were unclear, resulting in cost overruns.
Getting a business licence in Vietnam was like getting a key to enter a room, but once you got into the room "the room is very messy, and you need to get more licences before you can clear up all the rooms".
Singapore has invested in 307 projects with total registered capital of more than $7.8 billion as of June 2004 in Vietnam, which has posted economic growth of an average 8.2 percent over the past 10 years.
Nearly absent from the presentations meant to highlight examples of long-term, happy foreign investors in Vietnam was the topic of corruption.
Foreign investors and aid providers cite graft as one of Vietnam's most serious obstacles, prompting Hanoi in the past few years to punish high-ranking officials and state company executives and to prosecute a notorious mafia gang.
Asked if corruption had become a non-issue for business, Walter Blocker, managing director of Gannon, said graft was still a problem, but added, "Sometimes we confuse corruption with inefficiency when it takes longer to get things done."
Vietnamese Prime Minister Phan Van Khai vowed at the opening of the two-day conference on Tuesday that Vietnam was committed to opening up its economy and to implementing economic reforms.
Reuters - August 18, 2004.
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