~ Le Viêt Nam, aujourd'hui. ~
The Vietnam News

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Vietnam's lawmakers debate revised foreign investment law

HANOI - Vietnamese lawmakers have launched a spirited debate on a revised foreign investment law intended to reverse the dramatic drop in foreign direct investment into the country, local media reported Friday. The amendment aims to offer foreign investors more financial incentives while reducing red tape. Some Vietnamese lawmakers are worried whether the revisions in the law - the fourth set of changes since it was passed in 1986 - address the real problem, the reports said.

"Foreign investors do not dare to invest. Maybe not because of the law, but because of our administrative procedures," Do Xuan Cong, a representative of the central coastal province of Khanh Hoa was quoted as saying in Thanh Nien (Youth) newspaper. Vietnam's National Assembly debates are closed to foreign journalists except for the opening day of the month-long session. The current session began Tuesday. The revisions include lower taxes on profits remitted overseas, lower value-added tax on imported goods not available locally, and streamlined procedures for an investment license. Financial analysts have privately said the changes don't go far enough in addressing the concerns of foreign investors, who have long complained of unwieldy red tape, double-tiered pricing, a nebulous legal framework and the lack of financial transparency.

Investment Plummeting Since Hitting Peak In 1996

Foreign direct investment into Vietnam, which boomed in the early to mid-1990s, has declined sharply from a high of more than $8 billion in 1996 to under $2 billion last year. The Vietnamese government blamed the 1997 Asian economic crisis, stating that 70% of foreign investment came from Asian countries. According to the government report given during the National Assembly's opening session on Tuesday, newly registered foreign investment in the first four months stood at only $260 million, down 55% from the same period of last year. Hanoi officials have stated that investment laws in Vietnam are liberal compared to other Asian neighbors, but admitted that implementation of those laws is another matter.

"Compared with the law on foreign investment in other countries in Asean, our revised law on foreign investment is more attractive," Minister of Planning and Investment Tran Xuan Gia was quoted as saying in Thanh Nien newspaper. "However, the main problem here is not the law itself, but the law's implementation." Asean is the 10-member Association of Southeast Asian Nations.

One legislator from Hanoi, Quach Dang Trieu, cited the case of an investor who had to wait an additional two years to get the necessary licenses from 21 different government agencies after he had already obtained the principal investment license from the Ministry of Planning and Investment, reported Nhan Dan, the official paper of the ruling Communist Party.

Associated Press - May 12, 2000.