Vietnam plans to woo investors
HANOI - Vietnam is setting out to improve its investment environment in the
face of an expected slump in worldwide foreign direct investment (FDI), official media
reported on Thursday.
The Vietnam News newspaper quoted Planning and Investment Minister Tran Xuan
Gia as saying Vietnam hoped to match 2001's foreign investment pledges of $3.01
billion this year.
But given an anticipated worldwide FDI slowdown, Vietnam would have to continue
efforts to improve its environment, he said.
"Countries that have the lowest investment costs and the most stable socio-political
situations will be the most successful," the paper quoted him as saying.
Although communist-ruled Vietnam pressed ahead with market-oriented reforms in the
past year, it still has a long way to go in the eyes of many investors.
Last month, a survey of expatriate executives in the Asian region found Vietnam was
viewed as the least hospitable destination for foreign investors out of 12 Asian
economies.
It has also scored badly in terms of stress levels for expatriates, coming in third from
bottom in a survey by the Hong Kong-based Political & Economic Risk Consultancy
(PERC).
Analysts say that although Vietnam has addressed some investment disincentives, for
example by easing obstacles to repatriation of profits, its legal framework remains
erratic and corruption and red-tape help create a generally hostile environment.
Vietnam News quoted Gia as saying that his ministry planned further harmonisation of
laws on foreign and domestic investment in order to level the playing field for all
participants.
The ministry also called for foreign invested enterprises to be allowed to become
shareholder firms and for new methods to foster cooperation between state and
private enterprise, he said.
Other strategies included further reform to currency exchange and taxation rules, cuts
to telecommunications and electricity costs and further simplifications in investment
application formalities, Gia said.
The minister said Vietnam's stability had been recognised as a benefit for foreign
investors, a reference to a PERC survey released in October that showed the country
was seen as the safest place in the region in which to operate.
A historic trade agreement with the United States, that went into effect in December, is
expected to prove an important catalyst for foreign investment by exporters wishing to
take advantage of Vietnam's cheap and plentiful labour.
Reuters - January 03, 2002.
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