On 4 July 2018, EuroCham chaired the mid-term session of the Vietnam Business Forum (VBF), together with the Vietnam Chamber of Commerce and Industry (VCCI), with the theme “Linkage between domestic and FDI businesses – partnership for mutual benefit”.
The conference, co-organised by the Ministry of Planning and Investment; the World Bank; the International Finance Corporation; and VBF’s management board, had sessions on value chains, addressing technological challenges, and financial resources for sustainable development. It was attended by around 300 delegates from Government, embassies, associations, private businesses and policy experts.
The Minister of Planning and Investment, Mr. Nguyen Chi Dung, opened by highlighting the economic achievements of the last 30 years since the first FDI legislation in Vietnam. He described how the business community, comprising both foreign-invested and domestic enterprises, has grown to become an important driving force for economic development. The foreign-invested sector has made considerable contributions to Vietnam’s economic development and created many jobs. However, the links between foreign-invested and domestic firms need to be strengthened.
Tomaso Andreatta, VBF Co-Chair and Vice-Chairman of EuroCham, moderated the conference. He addressed the need of domestic companies to enhance their size, know-how and experience to be successful in international markets and to produce top-quality products at competitive prices.
Vietnamese companies need international expertise in management, training, service provision, banking and insurance as well as technology. This is not easy, considering the legal barriers and challenges in investment and intellectual property protection, dispute resolution mechanisms, and the potential consequences of the recent cyber security law.
Customs and tax policies, as well as administrative procedures, still cause difficulties in costs and time for FDIs. Mr. Andreatta proposed policies to attract more domestic investment in value adding manufacturing and service sectors to enhance investment in new technologies and attract more talent in new industry sectors.
Other changes should include reducing tax and customs regulations for investments in up-scaling capacity and technology. Mr. Andreatta also emphasised the need to improve infrastructure in energy, transportation and logistics. More transparent procedures for public bids and concessions to allow PPP could also bring more investment. Mr. Andreatta stressed the need to enforce sustainable policies to curb pollution and climate change and to manage the negative impact of industrial, urban and tourism growth already felt in Hanoi and HCMC.
Chairman of VCCI, Dr. Vu Tien Loc, described how Vietnam has made important steps towards trade liberalisation and economic openness. He pointed to the signing of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, completion of the legal review for the EU-Vietnam Free Trade Agreement (EVFTA), and implementation of the WTO’s Trade Facilitation Agreement. Vietnam should continue its efforts to improve institutional reforms, economic institutions and build a sustainable, stable and attractive business environment in the eyes of domestic and foreign investors.
EuroCham Co-Chairman, Mr. Nicolas Audier, also underlined the importance of FTAs, particularly the EVFTA. The EVFTA is a chance to write a new chapter of stronger relations between Europe and Vietnam. It will open up both markets and bring new opportunities for companies and consumers on both sides.
Mr. Audier also said that enhancing cooperation and support for domestic companies can help to improve living standards in Vietnam. Europe has some of the most successful and innovative healthcare enterprises, and they can contribute to an innovative, sustainable and safe healthcare sector in the country.
Europe is also a world-leader in food safety and sustainable agriculture. The Sanitary and Phytosanitary measures in the EVFTA and regulations in the EU’s fishery sector can help to boost standards in Vietnam. European companies will bring new technologies and agricultural practices to Vietnam, making farming more profitable and sustainable.
Bringing international skills and labour standards to Vietnam is also crucial. In signing various FTAs, not least the EVFTA, Vietnam has shown its commitment to international labour standards. Mr. Audier recommended that the Government and companies implement standards under the ILO Conventions to make Vietnam more attractive to new FDIs.
Later, Mr. Ngo Van Huy from the newly-established VBF Healthcare Working Group, emphasised the shared objectives to develop a stronger healthcare eco-system. One of the key areas for Vietnam is a professional homecare system. International healthcare companies, with best practice and technical know-how, can help to create value and growth in Vietnam, especially through Public Private Partnership (PPP) projects in research, innovative solutions, manufacturing, and technology transfer. This requires a strong presence of international private-sector players, with legal structures providing incentives and confidence to invest in a predictable environment. Moreover, the Vietnamese Government needs to ease administrative procedures and develop a clear roadmap led by a Senior Inter-Ministerial Taskforce. This should include an effective plan for PPP projects, especially in enhancing the development of private clinics and hospitals, to take full advantages of private-sector support.