Improving business climate – a must

They said Vietnam is hardly competing for the lion’s share against other regional Southeast Asian countries including Indonesia, Thailand, Cambodia and Myanmar which have recently emerged as attractive investment destinations.

A better investment climate will make it easier for Vietnam to attract foreign direct investment in the context of the global economic slowdown, they said.

In his opening address, Minister of Planning and Investment Bui Quang Vinh pointed to the fact that despite recent positive signs the national economy is meeting numerous difficulties, including low FDI, excessive inventories, poor competitive capacity and a large number of suspended businesses.

The business community needs to shoulder the burden with the government in the reform process to overcome challenges, the minister said.

To ride out the difficult times, Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry, proposed that the government persist in stabilising the macroeconomy, controlling inflation and achieving steady economic growth.

It is imperative to speed up structural reform, primarily for State-owned enterprises, increase transparency, and create a playing ground on an equal footing basis for all economic sectors, said Loc.

To support businesses in difficulty, he recommended the government slash the corporate income tax to 20 percent, remove interest rate ceiling, and rev up the tourism sector.   

He laid a strong emphasis on accelerating negotiations and signing of key trade agreements such as the Trans-Pacific Partnership (TPP) agreement and the Vietnam-EU free trade agreement (FTA).

Time for private businesses to prosper

Delegates once again confirmed the role the private sector plays in national economic development.

VCCI President Loc said the government should have consistent policies to ensure an equal environment for private businesses.

“This must be demonstrated through the consistency of policies, from the Constitution to laws and by-law documents,” said Loc.

Preben Hjortlund, President of the European Chamber of Commerce in Vietnam (EuroCham), noted that despite preferences, State-owned enterprises that account for 40 percent of the national economy do not operate as efficiently as expected, barring economic development.

EuroCham insists that the government of Vietnam should accelerate SOE equitisation to create a healthier competitive environment, he said.

Mark Gillin, President of the American Chamber of Commerce in Vietnam (AmCham), echoed the delegates’ view, saying the Vietnamese government should establish a competitive playing field on an equal footing basis for private businesses to develop on a par with other economic sectors.  

It’s time Vietnam created a healthier competitive environment through reform, he concluded.

At the forum, Deputy Prime Minister Vu Van Ninh appreciated executives and donors’ frank opinions and said the government will study them to come up with appropriate solutions.

He also asked businesses to restructure themselves to improve their operational efficiency.

The mid-term gathering was jointly held by the Vietnam Business Forum (VBF), the Ministry of Planning and Investment, the International Finance Corporation (IFC), and the World Bank (WB).