Economic reform needs a boost

(VOV) - How to accelerate economic reform to facilitate business operations was the major theme of a mid-term business forum which opened in Hanoi on June 3.

The event offers Government officials, domestic and foreign businesses, donors and diplomatic corps the chance to examine ways to improve Vietnam’s business climate, according to the Vietnam Business Forum, one of the organisers of the forum.

There is growing concern that Vietnam will lag behind other countries in Southeast Asia unless its investment environment is improved.

David Whitehead, president of the Australian business society in Vietnam, said Indonesia, Thailand, Cambodia and Myanmar have emerged as attractive investment destinations.

Despite the global economic slowdown, global foreign direct investment (FDI) has increased considerably in recent times, and if Vietnam does not create a better investment climate, its FDI will keep falling, he warned.

At the 2012 Vietnam Business Forum, VBF also warned that if Myanmar got the most favoured nation (MFN) status from the US and European Union, its export products such as garments, footwear and decorations would have highly competitive advantages compared to similar Vietnamese products.

VBF has received a great deal of proposals from businesses, expressing concerns about the slowness in equitising and restructuring State-owned enterprises (SOEs).

Its working groups even proposed completing a legal framework on the Public-Private Partnership (PPP) model, citing the fact that the pilot PPP model has not lived up expectations.

Cumbersome administrative procedures are hampering investment attraction efforts, and it’s time to act to support investors, they said.

However, the Vietnamese economy seems to have bottomed out of the difficult times. The European Chamber of Commerce in Vietnam (EuroCham) recently announced its Vietnam’s business climate index (BCI), showing that business confidence and outlook among European businesses in Vietnam continues to improve.

EuroCham Executive Director Paul Jewell said that the BCI has experienced incremental improvements across the indicators, and this is a very healthy sign demonstrating that European companies are slowly regaining trust in the Vietnamese market.

He noted that this is only the half-way and the BCI needs to significantly improve, if Vietnam is to remain competitive within ASEAN.