Interview: Nguyen Chi Dung
What factors have improved Vietnam’s attractiveness as an investment destination?
NGUYEN CHI DUNG: The development of Vietnam is being bolstered by many favourable factors, particularly internal ones. Vietnam is a country with security and political stability; there are no problems related to ethnic conflict or terrorism. Our legal system is becoming increasingly transparent, meeting international standards. Additionally, Vietnam is a large market with over 92m inhabitants and a thriving middle class, providing an abundant and high-quality labour force and competitive costs. Macroeconomic stability has always been a top priority of the government. While the world and the regional economy is facing many challenges, Vietnam is able to maintain a substantial GDP growth rate, at 6.21% in 2016, which compares well to other regional countries. Vietnam’s strategic location also gives it the potential to become a centre of connection for the ASEAN Economic Community (AEC), which has a 600m-strong population.
A large number of reforms to improve our economy are ongoing, with three priorities: implementing a market economy, improving the quality of human resources and building a modern infrastructure system. The government has been implementing landmark measures and policies to improve the investment climate and business competitiveness, especially reforms of administrative procedures, which is important for any investor coming to Vietnam. We are also striving to become a popular investment destination in the ASEAN region.
Therefore, Vietnam is considered an attractive investment destination and is favoured by investors for its transparency and continuous improvements. We hope that when new business communities come to Vietnam, enterprises and investors will cooperate with the government, ministerial agencies and localities to shape the country’s investment vision and implement specific cooperation opportunities. Cooperation is the key factor that we and the business community always highlight.
How have foreign direct investment (FDI) and ASEAN contributed to Vietnam’s transformation?
DUNG: To date, Vietnam has attracted a total of $293bn in FDI from 116 countries and territories with 22,500 ongoing projects. FDI has become a key component of the economy. This is the most dynamic growth area and significantly contributes to the economic and social development. Foreign capital is not only a critical source of investment for development projects to meet the needs of economic growth, but also contributes to economic restructuring, production capacity improvement and a higher turnover rate for both imports and exports.
FDI also represents a new investment method, which helps the economy by impacting other economic sectors and motivating state-owned enterprise reforms; creating jobs and increasing labour productivity; contributing to the training and improvement of human resources; enhancing domestic investment resources; and encouraging local enterprises to compete and adapt to globalisation. FDI also plays a key role in introducing Vietnamese products to the international market, helping to increase the competitiveness of those products, accelerating the opening of trade and stabilising the country’s trade balance.
ASEAN is the most important market for Vietnam, especially since it levelled the playing field through the creation of the AEC. In this regard, the region enjoys a geographical balance and has grown into a mature market for investment and business opportunities. ASEAN investment accounts for a large share of total investment in Vietnam, accounting for 2929 projects with a total registered capital of $58.8bn. FDI from the ASEAN region helped Vietnam increase capital investment, create opportunities for market expansion and diversify its exporting products.
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