Opening the doors to investors
Prime Minister gives businesses an introduction to Viet Nam’s economy
PM Nguyen Tan Dung pledged Viet Nam to provide the best environment possible for investors in Ha Noi on Jan. 9. He also assessed and previewed the country’s economy for international business representatives and answered their numerous questions.
All were participants at the Business Roundtable at the National Convention Centre.
The PM emphasised that such discussions helped business and the Government better understand each other and co-operate in settling any differences to their mutual benefit.
The assessment
Viet Nam was now a market economy, a member of the World Trade Organisation and an active member in building the world community, the PM said.
The transition to a market economy had resulted in average yearly economic growth of 7.5 per cent every year. It was more than 8 per cent in 2005, 06 and 07. This year it was expected to reach 8.5-9 per cent.
Economic and technical infrastructure and the people’s living standards had remarkably improved.
Gross domestic product had increased tenfold against 1988 and poor households has fallen to below 15 per cent.
All cultural life had changed for the better.
Viet Nam was politically secure and investor rights were ensured and protected in accordance with the Constitution and the law.
More than 50 donors had provided a total of US$42 billion as official development assistance since 1993.
Donors had committed $5.4 billion at their meeting last December.
More than 80 countries and territories had participated in 9,500 foreign-direct-investment projects at a total of $100 billion by the end of last year.
Viet Nam with its population of than 87 million was ranked 12th as a destination for global investment.
Seventy per cent of the population was less than 30 years old and were educated, active and diligent.
Labour costs were low.
The country pursued a foreign policy that embodied independence, sovereignty, multilateral and diversified relations that befriended all nations on the basis of equality and mutual benefit.
The challenges
The Prime Minister listed the following future difficulties:
The quality, efficiency and competitiveness of the national economy remained low.
Although the higher prices of 2007 were controlled, the macro-economy was less than stable.
Socio-economic infrastructure and personnel were yet to match the demands of development and this limited the capacity to absorb investment.
Administrative procedures were cumbersome and the fight against corruption an uphill battle, despite encouraging results.
The living conditions of people in remote and flood-prone Viet Nam were still very difficult.
Traffic gridlock and accidents, environmental pollution and social problems were still to be properly addressed.
The solutions
Economic growth of 9 per cent with thorough implementation of the targets for social progress, hunger eradication, poverty alleviation and protection of the environment and especially efficient price control and stabilisation of the macro economy;
Improvement of the living standard of the people in remote and flood-prone Viet Nam and minority people. Reduce poor households to 11-12 per cent;
Improve socio-economic infrastructure and personnel training, particularly to meet the demands of development;
Enhance administrative reform with the building and completing of the legal system as the key task; and
Continue the fight against corruption and extravagance and encourage the practise of thrift.

Questions and Answers
Nokia Siemens Asia-Pacific Network’s Christian Fredrikson:
Question: We see broadband growth as a key to driving infrastructure and economic growth. How do you see us as infrastructure builders supporting you, the Government and industry in Viet Nam? How do you see us supporting in making this continued broadband growth happen, to have broadband in every house by 2015?
Answer: Telecommunications development has high priority in Viet Nam. The Viet Nam Government is determined to make the society at home with information technology. The key to this target is to develop infrastructure of broadband and mobiphone.
It’s a pity that Nokia is just selling its mobiphones in Viet Nam without having invested in infrastructure. It is hoped that Nokia will invest here soon. Viet Nam has nine telecommunication companies that would be equitised.

General Electric South East Asia President Stuart Dean:
Question: Can you be more specific on how you plan to build infrastructure to support yearly economic growth of 9 per cent?
Answer: Viet Nam will focus on infrastructure, particularly transport, energy and information technology.
More money will be spent on express highways, railways and subways in Ha Noi and HCM City. Particular attention will be given to aviation to meet increasing market demand.
Air transport has risen by 18-25 per cent a year over the past 20 years. We have signed to buy aircraft from Boeing and Airbus, but not enough. Viet Nam airline is now looking to General Electric.
The development of port and harbours will also be given attention and the Government will encourage foreign investment in information technology.
Energy will be developed together with saving programmes to ensure power for the economy.
The industry has increased by a yearly 12-15 per cent and Viet Nam generated a yearly 60 billion kWh by the end of last year but will need about 115-120 billion kWh by 2010. Viet Nam encourages investment in the industry in any form BOT or BT.

Economist Intelligence Unit Asia-Pacific Editorial Director Charles Goddard:
Question: How much progress do you think the Government has made against corruption and can you give some assurance to foreign investors that this is going to remain a strong priority?
Answer: Corruption is not confined to Viet Nam. It’s present in all countries. Corruption is a challenge not only for Viet Nam’s development but also the Government’s existence.
We affirm that we will prevent and push back this evil. Nothing can thwart our determination. But the task is difficult and complex.
We will be persistent and act in accordance with the law. We will win the fight because we have the support of the people and the Communist Party of Viet Nam.
We have recorded some initial results and have won people’s belief.
Viet Nam will now focus on:
Completing the legal system in compliance with the market economy so as to make all policies and regulations transparent to all people because that’s the best way to fight against corruption;
Focus on administrative reform and properly settle all cases of corruption; and
Gradually improve the living standard of wage earners whose salaries are very low because the economy is still small and the budget still limited.
Question: Can you make comment about the progress of equitsation as you see it and whether or not you see it slowing or moving forward more quickly?
Answer: Equitisation is fundamentally completed.
The number of State-owned enterprises fell from 6,000 in early 2001 to 1400 last year. One hundred and four State-owned corporations will be equitised in the next three years.
These corporations will be equitised in accordance with the laws of the market. They will be listed on stock exchanges within and beyond Viet Nam.
The stock market is young but capitalisation over the past two years has accounted for 40 per cent of GDP. This rapid increase of the stock market was due to the equitisation of State-owned enterprises.
Five State-owned banks will also be equitised beginning with the Bank for Foreign Trade of Viet Nam.
All telecommunication enterprises will also be equitised.
Equitisation programme has been proceeding efficiently.
Almost all State-owned enterprises including corporations and commercial banks will be equitised in 2009 and 2010.
Most of the equitised enterprises have been doing well.
VNS 09.01

Expressway consortium gets rolling
The consortium of domestic banks and construction companies that has the task of raising about US$1.5 billion and then building the planned Ha Noi to Hai Phong expressway was officially launched in the capital yesterday.
PM Nguyen Tan Dung assigned the Viet Nam Infrastructure Development and Finance Investment Joint Stock Company (VIDIFI) the job in late November.
The domestic Build-Operate-Transfer (BOT) project to provide an international-standard expressway from the capital to Viet Nam’s major northern port is scheduled to begin in May.
The expressway would be the first BOT construction financed by domestic investors, VIDIFI general director Dao Van Chien said at the launching ceremony.
"An estimated 6,000km of expressway is needed for Viet Nam’s industrialisation and modernisation," he said.
No small feat
Transport Minister Ho Nghia Dung said raising investment capital for such a project was a major challenge for the Viet Nam Government.
"The model of an infrastructure development company like VIDIFI will, hopefully, give more companies the chance to join in the building of the expressway system and other roads," he said.
The new expressway will service the cities of Ha Noi, Hung Yen and Hai Duong as well as Hai Phong.
It will be of about 105.5km and include six interchanges; nine large bridges, 21 medium bridges and 22 overpasses.
The expressway’s width will be from 32.5 to 35m and designed for speeds of 120km/h. Construction is scheduled to be completed by late 2010.
VIDIFI will raise the money for the expressway and collect tolls for about 25 years to recover its investment.
It will then transfer management to the State.
VIDIFI’s foundation shareholders are the Viet Nam Development Bank, the Bank for Foreign Trade of Viet Nam, the Viet Nam Construction and Import Export Corporation and the Sai Gon Investment Group.
It was established with charter capital of $312.5 million.
VIDFI’s major purpose is to mobilise capital for building the Ha Noi-Hai Phong expressway and the $437.5 million Tan Vu-Lach Huyen highway from Cat Hai Island to Hai Phong Province.
It will also participate in the building of infrastructure for urban and industrial zones, services and logistics.
Capital plans transport projects
A US$400-million-project to build the Nhat Tan Bridge in Ha Noi and a project on rural transportation worth $394 million are going to be implemented this year, according to the Ministry of Transport.
Other major projects include a $320-million-project on building Highway 3 and linking Ha Noi and Thai Nguyen City and a project on widening a section of Highway 1 that runs over My Thuan Bridge in Can Tho City.
The project on what is planned to be the most modern highway in the country, linking HCM City with Long Thanh District and Dau Giay District in Long An Province, has been officially implemented in early January. Work on the highway, which is about 55km, will tally up to almost VND10 trillion (up to $625 million) during the first phase of construction.
VNS 09.01

Tourism sector sees rapid growth
2007 was a successful year for the tourism sector as it fulfilled all its targets and achieved the relatively high growth rate of 17 percent over the 2006 figure.
The sector provided services for 23.4 million holiday-makers, including 4.2 million foreigners, up 600,000 against the 2006 figure. This was an impressive growth given the fact that the increased number of foreign tourists in previous years stood at 300,000 and never reached more than 500,000.
The quality and efficiency of Vietnam’s tourism services have improved remarkably in recent times as a result of the sharp increase in tourists with disposable incomes. Tourism is considered a key economic sector and makes up a valuable chunk of the national economy.
Tourism is listed among the five strongest hard currency earners after crude oil, garments and textiles, footwear and seafood and has a total export turnover of more than US$3 billion/year.
At a recent conference reviewing tourism in 2007, Minister of Culture, Sports and Tourism Hoang Tuan Anh said that the sector aims to attract 5 million foreign tourists in 2008 and achieve its 2005-2010 target in 2009. However, what will the sector rely on in order to reach its targets?
Firstly, the target for 4-5 million foreign tourists per annum is much higher than it was set 10 years ago but much lower than Malaysia’s current target for 17 million. If last year saw an increase of 600,000 tourists, it would be possible to raise the figure to 800,000 by 2008 and 1 million by 2009.
Secondly, the target for tourism growth is not based on the number of arrivals but on the total annual revenue. Australia is a case in point as it is listed among the top-ten tourism earners. In Vietnam, the tourism sector could fetch US$800 from a foreign tourist and this figure could rise to US$1,000 or even higher in the future. Therefore, the sector’s turnover is likely to reach US$6-7 billion or much higher by 2010.
Thirdly, Vietnam is emerging as a safe and friendly destination for holidaymakers. Vietnam has further enhanced its position in the international arena after it became a full member of the World Trade Organisation (WTO) and a non-permanent member of the United Nations Security Council and successfully organised a number of international conferences and forums.
Vietnam’s deeper integration into the global economy and its rising position in the international arena are providing good opportunities for the whole economy to develop and the tourism sector should grasp to tap its potential.
Fourthly, despite the initial development period, the sector has made significant progress. There are now thousands of travel agents and 256 three-five star hotels. Foreign businesses, including famous hotel management groups, have invested in 235 tourism projects worth US$6 billion in Vietnam. Domestic investors have also had started big tourism projects. With a complete legal framework and experience in tourism promotion, it is high time the sector pushed ahead with its development plans.
Fifthly, the tourism sector must set higher targets and has to improve the efficiency of management. The Ministry of Culture, Sports and Tourism (MoCST) will direct development plans and investment to promote tourism products.
The region’s biggest tourism event will be held in Vietnam for the first time next year. The ASEAN Tourism Forum (ATF), including the ASEAN and ASEAN + 3 Tourism Ministerial Meeting and the ASEAN Travel Exchange (TRAVEX) will be held under the management of the MoCST to discuss basic issues related to tourism development.
CPV/VOV 09.01

State strives to offer more favours to Overseas Vietnamese
The year 2007 was marked with remarkable changes in the affairs relating to overseas Vietnamese.
Prominent among those changes was the visa exemption applied to overseas Vietnamese since September 1.
The policy has greatly facilitated overseas Vietnamese’s travel to the homeland and consolidated their trust in the Party and State’s policy regarding overseas Vietnamese as an integral part of the nation.
According to the Committee for Overseas Vietnamese Affairs (COVA), visa exemption certificate has to date been granted to more than 16,000 overseas Vietnamese around the world, while applications by tens of thousands of others are being processed.
"We are doing our best to process visa exemption procedures for overseas Vietnamese," Tran Trong Toan, COVA Vice Chairman told the Vietnam News Agency.
The Foreign Ministry forecast that with visa exemption policy, the number of overseas Vietnamese to visit home during the lunar New Year festival will surpass the half-a-million mark.
The COVA also coordinated with the Construction Ministry to revise regulations concerning overseas Vietnamese's ownership of houses in Viet Nam.
"If proposed revisions are adopted, there will be almost no differences between overseas Vietnamese and their peers at home in terms of house ownership," Toan affirmed.
Apart from policies to encourage overseas Vietnamese to return and do business in the homeland, the Vietnamese State has taken moves to assist them to integrate into their host countries.
"Having defined overseas Vietnamese as an inseparable part of the nation and an important element to promote the relationship between Viet Nam and other countries, we have to protect them. One of the most important protections will be helping them secure a legal status in their residing countries," Toan explained.
In reality, overseas Vietnamese have been acknowledged as an ethnic group in many Western countries, but in other regions, such as the Eastern Europe, the lack of an official recognition cause many difficulties to overseas Vietnamese in their daily lives as well as in their business, cultural activities, and the preservation of cultural identity and language.
The State's assistance is necessary to deal with the issue, Toan said.
At present, the Vietnamese State is working with other countries to put an end to illegal immigration and to reach agreements on labour, consular protection and legal regulation for Vietnamese citizens.
Toan went on to talk about the citizenship, another issue of great concern for the overseas Vietnamese community.
After ten years of enactment, the Law on Citizenship is due to be revised in 2008, enabling overseas Vietnamese to hold many nationalities if their host countries do not forbid, Toan said.
The revision aims to create favourable conditions for overseas Vietnamese as well as protect their legitimate interests in the course of integrating into the life of their host countries, the official emphasised.
According to the Foreign Ministry and the Ministry of Planning and Investment, overseas Vietnamese poured over 1 billion USD in direct investment in the homeland. The figure did not include their indirect investment.
In 2007, they transferred home close to 5 billion USD, these ministries reported.
"Although the figure is still modest, it reflects the confidence of overseas Vietnamese in the investment environment in the homeland," Toan commented.
CPV/VNA 04.01